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Adobe reported revenue of $4.66 billion, up 9% from a year ago.
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Adobe
rallied in late trading Wednesday after the content development and marketing software company posted quarterly earnings that topped its own guidance, as well as Wall Street estimates. The company also boosted its full-year outlook.
Adobe (ticker: ADBE) shares were up 4.5% in the after hours session, to $348.73.
Adobe said that the strong results reflect demand for digital content creation tools, despite a softer economy.
“Digital is reshaping how we connect and engage with the world around us,” CEO Shantanu Narayen said in remarks prepared for the company’s quarterly earnings call with analysts.
The company also made it clear that it intends to fight any attempt by regulators to block the company’s pending $20 billion acquisition of the collaborative design tool provider Figma. Recent reports suggested that the U.S. Department of Justice was planning to opposed the proposed combination.
Adobe CFO Dan Durn said in an interview with Barron’s that “the facts are clear,” and that the company is “confident” in its view that the deal doesn’t violate antitrust regulations. “We’re in a good spot,” he says. The company continues to expect the deal to close before year end.
“The potential combination continues to be well-received by customers, industry analysts and partners,” CEO Shantanu Narayen added in a statement. “We are preparing for integration as we work through the regulatory process. From the outset, we have been well-prepared for all potential scenarios, while realistic about the regulatory environment. We have completed the discovery phase of the U.S. DOJ second request and are prepared for next steps, whether that is an approval or a challenge.”
For the fiscal first quarter ended March 3, Adobe reported revenue of $4.66 billion, up 9% from a year ago, or 13% adjusted for currency. Guidance had called for revenue of between $4.6 billion and $4.64 billion; Wall Street consensus was $4.62 billion.
On an adjusted basis, Adobe earned $3.80 a share in the quarter, above both the guidance range of $3.65 to $3.70 a share and Wall Street consensus of $3.68. Under generally accepted accounting principles, the company earned $2.71 a share in the quarter.
Adobe said revenue from its digital media segment was $3.4 billion, up 9%, while digital experience segment revenue was $1.18 billion, up 11%. Net new digital media annualized recurring revenue—a measure that speaks to the health of the company’s subscription-based software business—was $410 million, boosting total digital media ARR to $13.67 billion.
For the fiscal second quarter, Adobe sees revenue ranging from $4.75 billion to $4.78 billion, with non-GAAP profits of $3.75 to $3.80 a share, and GAAP earnings of $2.65 to $2.70 a share. The company sees digital media net new ARR of about $420 million.
The company now sees full-year non-GAAP profits ranging from $15.30 to $15.60 a share, up from a previous forecast of $15.15 to $15.45 a share.
Meanwhile, Adobe plans to announce some new initiatives in generative artificial intelligence next week at a user conference in Las Vegas.
Write to Eric J. Savitz at eric.savitz@barrons.com
