Adobe surfs AI wave to post record revenue as its stock soars after earnings

By Emily Bary

Software company beats expectations for its bottom line

Adobe Inc.'s stock zoomed 15% higher in Thursday's extended session after the company's results and guidance on the bottom line showed upside.

The software company (ADBE) generated fiscal second-quarter net income of $1.57 billion, or $3.49 a share, compared with $1.30 billion, or $2.82 a share, in the year-earlier period. On an adjusted basis, Adobe earned $4.48 a share, while analysts tracked by FactSet were modeling $4.39 a share.

Revenue rose to $5.31 billion from $4.82 billion, whereas the FactSet consensus was for $5.29 billion.

"Our highly differentiated approach to AI and innovative product delivery are attracting an expanding universe of customers and providing more value to existing users," Chief Executive Shantanu Narayen said in a release.

Adobe's results offered some relief to investors after a shaky start to the year for the company's shares. They had lost 23% over the course of 2024 through Thursday's close, with that decline reflecting general software-industry pressures as well as concerns about how much - and how quickly - Adobe would be able to reap the financial rewards of its artificial-intelligence efforts.

Digital Media revenue, which includes Creative Cloud and Document Cloud, grew 11% to $3.91 billion, while analysts were modeling $3.89 billion. Adobe's Digital Experiene business, which houses products for data insights and commerce, saw a 9% revenue bump to $1.33 billion; analysts had been projecting $1.32 billion.

"Our market-leading products, strong execution and world-class financial discipline position us well for the second half of 2024 and beyond," Chief Financial Officer Dan Durn said in the release.

For the fiscal third quarter, Adobe is modeling $5.33 billion to $5.38 billion in revenue, while analysts were looking for $5.40 billion. The company's forecast also calls for $4.50 to $4.55 in adjusted earnings per share, which compares with the $4.47 consensus view.

The company's revenue outlook for the full fiscal year is for $21.40 billion to $21.50 billion, along with $18.00 to $18.20 in adjusted earnings per share. Analysts were modeling $21.47 billion and $18.00, respectively.

Adobe said it was boosting its forecasts for Digital Media net new annual recurring revenue, Digital Experience subscription revenue and earnings per share. Digital Media net new annual recurring revenue is now expected to be about $1.95 billion, while Digital Experience subscription revenue is anticipated to come in at $4.775 billion to $4.825 billion.

-Emily Bary

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06-13-24 2026ET

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