Adobe CEO Shantanu Naraen attends a media event in Mumbai on May 3, 2017.
Abhijit Bhatlekar |: Mint |: Hindustan Times | Getty Images:
Adobe: Shares rose 5% in extended trading Wednesday after the software maker reported first-quarter financial results that beat Wall Street estimates and raised its full-year forecast.
Here’s how the company did it.
- Profit: $3.80 per share, adjusted, versus $3.68 per share, as expected by analysts, according to Refinitiv.
- Income: $4.66 billion, compared to analysts’ expectations of $4.62 billion, according to Refinitiv.
Revenue was up 9% year over year in the quarter ended March 3, it said in a statement. Net income decreased slightly, reaching 1.25 billion dollars.
The company’s Digital Media segment, which includes the Creative Cloud design software suite, generated $3.4 billion in revenue, up 9 percent year over year and above the $3.36 billion consensus among analysts polled by StreetAccount.
Adobe’s Digital Experience division, which owns marketing software Marketo, contributed $1.18 billion in revenue, slightly above the StreetAccount consensus of $1.17 billion.
For the second quarter, Adobe expects earnings per share of $3.75 to $3.80 on an adjusted basis and revenue of $4.75 to $4.78 billion. Analysts polled by Refinitiv had expected adjusted earnings of $3.76 per share and revenue of $4.76 billion.
Adobe increased its earnings forecast for fiscal 2023 and now sees adjusted earnings of $15.30 to $15.60 per share on $1.7 billion in net new annual recurring revenue from Digital Media. In December, Adobe said it was looking for full-year adjusted earnings of $15.15 to $15.45 per share on net new digital media ARR of $1.65 billion. Analysts polled by Refinitiv were looking for adjusted earnings of $15.31 per share.
One recent acquisition is bearing fruit at Adobe. The company is forcing existing video customers to pay for Frame.io, a video review and approval tool it will acquire in 2021 for $1.24 billion, Adobe CFO Dan Durn said on a conference call with analysts.
During the quarter, Microsoft said it is putting Adobe’s Acrobat PDF engine in Edge, the default browser for Windows 10 and 11, and Adobe says it is cooperating with US, UK and EU regulators $20 billion worth around the acquisition of design software start-up Figma. “We have completed the discovery phase of the second US DOJ inquiry and are ready for the next steps, whether confirmation or challenge,” Adobe CEO Shantanu Narayan said during the conference.
Excluding the shift in business hours, Adobe shares are down 1% this year, while the S&P 500 is up 1%.
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