Shantanu Narayen, CEO of Adobe
Mark Neuling | CNBC
Adobe shares rose 6% in prolonged trading on Thursday after the design software maker announced fiscal fourth-quarter earnings and forecasts that beat analyst expectations.
Here’s how the corporate fared:
- Profits: $3.60 per share, adjusted from $3.50 per share, consistent with analyst expectations, in line with Refinitiv.
- Income: $4.53 billion versus $4.53 billion analysts had expected, in line with Refinitiv.
Total revenue was up 10% year-on-year within the quarter ending December 2, in line with a statement. Within the previous quarter, revenue increased by 13%. Net income of $1.18 billion declined barely from $1.23 billion in the identical quarter last yr.
“We achieved record money flows from operations while specializing in profitability,” CEO Shantanu Narayen told analysts in a conference call. He said the corporate stays cautious and is not going to be resistant to a deteriorating economy.
As for guidance, Adobe requested $3.65 to $3.70 in adjusted earnings per share on revenue of $4.60 to $4.64 billion within the fiscal first quarter. Analysts polled by Refinitiv had expected $3.64 adjusted earnings per share and $4.64 billion in revenue. Figures don’t include Figma’s strike. The corporate maintained its guidance for the whole thing of fiscal yr 2023.
Adobe’s Digital Media division, which incorporates subscriptions to Creative Cloud design software, brought in $3.30 billion in revenue, not quite matching StreetAccount’s $3.31 billion consensus. Creative industry revenue grew 8% this quarter. The Digital Experience unit, which incorporates Adobe’s marketing software, brought in $1.15 billion in revenue, just over the $1.14 billion StreetAccount consensus.
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Digital Experiences has successfully closed “quite a few transformative deals that span our portfolio of solutions,” said Anil Chakravarthy, president of the division.
This quarter, Adobe said it might buy design software start-up Figma for around $20 billion within the largest-ever deal for a 40-year-old public company.
“Overall, the regulatory process is progressing as expected,” said David Wadhwani, president of Digital Media. The U.S. Department of Justice and the U.K. Competition and Markets Authority are reviewing the deal, and Adobe still expects it to be finalized in 2023, Wadhwani said.
One analyst asked how Figma was coping with the present economic situation. But for now, FIgma continues to be a non-public company, and Adobe is just not ready to debate Figma’s latest developments, Narayen said.
With the after-hours effect removed, Adobe shares are down 42% this yr, while the S&P 500 index is down 18% over the identical period.
WATCH: Adobe forecasts Cyber Monday sales to extend by 5.3% year-on-year