Adobe earnings report brings records, but stock falls as outlook underwhelms

By Emily Bary

Adobe hit a revenue record in the latest quarter

Adobe Inc. forecast lower-than-expected revenue for the current quarter, and its stock was falling in Thursday's after-hours action.

The software company anticipates $5.5 billion to $5.55 billion in revenue for the fiscal fourth quarter, below the $5.6 billion that analysts tracked by FactSet were expecting.

On a section level, the company is looking for $4.09 billion to $4.12 billion in revenue from its digital-media unit, which houses Creative Cloud and Document Cloud. Analysts had been modeling $4.14 billion. Adobe (ADBE) also projects $1.36 billion to $1.38 billion in revenue from its digital-experience segment, which includes offerings related to data insights and commerce. The FactSet consensus for that unit was $1.40 billion.

Adobe targets $4.63 to $4.68 in adjusted earnings per share for the ongoing quarter, whereas analysts had been projecting $4.67.

Shares of Adobe fell 9% in the extended session.

That outlook overshadowed results from the latest quarter, which included some records.

Adobe hauled in revenue of $5.41 billion for the fiscal third quarter, up 11% from a year before, whereas analysts were looking for $5.37 billion. On a segment level, digital-media revenue grew 11% to $4.00 billion and slightly exceeded the FactSet consensus of $3.97 billion, while digital-experience revenue amounted to $1.35 billion, up 10%. Analysts were looking for $1.34 billion from that category.

The company said its revenue total was a record, as was the $504 million in net new annual recurring revenue for the digital-media segment. That came in well above the $462 million consensus view on the metric.

The company also said it had record remaining performance obligations, "demonstrating the power of combining growth with world-class profitability," according to Chief Financial Officer Dan Durn in a statement.

"Given the massive markets we are catalyzing, I'm confident in our ability to drive growth and industry leadership," he added.

Adobe posted net income of $1.68 billion, or $3.76 a share, compared with $1.40 billion, or $3.05 a share, in the year-earlier period. On an adjusted basis, the company earned $4.65 a share, whereas analysts were projecting $4.53 a share.

See also: Oracle's stock soars as earnings bring three big positives

Don't miss: 15 companies that have rewarded long-term shareholders with high dividend income

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-12-24 2010ET

Copyright (c) 2024 Dow Jones & Company, Inc.