What To Expect From Adobe’s (ADBE) Q4 Earnings

Max Juang /
2023/12/12 2:01 am EST

creative software maker Adobe (NASDAQ:ADBE) will be reporting results tomorrow after market close. Here's what to expect.

Last quarter Adobe reported revenues of $4.89 billion, up 10.3% year on year, in line with analyst expectations. It was a decent quarter for the company, with total digital media ARR (annual recurring revenue) and reported revenue roughly in line with expectations. In addition, Adobe beat analysts' EPS expectations on stronger profitability. Looking ahead, next quarter's much-watched Digital Media net new ARR and earnings guidance exceeded Wall Street's estimates.

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 10.9% year on year to $5.02 billion, in line with the 10.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $4.14 per share.

Adobe Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. 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 there has been positive sentiment among investors in the segment, with the stocks up on average 11.8% over the last month. Adobe is up 6.2% during the same time, and is heading into the earnings with with analyst price target of $607.42, compared to share price of $627.15.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.