Adobe CEO Shantanu Narayen speaks in an interview with CNBC at the New York Stock Exchange on February 20, 2024.
Brendan McDermid | Reuters
adobe The software maker reported earnings and revenue that beat analysts’ expectations, sending shares soaring 15% on Friday, their biggest gain since March 2020.
After the close on Thursday, Adobe reported adjusted earnings of $4.48 per share, beating the LSEG consensus estimate of $4.39 per share. Revenue increased 10% from the same period last year to US$5.31 billion, exceeding analysts’ expectations of US$5.29 billion.
Adobe CEO Shantanu Narayen attributed the record revenue to strong growth in Creative Cloud, Document Cloud and Experience Cloud, as well as advances in artificial intelligence.
“Our highly differentiated approach to artificial intelligence and innovative product delivery is attracting an increasing number of customers and delivering more value to existing users,” Narayan said in a press release on Thursday.
New-year recurring revenue from the digital media business, which includes Creative Cloud subscriptions, reached $487 million, exceeding StreetAccount’s forecast of $437.4 million.
Adobe’s performance contrasts sharply with what software investors have seen recently from many of its industry peers. sales force Late last month, the cloud software provider’s shares suffered their worst plunge since 2004 after the company reported lower-than-expected revenue and disappointing guidance. the same week, MongoDBSentinelOne, UiPath and Veeva all lowered their full-year revenue forecasts.
However, there are positive signs for the industry this week. Oracle Shares rise after database company announces cloud deal with clients Google and OpenAI, although fourth-quarter results fell short of Wall Street expectations. mass strike The cybersecurity company’s stock price rose sharply on Monday after it announced after the close on Friday that it would be included in the S&P 500 Index.
JMP analysts, who have a “hold” rating on Adobe, wrote in a post-earnings report that the company’s results were encouraging despite a challenging economic environment and increased competition in design software.
“We like the way Adobe is integrating AI capabilities across its product portfolio,” the analysts wrote.
Meanwhile, analysts at Piper Sandler slightly raised their fiscal 2024 revenue forecasts by $73 million and their fiscal 2025 revenue forecasts by $71 million.
“Customer response to recent innovations is encouraging as the increasing availability of AI-driven solutions is expected to drive further user acquisition” and better average revenue per user, Piper Sandler analysts wrote, recommending Buy the stock.
Even after Friday’s gains, Adobe shares are still down 12% this year. The stock closed at $525.31.
