Adobe Q2 earnings report exceeded analysts' estimates on revenue and earnings per share.
Adobe Systems (ADBE) reported Q2 earnings per share of $3.35, which is above the analysts' estimate of $3.30. This compared to earnings per share of $3.03 a year ago. These values have been modified to account for non-recurring items. Adobe reported revenues of $4.39 billion for the quarter ending May 2022, 1.11 percent higher than the analysts' estimate. This compared to $3.84 billion in revenues the previous year. Over the previous four quarters, Adobe has outperformed consensus EPS and revenue estimates four times.
This quarter's report represents a 1.52 percent earnings surprise. This software maker's earnings were predicted to be $3.34 per share a quarter ago, but it actually earned $3.37, generating a 0.90 percent surprise.
Adobe shares fell as much as 5% in extended trading on Thursday, after the maker of software for creativity, marketing, and documentation issued a weaker-than-expected outlook for both the August quarter and the entire fiscal year ending in November. Adobe is experiencing the consequences of both increasing headwinds from poor foreign exchange rates and the aftermath of Ukraine's war.
The company has cut its outlook for the whole fiscal year. It forecasted adjusted earnings per share of $13.50 on $17.65 billion in revenue. Refinitiv surveyed analysts and predicted $13.66 adjusted EPS and $17.85 billion in revenue. In December, the company forecasted $13.70 in adjusted EPS and $17.90 billion in revenue for the fiscal year 2022.
The Digital Experience division, which comprises Adobe's Experience Cloud for marketing and commerce, generated $1.10 billion, a 17 percent increase above the StreetAccount estimate of $1.08 billion.
Adobe's Digital Media business, which includes Creative Cloud and Document Cloud products, reported revenue of $3.20 billion, a 15% increase above the StreetAccount estimate of $3.16 billion.
Adobe reported $4.88 billion in deferred revenue at the end of the third quarter, down from $5.02 billion three months earlier and below the StreetAccount average of $5.00 billion. Its cash, cash equivalents, and short-term investments totaled more than $5 billion. While Adobe does not need to add anything to its portfolio, CEO Shantanu Narayen stated that the business would be searching for acquisition candidates now that prices may be more affordable than they were previously.
On a conference call with analysts, Adobe's finance head, Dan Durn, described the quarter's economic climate as "uncertain." He stated that management was pleased with the company's achievement in attracting talent in what he described as a competitive labor market.
