Adobe shares soar 17% on better-than-expected results

Adobe
shares
jumped
17%
in
extended
trading
on
Thursday
after
the
design
software
maker
reported
earnings
and
revenue
that
topped
estimates
and
lifted
full-year
guidance.

Here’s
how
the
company
did
in
comparison
with
LSEG
consensus:

• 
  Earnings
  per
  share:
  $4.48
  adjusted,
  vs.
  $4.39
  expected
• 
  Revenue:
  $5.31
  billion
  vs.
  $5.29
  billion
  expected

Adobe’s
revenue
grew
10%
year
over
year
in
the
quarter,
which
ended
on
May
31,
according
to
a

statement.

The
company
called
for
adjusted
earnings
per
share
of
$4.50
to
$4.55
for
the
fiscal
third
quarter,
with
$5.33
billion
to
$5.38
billion
in
revenue.
Analysts
polled
by
LSEG
were
looking
for
$4.48
in
adjusted
earnings
per
share
and
$5.4
billion
in
revenue.

Net-new
annualized
recurring
revenue
for
the
Digital
Media
business
that
includes
Creative
Cloud
subscriptions
came
in
at
$487
million,
above
the
StreetAccount
consensus
of
$437.4
million.

Adobe
bumped
up
its
view
for
the
2024
fiscal
year,
calling
for
full-year
adjusted
earnings
per
share
between
$18.00
and
$18.20
and
revenue
of
$21.40
billion
to
$21.50
billion.
Analysts
surveyed
by
LSEG
had
projected
$18.02
per
share
in
adjusted
earnings
and
$21.46
billion
in
revenue.
The
forecast

in
March
was
$17.60
to
$18.00
in
adjusted
earnings
per
share,
with
$21.30
billion
to
$21.50
billion
in
revenue.

In
recent
weeks
software
peers
SentinelOne,
UiPath,
Veeva
reduced
their
full-year
revenue
guidance
citing

economic
weakness
and
corporate
interest
in
artificial
intelligence
development.
CEO
Shantanu
Narayen
told
analysts
on
a
conference
call
that
there
were
no
changes
to
the
economy
that
were
worth
calling
out.

During
the
quarter,
Adobe

announced
the
availability
of
a
service
for
fine-tuning
the
company’s
Firefly
generative
artificial
intelligence
models
to
deliver
image
content
consistent
with
clients’
brand
guidelines.

“We’re
excited
about
the
accelerating
pace
of
innovation
across
the
Digital
Media
business
and
pleased
with
the
adoption
of
AI
functionality
as
well
as
its
early
monetization
across
Document
Cloud
and
Creative
Cloud,
including
our
flagship
applications,
Firefly
services
and
Express,”
David
Wadhwani,
president
of
Adobe’s
Digital
Media
business,
said
on
the
call.

Adobe
is
seeing
Creative
Cloud
subscribers
upgrading
their
plans
to
access
Firefly
capabilities,
he
said.

Before
Adobe
issued
Thursday’s
statement,
shares
were
down
23%
so
far
this
year,
while
the
S&P
500
index
was
up
around
14%.

WATCH:

Adobe
CEO
on
AI
innovation,
expanding
AI
strategy
and
revenue
growth