- Adobe’s adjusted earnings per share (EPS) for the fourth quarter was $5.50, surpassing the previous year’s $4.81 and exceeding the estimate of $5.39.
- The company’s revenue rose to $6.19 billion, marking a 10% increase year-over-year, and it outpaced the expected $6.11 billion.
- Digital experience revenue grew by 8.6% year-over-year, reaching $1.52 billion, slightly above the $1.51 billion estimate.
- Subscription revenue saw a 12% increase year-over-year to $5.99 billion, higher than the expected $5.9 billion.
- Product revenue decreased by 8.6% year-over-year but still managed to slightly exceed estimates with $74 million, compared to a $70.6 million forecast.
- Remaining performance obligations amounted to $22.52 billion, a 13% increase from the previous year, and above the estimate of $22.28 billion.
- Research and development (R&D) expenses were $1.10 billion, which is a 9.9% rise year-over-year and in line with expectations.
- Adjusted operating income stood at $2.82 billion, marking an 8.8% increase year-over-year and exceeding the estimate of $2.78 billion.
- Services and other revenue fell by 18% year-over-year to $131 million, which was below the estimated $138.1 million.
- Adobe exceeded its fiscal year 2025 Digital Media ending ARR target and aims for a total Adobe ending ARR growth of over 10% in fiscal year 2026.
- Adobe shares rose by 4.4% in post-market trading, reaching $358.09, with 17,354 shares traded.
Adobe Systems on Smartkarma
Analysts on Smartkarma, like Baptista Research, have been closely monitoring Adobe Systems Incorporated, highlighting the company’s robust financial performance. In the third quarter of fiscal year 2025, Adobe reported record revenue of $5.99 billion, showcasing a 10% year-over-year increase. This growth was fueled by a strategic focus on artificial intelligence (AI) integration, evident in Adobe’s flagship Creative Cloud applications such as Photoshop and Illustrator. Analysts view Adobe’s emphasis on AI as a key driver for continued growth and profitability.
Baptista Research, among other analysts, also noted Adobe’s strong performance in the second quarter of fiscal year 2025. With total revenue hitting $5.87 billion, an 11% year-over-year increase, Adobe demonstrated a solid financial foundation. Particularly, the Digital Media sector’s revenue of $4.35 billion and annual recurring revenue (ARR) of $18.09 billion were highlighted as significant contributors to Adobe’s overall success. Analysts are optimistic about Adobe’s potential to leverage AI innovations through initiatives like Firefly and GenStudio to redefine creative monetization and further drive revenue growth.
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 Incorporated, a leading software development company, has received mixed Smart Scores across different factors. With a strong focus on growth and resilience, scoring 4 out of 5 in both categories, Adobe is positioned well for long-term success. Its emphasis on innovation and adaptability in the ever-evolving tech landscape bodes well for sustainable growth and stability.
However, the company falls short in terms of value and dividends, scoring 2 and 1 respectively. This suggests that investors may not find Adobe Systems to be a high-value investment or a significant source of dividend income. Despite these lower scores, Adobe’s promising growth prospects and strong resilience could make it an attractive choice for those seeking long-term capital appreciation in the software 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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