“In year one and two after closing, the transaction will be dilutive to Adobe’s non-GAAP EPS and we expect it to be breakeven in year three and accretive at the end of year three.”

In context

“’s products address a $16.5 billion market opportunity and the company has an impressive financial profile. This year they are expected to add $200 million in net new ARR, surpassing $400 million total ARR by the end of the year, with greater than 150% net dollar retention. They have a disciplined, efficient operating model, with gross margins of approximately 90% and positive operating cash flows. Figma have strong business momentum, a large and expanding customer base and we are incredibly excited about what we can bring to this combination from a financial perspective. While this transaction is primarily about creating new markets, expanding adjacent opportunities and accelerating growth, we are committed to maintaining Adobe’s strong profitability and maximizing EPS for our investors. In year one and two after closing, the transaction will be dilutive to Adobe’s non-GAAP EPS and we expect it to be breakeven in year three and accretive at the end of year three. While the transaction has not yet closed, I want to provide color on the path to non-GAAP EPS accretion as a combined company exiting year three, assuming Adobe’s operating margin for the second half of fiscal 2022 as the baseline. The combination will accelerate top-line growth for both Adobe and Figma based on three primary drivers; one, we extend Figma’s reach to our customers and through our global go-to-market footprint; two, Figma accelerates the delivery of new Adobe offerings on the web to the next generation of users; and three, we jointly introduce new offerings to market as we unlock the possibilities of collaborative creativity. Clearly the explosive revenue growth of Figma combined with their efficient operating model would result in an expanding standalone operating margin.”