Adobe gains 15% in pre-market trading after robust Q2 earnings 📃

Adobe (ADBE.US) reported second-quarter earnings for 2024 that exceeded Wall Street expectations, driving its shares up by 17% in after-hours trading. The software giant posted an adjusted earnings per share (EPS) of $4.48, surpassing the consensus estimate of $4.39, and revenue of $5.31 billion, beating the expected $5.29 billion. For the third quarter, Adobe forecasts an EPS range of $4.50 to $4.55, higher than the consensus estimate of $4.48, although its revenue projection of $5.33 billion to $5.38 billion fell short of the anticipated $5.4 billion.

Q3 2024 FY Targets:

• Total revenue: $5.33 billion to $5.38 billion
• Digital Media net new ARR: ~$460 million
• Digital Media segment revenue: $3.95 billion to $3.98 billion
• Digital Experience segment revenue: $1.325 billion to $1.345 billion
• Digital Experience subscription revenue: $1.20 billion to $1.22 billion
• Earnings per share:
  • GAAP: $3.45 to $3.50
  • Non-GAAP: $4.50 to $4.55

2024 FY Targets:

• Total revenue: $21.40 billion to $21.50 billion
• Digital Media net new ARR: ~$1.95 billion
• Digital Media segment revenue: $15.80 billion to $15.85 billion
• Digital Experience segment revenue: $5.325 billion to $5.375 billion
• Digital Experience subscription revenue: $4.775 billion to $4.825 billion
• Earnings per share:
  • GAAP: $11.80 to $12.00
  • Non-GAAP: $18.00 to $18.20

Adobe raised its full-year 2024 guidance, now expecting an EPS of $18 to $18.20, compared to the previous estimate of $17.60 to $18 and the consensus of $18.02. The company projects full-year revenue between $21.4 billion and $21.5 billion, slightly below the expected $21.46 billion. 

• Innovative AI Integration - Adobe's management emphasized the company's distinguished approach to AI, highlighting the integration of AI functionalities across all its offerings, including Creative Cloud, Document Cloud, and Experience Cloud. AI will enhance human creativity and productivity, with Firefly AI models generating significant user engagement.

• Customer and Market Growth - Adobe's CEO, Shantanu Narayen, attributed the company's success to its innovative product roadmap and growing customer base. 

• Experience Cloud and AEP AI Assistant - Adobe Experience Platform (AEP) is on track to become a billion-dollar business, with enhancements like the AEP AI Assistant boosting marketing productivity. Experience Cloud revenue reached $1.33 billion, with a 13% year-over-year growth in subscription revenue.

Adobe (ADBE.US) shares gain 15.60% in pre-market to $530 per share. 

Source: xStation 5