Adobe (ADBE) earnings Q4 2022

Shantanu Narayen, CEO, Adobe

Marc Neuling | CNBC

Adobe Shares rose 6% in extended trading on Thursday after the design software maker announced fiscal fourth-quarter results and guidance that beat analysts’ expectations.

Here’s how the company did it:

  • Earnings: $3.60 per share, adjusted, versus $3.50 per share as expected by analysts, according to Refinitiv.
  • Revenue: $4.53 billion, versus $4.53 billion as forecast by analysts, according to Refinitiv.

Total revenue increased 10% year-over-year in the quarter, which ended Dec. 2, according to a statement. In the previous quarter, sales increased by 13%. Net income, at $1.18 billion, was down slightly from $1.23 billion in the year-ago quarter.

“We generated record operating cash flow with a focus on profitability,” CEO Shantanu Narayen told analysts on a conference call.

As for guidance, Adobe called for adjusted earnings per share of $3.65 to $3.70 on revenue of $4.60 billion to $4.64 billion in the fiscal first quarter. Analysts polled by Refinitiv had expected $3.64 in adjusted earnings per share and $4.64 billion in revenue. Figures do not include Figma’s impact. The company has maintained his advices for the full year 2023.

Adobe’s Digital Media business, which includes Creative Cloud design software subscriptions, generated $3.30 billion in revenue, not quite hitting the StreetAccount consensus of $3.31 billion . Creative revenue increased 8% in the quarter. The Digital Experience unit, which includes Adobe’s marketing software, reported revenue of $1.15 billion, slightly above the StreetAccount consensus of $1.14 billion.

The digital experience company has successfully secured “numerous transformational deals that span our solutions portfolio,” division president Anil Chakravarthy said on the call.

In the Adobe district said it would buy design software startup Figma for around $20 billion in the public company’s biggest deal in 40 years to date.

“Overall, the regulatory process is proceeding as planned,” said David Wadhwani, president of the Digital Media business. The US Department of Justice and the UK Competition and Markets Authority are reviewing the deal, and Adobe still expects it to close in 2023, Wadhwani said.

An analyst asked how Figma is handling the current economic environment. But as of now, Figma is still a private company and Adobe is unable to discuss Figma’s latest performance, Narayen said.

Stripping out the effect of the after-hours move, Adobe shares have fallen 42% this year, while the S&P 500 index is down 18% over the same period.

This is breaking news. Please check for updates.

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