Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Equity Bottom-Up

<ul>
<li>The SaaSpocalypse has hurt many software and enterprise companies indiscriminately</li>
<li>NEC is more insulated with its government customers and should benefit from AI deployment</li>
<li>Its higher-margin defence business is growing faster, improving earnings and stability.</li>
</ul>


The SaaSpocalypse has hurt many software and enterprise companies indiscriminately
NEC is more insulated with its government customers and should benefit from AI deployment
Its higher-margin defence business is growing faster, improving earnings and stability.


NEC (6701.T) - Has the Baby Been Thrown Out with the Bathwater?

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Adobe Systems Incorporated has reported strong financial results for the third quarter of fiscal year 2025, showcasing continued double-digit growth in both revenue and profitability, driven largely by its strategic emphasis on artificial intelligence (AI).</li><li>The company saw record revenue of $5.99 billion, marking a 10% increase year-over-year, while GAAP earnings per share reached $4.18 and non-GAAP earnings per share was $5.31, reflecting an impressive 14% growth.</li><li>The incorporation of AI into Adobe's product suite has been a significant focus, as exemplified by the deployment of AI innovations across its flagship Creative Cloud applications like Photoshop, Illustrator, and Premiere Pro.</li></ul>

Adobe Systems Incorporated has reported strong financial results for the third quarter of fiscal year 2025, showcasing continued double-digit growth in both revenue and profitability, driven largely by its strategic emphasis on artificial intelligence (AI).The company saw record revenue of $5.99 billion, marking a 10% increase year-over-year, while GAAP earnings per share reached $4.18 and non-GAAP earnings per share was $5.31, reflecting an impressive 14% growth.The incorporation of AI into Adobe's product suite has been a significant focus, as exemplified by the deployment of AI innovations across its flagship Creative Cloud applications like Photoshop, Illustrator, and Premiere Pro.

Is Adobe’s Creative AI Integration Enough To Fight Off Canva?

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Adobe reported 3QFY25 results: total revenue was up by 11% YoY to US$5.99bn, and non-GAAP net income increased by 8% YoY to US$2.25bn, both largely in line with consensus estimates.</li><li>AI product momentum was better than expectation, with AI-influenced ARR surpassing US$5bn and AI-first ARR exceeding US$250mn year-end target one quarter ahead.</li><li>Given the solid momentum of AI solutions and strong go-to-market execution, the company raises FY25 total revenue guidance to US$23.65-23.70bn (previous: US$23.50- 23.60bn) and digital media ending ARR growth to +11.3% YoY (previous: +11.0% YoY). </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Adobe reported 3QFY25 results: total revenue was up by 11% YoY to US$5.99bn, and non-GAAP net income increased by 8% YoY to US$2.25bn, both largely in line with consensus estimates.AI product momentum was better than expectation, with AI-influenced ARR surpassing US$5bn and AI-first ARR exceeding US$250mn year-end target one quarter ahead.Given the solid momentum of AI solutions and strong go-to-market execution, the company raises FY25 total revenue guidance to US$23.65-23.70bn (previous: US$23.50- 23.60bn) and digital media ending ARR growth to +11.3% YoY (previous: +11.0% YoY). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Adobe (ADBE US) - 3QFY25 Results Review: Better-Than-Expected AI Monetization

<ul><li>Adobe Inc.'s second quarter financial results for fiscal year 2025 demonstrate a strong performance, marked by significant revenue growth and strategic advancements in its core business segments.</li><li>The company's total revenue reached $5.87 billion, an 11% increase year-over-year, with a noteworthy contribution from its Digital Media sector, which achieved $4.35 billion in revenue.</li><li>This sector's annual recurring revenue (ARR) grew to $18.09 billion, reflecting a 12.1% increase.</li></ul>

Adobe Inc.'s second quarter financial results for fiscal year 2025 demonstrate a strong performance, marked by significant revenue growth and strategic advancements in its core business segments.The company's total revenue reached $5.87 billion, an 11% increase year-over-year, with a noteworthy contribution from its Digital Media sector, which achieved $4.35 billion in revenue.This sector's annual recurring revenue (ARR) grew to $18.09 billion, reflecting a 12.1% increase.

