Adobe lifts profit forecast for fiscal 2023 and beats estimates on quarterly results

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by Samuel Pordengerg Mar 16, 2023 News
Adobe lifts profit forecast for fiscal 2023 and beats estimates on quarterly results
Shantanu Narayen, CEO of Adobe, attends a media event in Mumbai on May 3, 2017.Shantanu Narayen, CEO of Adobe, attends a media event in Mumbai on May 3, 2017.

Adobe shares rose 5% in after-hours trading on Wednesday after the software maker lifted its full-year forecast.

The company did what it was supposed to.

  • Earnings: $3.80 per share, adjusted, vs. $3.68 per share as expected by analysts, according to Refinitiv.
  • Revenue: $4.66 billion, vs. $4.62 billion as expected by analysts, according to Refinitiv.

The quarter that ended on March 3 had 9% revenue growth. The net income fell slightly.

The company's Digital Media segment generated $3.4 billion in revenue, up 9% from a year ago and above the $3.36 billion consensus among analysts.

The Digital Experience segment, which features Marketo marketing software, contributed over one billion dollars in revenue.

Adobe predicts earnings per share of $3.75 to $3.80 on an adjusted basis and $4.75 billion to $4.78 billion in revenue. The analysts were expecting adjusted earnings of $3.76 per share and $4.76 billion in revenue

Adobe now sees adjusted earnings per share of between $15.30 and $15.60, up from its previous forecast of between $13.50 and $13. Adobe said in December that it expected adjusted earnings per share to be between 15 and 15.45 for the year. The analysts were looking for adjusted earnings per share to be 15.31

Adobe is benefiting from one recent acquisition. Dan Durn, Adobe's finance chief, said on a conference call that the company is getting existing video clients to pay for Frame.io.

In the quarter, Adobe beat out single-product competitors in categories such as analytics and content management for some deals.

During the quarter, Microsoft said it was putting Adobe's Acrobat PDF engine into Edge, the default browser in Windows 10 and 11, and Adobe said it was engaging with regulators in the U.S., U.K. and EU on its pending $20 billion acquisition of design software startup Adobe is prepared for the next steps, whether that is an approval or a challenge, according to the company's CEO.

Adobe shares have declined 1% so far this year, while the S&P 500 has risen 1%.

Adobe is a company we have admired for a long time.

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