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Adobe Surfs Ai Wave to Post Record Revenue as Its Stock Soars After Earnings

June 14, 2024
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Adobe Inc.'s stock surged by 15% during Thursday's extended trading session following the company's impressive earnings results and optimistic guidance.

For the fiscal second quarter, Adobe reported a net income of $1.57 billion, or $3.49 per share, up from $1.30 billion, or $2.82 per share, in the same period last year. On an adjusted basis, Adobe earned $4.48 per share, surpassing analysts' expectations of $4.39 per share as tracked by FactSet. Revenue increased to $5.31 billion from $4.82 billion, slightly above the FactSet consensus of $5.29 billion.

"Our unique approach to AI and innovative product offerings are attracting a growing number of customers and providing more value to our existing users," stated Chief Executive Shantanu Narayen in a release.

These results provided some relief to investors, given Adobe's challenging start to 2024. The company's shares had dropped by 23% through Thursday’s close, reflecting both broader industry pressures and uncertainties about the pace and extent of financial benefits from Adobe’s artificial-intelligence initiatives.

In particular, Adobe's Digital Media revenue, which includes Creative Cloud and Document Cloud, grew by 11% to $3.91 billion, exceeding analysts' expectations of $3.89 billion. The Digital Experience segment, encompassing data insights and commerce products, saw a 9% revenue increase to $1.33 billion, slightly ahead of the projected $1.32 billion.

"Our leading products, effective execution, and rigorous financial discipline position us well for the second half of 2024 and beyond," commented Chief Financial Officer Dan Durn in the release.

Looking ahead to the fiscal third quarter, Adobe anticipates revenue between $5.33 billion and $5.38 billion, just below the analysts' expectation of $5.40 billion. The forecasted adjusted earnings per share range from $4.50 to $4.55, compared to the consensus estimate of $4.47.

For the entire fiscal year, Adobe projects revenue between $21.40 billion and $21.50 billion, along with adjusted earnings per share ranging from $18.00 to $18.20. Analysts had anticipated figures of $21.47 billion and $18.00 per share, respectively.

Adobe also announced an upward revision of its forecasts for Digital Media net new annual recurring revenue, Digital Experience subscription revenue, and overall earnings per share. The company now expects Digital Media net new annual recurring revenue to be approximately $1.95 billion. Additionally, Digital Experience subscription revenue is forecasted to be between $4.775 billion and $4.825 billion.

Bryan Curtis
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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