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Oct 25, 2006

Adobe Systems Provides Intra-Quarter Business Update

Company Reaffirms Fourth Quarter Revenue Target Range

Press Release: SAN JOSE, Calif. — Oct. 25, 2006 — Adobe Systems Incorporated (NASDAQ: ADBE) today is providing its regular intra-quarter business update for its fourth quarter of fiscal 2006, which ends December 1, 2006.

With more than five weeks remaining in its fourth quarter, Adobe reaffirmed it believes the Company will achieve quarterly revenue of $655 to $685 million. This original revenue target range was provided by the Company on September 14, 2006.

Adobe also announced it is increasing its GAAP operating margin and GAAP earnings per share target ranges for the Company’s fourth quarter. The Company stated it is targeting a GAAP operating margin range of 23 to 25 percent in Q4 FY2006, with GAAP earnings per share of $0.29 to $0.32. The Company’s original GAAP operating margin target range was 21 to 24 percent, with a GAAP earnings per share target range of $0.19 to $0.22. The increase in these GAAP target ranges is due to a recent gain from the sale of an equity investment, and lower stock compensation expense than was originally targeted for the fourth quarter.

In its business update, Adobe also reaffirmed it believes it will achieve results within its prior Q4 FY2006 non-GAAP financial target ranges. The Company continues to target a non-GAAP operating margin of 37 to 38 percent, with non-GAAP earnings per share of $0.32 to $0.34 in its fourth quarter.

Adobe stated it has experienced solid demand in its major geographic markets quarter-to-date. In addition, the Company stated Adobe Acrobat 8 will start shipping as planned during the first week of November.

The Company plans to report its fourth quarter fiscal 2006 results on December 14, 2006, after the market closes.

Forward Looking Statements Disclosure
This press release contains forward looking statements, including those related to planned product releases, revenue, operating margin and earnings per share, which 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: delays in development or shipment of Adobe’s new products or major new versions of existing products, introduction of new products by existing and new competitors, failure to successfully manage transitions to new business models and markets, adverse changes in general economic or political conditions in any of the major countries in which Adobe does business, difficulty in predicting revenue from new businesses, failure to anticipate and develop new products in response to changes in demand for application software, computers and printers, intellectual property disputes and litigation, inability to protect Adobe’s intellectual property from unauthorized copying, use, disclosure or malicious attack, failure to realize the anticipated benefits of past or future acquisitions and difficulty in integrating such acquisitions, changes to Adobe’s distribution channel, disruption of Adobe’s business due to catastrophic events, interruptions or terminations in Adobe’s relationships with turnkey assemblers, risks associated with international operations, fluctuations in foreign currency exchange rates, changes in accounting rules and regulations, impairment of Adobe’s goodwill or intangible assets, unanticipated changes in or interpretations of tax rates, Adobe’s inability to attract and retain key personnel, and market risks associated with Adobe’s equity investments. For further discussion of these and other risks and uncertainties, individuals should refer to Adobe’s SEC filings. Adobe does not undertake an obligation to update forward looking statements.

Non-GAAP Financial Targets (PDF download)

About Adobe Systems Incorporated
Adobe revolutionizes how the world engages with ideas and information – anytime, anywhere, and through any medium. For more information, visit www.adobe.com .

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