Adobe surprises investors, beats on earnings
Creative software giant Adobe, the company behind studio-staples like Photoshop and InDesign, reported earnings last week. The company managed to surprise investors, beating the Street on earnings – although it (very) narrowly missed revenue expectations. Despite that wobble, Adobe’s results were positive across the board, and demonstrate a strong underlying business. However, guidance for the current quarter that came in lower than analysts would like took a little shine off the company’s share price.
Adobe’s share price has appreciated by 15% year to date
Source: Yahoo Finance
Adobe’s non-GAAP earnings easily outpaced analysts’ expectations, coming in at $1.71 per share rather than $1.62. On revenue, the company didn’t do quite as well, returning $2.55 billion. Analysts had hoped to see $2.6 billion.
Looking further into those figures, Adobe said subscription revenue made up the overwhelming bulk of the total at $2.3 billion. Product revenue was $170 million, and services and support revenue hit $125 million. The company’s digital media unit rose to $1.78 billion, of which Creative Cloud revenue stood at $1.49 billion.
These strong results demonstrate what graphic designers and art directors around the world already know: that Adobe is the undisputed market leader in its territory.
Analysts are hoping to see earnings of “at least” $1.88 per share on revenue of $2.72 billion. Adobe is less optimistic, and sees earnings coming in at $1.77 on revenues of $2.70 billion.
The company’s CEO, Shantanu Narayen, said: “Adobe is fueling the creative economy, driving the paper-to-digital revolution and enabling businesses to transform through our leadership in customer experience management. Our results in Q1 reflect continued momentum across Adobe Creative Cloud, Document Cloud and Experience Cloud.”
Dominion holds Adobe in its Global Trends Ecommerce Fund.
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