Adobe Has The Potential To Turn AI Into Billions—Can Firefly & GenStudio Redefine Creative Monetization?

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Capital Markets

<ul>
<li>Figma Inc. is planning to go public in the second half of July. The amount the company intends to raise is not yet disclosed, but it's likely to exceed $1B.</li>
<li>I like Figma’s high growth, rule of 60 story, cash flow generation and solid balance sheet. They are profitable and still growing 40%+ YoY while doing $800M+ in LTM revenue.</li>
<li>I believe Figma’s premium multiple is justified given its best-in-class metrics, top-tier VC investors and Adobe’s attempt to acquire the design software maker for ~$20B in 2022.</li>
</ul>


Figma Inc. is planning to go public in the second half of July. The amount the company intends to raise is not yet disclosed, but it's likely to exceed $1B.
I like Figma’s high growth, rule of 60 story, cash flow generation and solid balance sheet. They are profitable and still growing 40%+ YoY while doing $800M+ in LTM revenue.
I believe Figma’s premium multiple is justified given its best-in-class metrics, top-tier VC investors and Adobe’s attempt to acquire the design software maker for ~$20B in 2022.


Figma IPO Valuation Analysis: Premium Multiple Is Deserved, High Growth and Rule of 60 Story

United States

Adobe Systems Incorporated develops, markets, and supports computer software products and technologies.  The Company's products allow users to express and use information across all print and electronic media.  Adobe offers a line of application software products, type products, and content for creating, distributing, and managing information.

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Adobe Systems (ADBE US)

NEC (6701.T) - Has the Baby Been Thrown Out with the Bathwater?

While the SaaSpocalypse has negatively impacted software companies, NEC's government contracts and key defence business are less susceptible to...

Rikki Malik

Is Adobe’s Creative AI Integration Enough To Fight Off Canva?

Adobe Systems Incorporated has reported strong financial results for the third quarter of fiscal year 2025, showcasing continued double-digit...

Baptista Research

Adobe (ADBE US) - 3QFY25 Results Review: Better-Than-Expected AI Monetization

Adobe reported 3QFY25 results: total revenue was up by 11% YoY to US$5.99bn, and non-GAAP net income increased by 8% YoY to US$2.25bn, both largely...

CMB International

Adobe Has The Potential To Turn AI Into Billions—Can Firefly & GenStudio Redefine Creative Monetization?

Adobe Inc.'s second quarter financial results for fiscal year 2025 demonstrate a strong performance, marked by significant revenue growth and...

Baptista Research

Figma IPO Valuation Analysis: Premium Multiple Is Deserved, High Growth and Rule of 60 Story

Figma Inc. is expected to IPO in July, likely raising over $1B with strong growth, cash flow generation, and potential premium valuation justified...

Andrei Zakharov

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Market Cap (USDm)

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NEC (6701.T) - Has the Baby Been Thrown Out with the Bathwater?

​While the SaaSpocalypse has negatively impacted software companies, NEC's government contracts and key defence business are less susceptible to...

Rikki Malik

Is Adobe’s Creative AI Integration Enough To Fight Off Canva?

Adobe Systems Incorporated has reported strong financial results for the third quarter of fiscal year 2025, showcasing continued double-digit...

Baptista Research

Adobe (ADBE US) - 3QFY25 Results Review: Better-Than-Expected AI Monetization

Adobe reported 3QFY25 results: total revenue was up by 11% YoY to US$5.99bn, and non-GAAP net income increased by 8% YoY to US$2.25bn, both largely...

CMB International

Adobe Has The Potential To Turn AI Into Billions—Can Firefly & GenStudio Redefine Creative Monetization?

Adobe Inc.'s second quarter financial results for fiscal year 2025 demonstrate a strong performance, marked by significant revenue growth and...

Baptista Research

Figma IPO Valuation Analysis: Premium Multiple Is Deserved, High Growth and Rule of 60 Story

​Figma Inc. is expected to IPO in July, likely raising over $1B with strong growth, cash flow generation, and potential premium valuation justified...

Andrei Zakharov

While the SaaSpocalypse has negatively impacted software companies, NEC's government contracts and key defence business are less susceptible to...

Figma Inc. is expected to IPO in July, likely raising over $1B with strong growth, cash flow generation, and potential premium valuation justified...