Press Releases


Net income increases 41 percent on record revenues

Macromedia, Inc. (Nasdaq: MACR)
Summary Financial Results
(in millions, except per share data and percentages)

Three Months Ended September 30

  2005 2004
Net Revenues $127.9 $ 107.9
Net income per diluted share - GAAP $ 0.25 $ 0.20
Net income per diluted share - pro forma $ 0.30 $ 0.22

Download Q206 Financials - Excel file (66K)

San Francisco, CA—October 24, 2005—Macromedia, Inc. (Nasdaq: MACR) today reported financial results for its fiscal 2006 second quarter ended September 30, 2005, reporting the highest revenue and earnings in the Company's history. Net revenues for the quarter were $127.9 million, an 18 percent increase compared to the $107.9 million reported for the same period last year.

GAAP net income for the fiscal second quarter was $20.3 million, or $0.25 per diluted share, compared to $14.5 million, or $0.20 per diluted share, for the same quarter a year ago. Non-GAAP net income for the fiscal second quarter was $24.9 million, or $0.30 per diluted share, compared to $15.8 million, or $0.22 per diluted share, for the same quarter a year ago. Non-GAAP results exclude expenses associated with the proposed Adobe merger and the tax effect of the planned repatriation of foreign earnings partially offset by other tax items, as outlined in the attached consolidated statements and related reconciliations. Non-GAAP results also reflect an estimated annual tax rate of 20 percent, reflecting U.S. federal and state income taxes and foreign taxes at rates other than U.S. statutory rates.

"With the advancement of rich Internet application development, new mobile adoption on the Flash Platform, and the launch of Studio 8, this has been an outstanding quarter," said Stephen Elop, CEO, Macromedia. "We are in the midst of one of the most profound changes in our industry. Developers and consumers alike continue to embrace the concept that great digital experiences matter, demonstrated by the more than 100 million people who have already downloaded Flash Player 8."

Business Outlook – Third Quarter Fiscal Year 2006

For the quarter ending December 31, 2005, Macromedia expects net revenues to be in the range of $130 to $140 million, with gross margins in the 90 to 92 percent range and operating profit margin between 20 and 23 percent, excluding certain merger-related costs.

Conference Call

Macromedia's second quarter fiscal year 2006 financial results will be discussed in a Macromedia Breeze presentation available at In addition, a teleconference is scheduled to begin at 2 p.m. Pacific Time / 5 p.m. Eastern Time on Monday, October 24, 2005. After the conclusion of the teleconference, a replay of the conference call will be available on the Company's website.

About Macromedia

Experience matters. Macromedia is motivated by the belief that great experiences build great businesses. Our software empowers millions of business users, developers, and designers to create and deliver effective, compelling, and memorable experiences - on the Internet, on fixed media, on wireless, and on digital devices.

Cautionary Note About Forward Looking Statements

Matters discussed in this news release may be considered forward looking statements, including those under the heading "Business Outlook" that relate to expected future financial results which involve risks and uncertainties. Such risks and uncertainties include those related to the pending merger with Adobe Systems Incorporated, customer acceptance of new products and services and new versions of existing products, the impact of competition, the risk of delays in product development and release dates, the risk of not attracting and retaining key personnel, new regulations and other government actions that may materially increase the cost of compliance and doing business, risks associated with participating in international markets (including, but not limited to, foreign policies, market instability, exchange rate fluctuation, and regulations in the applicable foreign countries), quarterly fluctuations of the Company’s operating results, the Company's dependence on distributors and resellers, the risk of product returns, the challenges faced in protecting the Company’s intellectual property within and outside the U.S., the risks associated with potential litigation and intellectual property ownership claims against the Company and others in the industry, volatility of the Company's stock, and other risks detailed from time to time in the Company's filings with the SEC, including without limitation, its annual report on Form 10-K, and its quarterly reports on Form 10-Q, as they may be updated or amended with future filings. The actual results the Company achieves may differ materially from any forward looking statements due to such risks and uncertainties.

Non-GAAP Financial Measures

Macromedia prepares its financial statements in accordance with accounting principles generally accepted in the United States (GAAP) and adjusts some of its GAAP measures to create non-GAAP financial measures. For purposes of presenting our non-GAAP net income, we exclude certain merger-related costs and apply a non-GAAP annual tax rate of 20% reflecting our estimated tax expense on our core operations. Our non-GAAP financial measures may be considered in addition to, but are not to be used as a substitute for the GAAP information contained in our financial reporting. The non-GAAP financial measures we use are likely to be different from, and not comparable to, non-GAAP financial measures used by other companies.

Macromedia's management uses non-GAAP financial measures for its internal performance management and budgeting processes. Macromedia believes that the non-GAAP financial measures provide useful insight into the performance of the business by eliminating the impact of non-recurring and unusual items that are recorded under GAAP. The non-GAAP financial measures have limitations compared to GAAP measures because they exclude charges that often have a material impact on the Company’s GAAP operating expenses, net earnings and diluted earnings per share calculations. To compensate for these limitations, Macromedia’s management typically uses non-GAAP measures in conjunction with GAAP results.

Macromedia believes that presenting the non-GAAP results with an accompanying reconciliation to GAAP results provides investors with an additional tool for evaluating the ongoing performance of our business, without the influence of certain non-recurring expenses. Macromedia believes the non-GAAP financial measures may be useful to investors in helping them understand the financial condition of Macromedia by focusing on the performance of the Company's core operations. The non-GAAP financial measures are presented by Macromedia to give investors further information about historical and expected results and increase their ability to compare financial information from period to period.