Adobe (ADBE) Reports Q1: Everything You Need To Know Ahead Of Earnings

Max Juang /
2024/03/13 3:01 am EDT

Creative software maker Adobe (NASDAQ:ADBE) will be announcing earnings results tomorrow after market hours. Here's what investors should know.

Last quarter Adobe reported revenues of $5.05 billion, up 11.6% year on year, in line with analyst expectations. It was a mixed quarter for the company, with revenue, adjusted operating income, and EPS exceeding expectations. These beats were driven by outperformance in its digital media and digital experience segments. Next quarter's earnings guidance also exceeded Wall Street's estimates. 

On the other hand, this quarter's free cash flow missed expectations, and its full-year FY24 revenue guidance was below estimates, with management providing a weaker outlook for digital media net new ARR and digital experience subscription revenue.

Is Adobe buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Adobe's revenue to grow 10.5% year on year to $5.15 billion, improving on the 9.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $4.38 per share.

Adobe Total Revenue

The analysts covering the company have had mixed opinions about the business heading into the earnings, with revenue estimates seeing three upward and three downward revisions over the last thirty days. The company missed Wall St's revenue estimates twice over the last two years.

With Adobe being the first among its peers to report earnings this season, we don't have anywhere else to look at to get a hint at how this quarter will unravel for vertical software stocks, but investors in the segment have had steady hands going into the earnings, with the stocks up on average 0.9% over the last month. Adobe is down 3.5% during the same time, and is heading into the earnings with with analyst price target of $645.1, compared to share price of $581.1.

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