Adobe CEO Shantanu Narayen speaks during an interview with CNBC on the floor at the New York Stock Exchange on February 20, 2024.
Brendan Mcdermid | Reuters
Adobe shares jumped 15% on Friday, their biggest gain since March 2020, after the software maker reported earnings and revenue that beat analysts’ estimates.
After the bell on Thursday, Adobe reported earnings per share of $4.48, above LSEG’s consensus estimate of $4.39 per share. Revenue rose 10% from a year earlier to $5.31 billion, exceeding analysts’ estimates of $5.29 billion.
CEO Shantanu Narayen attributed Adobe’s record revenue to strong growth in Creative Cloud, Document Cloud and Experience Cloud as well as advances in artificial intelligence.
“Our highly differentiated approach to AI and innovative product delivery is attracting an expanding customer base and delivering more value to existing users,” Narayen said. Press Release on Thursday.
New annual recurring revenue for the Digital Media business, which includes Creative Cloud subscriptions, came in at $487 million, beating the StreetAccount consensus of $437.4 million.
Adobe’s results are contrary to what software investors have seen from many. industry colleagues last. Sales force The stock suffered its worst decline since 2004 late last month after the cloud software provider posted weaker-than-expected revenue and gave disappointing forecasts. That same week, MongoDB, SentinelOne, UiPath and Veeva both lowered their full-year revenue forecasts.
However, this week there have been positive signs in this area. Prophecy Stock price increases after database company announced cloud deals with Google and OpenAI, even if fourth-quarter results fell short of Wall Street’s expectations. The crowd went on strike jumped on Monday following last Friday’s post-closing announcement that the cybersecurity company would added to the S&P 500.
JMP analysts, who have similar ratings to Adobe, wrote in a post-earnings note that the company’s results are improving despite the challenging economic environment and competition. increasingly growing in the field of design software.
“We like how Adobe is integrating AI functionality into its product portfolio,” the analysts wrote.
Meanwhile, analysts from Piper Sandler increased their revenue estimates by $73 million for fiscal 2024 and by $71 million for 2025.
“Customer response to recent innovations has been encouraging, given the growing availability of support solutions,” wrote Piper Sandler analysts, who recommend buying the stock. AI is expected to drive “more user acquisition” and better average revenue per user.
Even after Friday’s rally, Adobe stock is still down 12% for the year. Shares were trading at $525.88 in the afternoon.
