Digital media and marketing software firm Adobe on Thursday topped Wall Street's earnings target while revenue met views for its fiscal fourth quarter. Guidance for Adobe stock came in mixed, with current-quarter revenue forecasts slightly below expectations.
Adobe said it earned an adjusted $3.60 per share on sales of $4.53 billion in the quarter ended Dec. 2. Also, analysts polled by FactSet expected Adobe earnings of $3.50 a share on sales of $4.53 billion. On a year-over-year basis, earnings rose 12% while sales increased 10%.
The software maker took in nearly three quarters of its revenue from digital media products during the quarter. Digital media revenue rose 10% to 3.3 billion, in line with estimates.
The San Jose, Calif.-based company reported after the market close.
Adobe Stock: Annual Recurring Revenue Beats Views
Net new annual recurring revenue, or ARR, for digital media products came in at $576 million, topping estimates of $551.2 million. Because Adobe sells software on a per-seat subscription basis, analysts have pondered whether job cuts will impact 2023 revenue.
"Adobe delivered a positive quarter highlighted by net-new digital media ARR at $576 million vs. consensus of $551 million, or a beat of 4.5%," RBC Capital analyst Matthew Swanson said in a note to clients.
For the current quarter, Adobe predicted adjusted earnings in a range of $3.65 to $3.70 per share on sales of $4.62 billion. Meanwhile, analysts were looking for earnings of $3.64 a share on sales of $4.63 billion in the fiscal first quarter.
Adobe said it expects net new digital media ARR of $375 million vs. analyst estimates of $361 million for its fiscal first quarter.
On the stock market today, Adobe stock climbed 5.2% to near 346 in extended trading. In Thursday's regular session, shares fell 3.3%. Adobe stock has retreated some 40% in 2022.
Figma Deal Under Review
At an analyst meeting in mid-October, Adobe offered preliminary fiscal 2023 guidance.
Amid headwinds from currency exchange rates, Adobe predicted adjusted earnings of $15.30 a share and revenue of $19.2 billion. Further, those estimates are at the midpoint of the company's forecasts.
Regulators are reviewing Adobe's proposed $20 billion acquisition of Figma, a web-first collaborative design platform. Some Adobe stock analysts say the deal could be blocked.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
