For Immediate Release
Adobe Systems Reports First Quarter Fiscal 2002 Results

Company Meets Revenue and Earnings Targets; Acrobat®-Based Revenue Grows 20 Percent Year-Over-Year

SAN JOSE, Calif. — March 14, 2002 (NASDAQ: ADBE) — Adobe Systems Incorporated, the leader in network publishing, today reported financial results for its first quarter ended March 1, 2002.

In the first quarter of fiscal 2002, Adobe achieved revenue of $267.9 million, compared to $329.0 million reported for the first quarter of fiscal 2001 and $264.5 million reported in the fourth quarter of fiscal 2001. Pro forma diluted earnings per share for the first quarter of fiscal 2002, which does not include acquired in-process research and development, amortization of goodwill and purchased intangibles, and investment gains and losses, were $0.22. Adobe's revenue and pro forma earnings per share results met the Company's original first quarter targets announced in December.

"We had a solid quarter, with Acrobat once again leading the way," said Bruce R. Chizen, president and chief executive officer of Adobe. "We also made significant progress against our strategy, including the pending acquisition of Accelio Corporation which will give Adobe a leading position in the electronic forms market."

GAAP net income was $49.8 million for the first quarter of fiscal 2002, compared to $69.8 million reported in the first quarter of fiscal 2001, and $34.3 million in the fourth quarter of fiscal 2001. Pro forma net income, which excludes acquired in-process research and development, restructuring and other charges, amortization of goodwill and purchased intangibles, and investment gains and losses, was $52.8 million for the first quarter of fiscal 2002, compared to $83.6 million in the first quarter of fiscal 2001, and $48.7 million in the fourth quarter of fiscal 2001.

GAAP diluted earnings per share for the first quarter of fiscal 2002 were $0.20 based on 245.2 million weighted average shares. This compares with diluted earnings per share of $0.28 reported in the first quarter of fiscal 2001, based on 253.6 million weighted average shares, and diluted earnings per share of $0.14 reported in the fourth quarter of fiscal 2001, based on 243.4 million weighted average shares.

Excluding the amortization of goodwill and purchased intangibles, the write off of in-process research and development, and restructuring and other charges, Adobe's pro forma operating profit was $72.7 million in the first quarter of fiscal 2002, compared to $119.0 million in the first quarter of fiscal 2001 and $67.9 million in the fourth quarter of fiscal 2001. As a percent of revenue, pro forma operating profit for the first quarter was 27.1 percent, compared to 36.2 percent in the first quarter of fiscal 2001 and 25.7 percent in the fourth quarter of fiscal 2001.

For the second quarter of fiscal 2002, based on the assumptions that there will be no change in global market conditions affecting our customers, and that the Accelio Corporation acquisition will close in April, the Company announced that it is targeting revenue of $305 to $325 million, a gross margin of 92 percent, and a pro forma operating margin of 28 to 29 percent. As a percent of revenue, Adobe is targeting expenses as follows:

Research & Development — approximately 19 to 20 percent
Sales & Marketing — approximately 34 to 35 percent
General & Administrative — approximately 9 to 10 percent

In addition, with the impact from the Accelio acquisition, Adobe is targeting its share count range to be between 247 and 249 million shares in the second quarter of fiscal 2002. The Company is also targeting other income to be approximately $3 million to $4 million, and a tax rate of 32 percent. These targets lead to a pro forma earnings per share target range in the second quarter fiscal 2002 of $0.24 to $0.27 per share.

The Adobe Board of Directors declared this quarter’s cash dividend of $0.0125 per share, payable on April 8, 2002 to stockholders of record as of March 25, 2002.

This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to: adverse changes in general economic conditions in any of the major countries in which the Company does business, including the recent slow-down affecting the United States, Europe, Japan, and potentially other geographic areas; continuing adverse economic impact of the recent national tragedy on September 11, 2001; delays in shipment of our new products and major new versions of existing products; corporate reductions in marketing expenditures which may result in lower demand for professional content creation and layout products; lack of market acceptance of new products and upgrades; delays or problems associated with the integration of acquisitions; introduction of new products by major competitors; weakness in demand for application software and printers; lack of growth in worldwide personal computer and printer sales and downward sales price adjustments; renegotiation of royalty arrangements; consolidation in the OEM printing business; ongoing weakness in our printer business due to product transitions; industry transitions to new business and information delivery models; and market risk associated with our equity investments. For further discussion of the risks and uncertainties, individuals should refer to the Company's SEC filings, including the 2001 annual report on Form 10-K and quarterly reports on Form 10-Q to be filed in 2002. The Company does not undertake an obligation to update forward-looking statements.

About Adobe Systems Incorporated

Founded in 1982, Adobe Systems Incorporated (www.adobe.com) builds award-winning software solutions for network publishing, including Web, ePaper, print, video, wireless and broadband applications. Its graphic design, imaging, dynamic media and authoring tools enable customers to create, manage and deliver visually-rich, reliable content. Headquartered in San Jose, Calif., Adobe is one of largest PC software companies in the world, with annual revenues exceeding $1.2 billion.

Condensed Consolidated Statements of Income
Condensed Consolidated Balance Sheets
Pro Forma Results

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© 2002 Adobe Systems Incorporated. All rights reserved. Adobe, Acrobat, the Adobe logo, are either registered trademarks or trademarks of Adobe Systems Incorporated in the United States and/or other countries. All other trademarks are the property of their respective owners.

Press/Analyst Contacts
Investor Relations
Mike Saviage
Adobe Systems Incorporated
408-536- 4416
ir@adobe.com

Public Relations
Holly Campbell
Adobe Systems Incorporated
408 536.6401
campbell@adobe.com

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