Cash, cash flows, and debt position
Previously in the series, we saw how Adobe started 2016 with a record performance. With a market cap of ~$46 billion, Adobe (ADBE) has a diversified presence in the creative and digital software space. It held cash and short-term investments worth ~$4.1 billion as of March 4, 2016. It has a debt of $1.9 billion. The debt is entirely long term. Adobe’s CFO (cash flow from operations) grew to ~500 million in fiscal 1Q16. Its deferred revenue grew 36% on a year-over-year basis to $1.6 billion.
Adobe’s share buybacks
In 1Q16, Adobe repurchased ~1.5 million shares and returned ~$133 million in cash to shareholders. The company doesn’t pay dividends. Oracle (ORCL), Adobe’s peer, recently announced its fiscal 3Q16 results on March 15, 2016. It announced a share buyback program of $10 billion. In 4Q15, Oracle, along with Apple (AAPL), Microsoft (MSFT), and Visa (V) made the top ten list of technology companies that spent a maximum on share buybacks.
As the above chart shows, Apple spent the maximum on share buybacks followed by United Technologies (UTX). In total, the technology sector spent $150 billion on share buybacks in 2015, as stated by Factset.
Adobe accounts for 0.24% of the SPDR S&P 500 ETF (SPY). SPY has 7% exposure to the application software sector.