- Adobe’s Q1 adjusted earnings per share (EPS) were $5.08, surpassing both last year’s $4.48 and the estimated $4.97.
- The company’s Q1 revenue reached $5.71 billion, a 10% year-over-year increase, exceeding the estimated $5.66 billion.
- Digital experience revenue rose 9.3% year-over-year to $1.41 billion, slightly above the estimate of $1.4 billion.
- Subscription revenue grew by 12% year-over-year, hitting $5.48 billion, above the estimated $5.42 billion.
- Product revenue amounted to $95 million, a 20% decrease year-over-year, closely aligning with the $95.4 million forecast.
- Research and development expenses increased 9.3% year-over-year to $1.03 billion, exceeding the estimated $1.01 billion.
- Adjusted operating income was $2.72 billion, up 10% year-over-year, outperforming the estimated $2.66 billion.
- Services and other revenue decreased by 7.5% year-over-year to $136 million, below the $144.3 million estimate.
- For Q2, Adobe forecasts adjusted EPS between $4.95 and $5.00, compared to an estimate of $5.00.
- Q2 revenue is expected to be between $5.77 billion and $5.82 billion, with an estimate of $5.8 billion.
- Digital media revenue for Q2 is projected to range from $4.27 billion to $4.30 billion, meeting the $4.28 billion estimate.
- Adobe anticipates digital experience revenue for Q2 to be between $1.43 billion and $1.45 billion, with a $1.45 billion estimate.
- Q2 digital experience subscription revenue is forecasted between $1.32 billion and $1.33 billion, aligning with the $1.33 billion estimate.
- CEO Shantanu Narayen emphasized Adobe’s focus on customer-focused innovation and new offerings for various professionals and consumers.
- Narayen also highlighted Adobe’s strategic positioning to leverage the creative economy acceleration driven by AI, reaffirming FY2025 targets.
- Analyst recommendations include 33 buys, 13 holds, and 2 sells for Adobe.
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Adobe Systems on Smartkarma
On Smartkarma, independent analysts like Baptista Research provide in-depth insights into companies like Adobe Systems. Baptista Research‘s coverage of Adobe Systems highlights the strategic product tiering and monetization as key factors driving growth. The recent earnings release of Adobe Systems showcased consistent growth and innovation, with record revenue of $21.51 billion for the fiscal year 2024, representing an 11% year-over-year increase. This growth was primarily driven by strong performance in the Digital Media and Digital Experience divisions.
Furthermore, Baptista Research‘s report titled “Adobe’s Winning Formula for Double-Digit Growth” emphasizes the success of Adobe in achieving substantial year-over-year revenue growth. In the third quarter of fiscal year 2024, Adobe reported revenue of $5.41 billion, marking an 11% increase from the previous year. The consistent strength in Creative Cloud, Document Cloud, and Experience Cloud has been instrumental in driving this growth trajectory for Adobe Systems.
A look at Adobe Systems Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 1 | |
| Growth | 4 | |
| Resilience | 4 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 2.8 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Adobe Systems, a company known for its computer software products, has received mixed scores in various areas indicating the company’s overall outlook. While scoring high in growth and resilience at 4 out of 5 each, indicating a positive future trajectory and stability in challenging times, Adobe falls short in terms of value and dividend with scores of 2 and 1 respectively. Momentum, the measure of the speed at which a security’s price is advancing, scored a moderate 3. This suggests that Adobe is positioned for growth and has the ability to withstand market volatility but may not appeal as much to income-focused investors due to lower dividend potential.
With its strong emphasis on product development and market stability, Adobe Systems is poised for growth in the long term. Its high scores in growth and resilience indicate a solid foundation for future success. However, investors seeking value or dividend income may look to other options. The momentum score suggests a steady but not rapid rise in the company’s stock prices. Overall, Adobe’s focus on developing and supporting computer software products positions it well for continued success in the industry.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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