Adobe CEO Shantanu Narayen speaks during an interview with CNBC on the floor at the New York Stock Exchange in New York City, Feb. 20, 2024.Shares of Adobe fell more than 9% on Friday, a day after the company released third-quarter results that offered worse-than-expected guidance for the fourth quarter.Adobe reported $5.41 billion in revenue for the quarter, up 11% year-over-year and above the $5.37 billion expected by analysts according to LSEG. The company's net income for the period was $1.68 billion, o ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

U.S. stock futures were mixed this morning, with the Dow futures gaining around 0.1% on Friday.Shares of Adobe Inc.  ADBE shares declined 10.3% to $75.02 in pre-market trading after the company reported quarterly results.Adobe reported better-than-expected earnings for its third quarter on Thursday. The company said it sees fourth-quarter revenue in a range of $5.5 billion to $5.55 billion and earnings of between $4.63 and $4.68 per share.Adobe shares dipped 8.5% to $537.00 in pre-market trading.Here are so ...

JHVEPhoto Adobe (NASDAQ:ADBE) stock fell by 9.1% in after-hours trading after reporting its Fiscal Q3-2024 results. However, the digital media and design software stock likely didn't deserve to fall by that much. The main reason for the fall was the lower-than-expected guidance, but it was hardly a miss. Now, you have a growing industry-leading company that's back to a reasonable valuation, and that suggests long-term upside from here. As a result, I rate the stock as a Buy. If ADBE stock falls more in the ...

bennymarty Investment Thesis Adobe (NASDAQ:ADBE) delivered a mediocre outlook with its fiscal Q3 2024 results, which led to a 9% sell-off. Even though its outlook wasn't too far off analysts' own expectations, this has been a battleground stock for a long time. Bulls call Adobe a value stock, while bears question whether this business is flying high on narrative and low on growth rates. For my part, I'm very much on the fence with Adobe, and believe that there are amply better opportunities elsewhere. Rapid ...

Core View - Adobe shares dropped sharply in extended trading due to a disappointing current-quarter outlook, despite better-than-expected fiscal Q3 results [1][3] - The stock is at risk of breaking below the lower trendline of an ascending triangle pattern, potentially starting a new downtrend [1][3] Technical Analysis - Adobe shares have been trading within an ascending triangle since late February, with a recent golden cross formation indicating a potential uptrend [3] - The stock fell 9 1% to $533 in after-hours trading, signaling a possible breakdown below the triangle's lower trendline [3] Key Support Levels - $500: Psychological support level and horizontal line connecting peaks and troughs from June 2023 to August 2024 [4] - $439: Potential buying opportunity near pre-gap consolidation period from May to June 2023, aligning with the May 2024 swing low [4] - $386: Support area near peaks from February to April 2023 [4] - $333: Long-term correction target, aligning with the May 2023 swing low and measured move price target [5] Key Resistance Level - $550: Potential selling pressure during countertrend moves, near the ascending channel's lower trendline [6] Market Context - Adobe shares have gained 28% over the past three months but remain underwater for the year due to cautious enterprise spending amid economic uncertainty and high interest rates [2]

Financial Data and Key Metrics Changes - Adobe achieved record revenue of $5.41 billion in Q3 2024, representing 11% year-over-year growth [6][27] - GAAP earnings per share for the quarter was $3.76, and non-GAAP earnings per share was $4.65, reflecting 23% and 14% year-over-year growth, respectively [6][28] - Cash flows from operations were $2.02 billion, and the remaining performance obligation (RPO) was $18.14 billion, growing 15% year-over-year [28][32] Business Line Data and Key Metrics Changes - Digital Media revenue reached $4 billion, growing 12% year-over-year, with net new Digital Media ARR of $504 million [11][28] - Document Cloud revenue was $807 million, representing 18% year-over-year growth, with $163 million of net new Document Cloud ARR [28][29] - Creative revenue was $3.19 billion, growing 11% year-over-year, with net new Creative ARR of $341 million [18][29] Market Data and Key Metrics Changes - Experience Cloud revenue was $1.35 billion, with subscription revenue of $1.23 billion, reflecting 12% year-over-year growth [21][28] - Strong adoption of AI-powered features across various products, with over 12 billion Firefly-powered generations across Adobe tools [9][19] Company Strategy and Development Direction - Adobe's strategy focuses on integrating AI across its product portfolio to enhance creativity and productivity, with new offerings like Adobe GenStudio and Firefly Services [8][16] - The company aims to expand its reach through Adobe Express, targeting various customer segments including individuals, education, and enterprises [17][20] - Continued investment in technology platforms and global campaigns to attract top-tier talent while maintaining strong cash flows and profitability [27][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance of Digital Media and Document Cloud, attributing it to AI innovations and customer engagement [38][39] - The company anticipates a seasonally strong Q4, with expectations for continued growth driven by innovation and customer-centric approaches [33][51] Other Important Information - Adobe's Content Authenticity Initiative has gained traction, with over 3,300 members committed to enhancing trust and transparency [34] - The company is collaborating with educational institutions to boost digital and media literacy skills, preparing the workforce for an AI-driven future [35] Q&A Session All Questions and Answers Question: What drove the unseasonable strength in Digital Media ARR and why is the Q4 guide lower? - Management noted strong performance in Digital Media and Document Cloud, with AI Assistant contributing significantly. They expect a strong Q4 despite the lower sequential guidance, which is the highest ever for Q4 [38][39] Question: Can you compare AI monetization opportunities between image and video models? - Management highlighted the integration of AI into tools and the potential for monetization through generative credits, emphasizing the importance of commercial safety and user engagement [41][42] Question: How should we think about consumption contributing to ARR growth in FY'25? - Management expressed confidence in the unique differentiation of their offerings and the potential for consumption models to drive growth, despite competitive pressures [46][47] Question: Can you provide insights into Document Cloud's pricing dynamics and subscription transition? - Management indicated that Document Cloud is already a strong subscription business, with ongoing enhancements through AI Assistant and increased sharing capabilities driving engagement and adoption [53][55]

Market Overview - Stock markets finished higher with the Dow rising by 235 points (+0.58%), S&P 500 up by 41 points (+0.75%), Nasdaq increasing by 174 points (+1.00%), and Russell 2000 gaining 25 points (+1.22%) [1] Federal Reserve Insights - The Federal Reserve is expected to lower interest rates, likely by 25 basis points, as inflation reports did not indicate any major surprises [1][3] - Despite high interest rates (5.25-5.50%), there are concerns about potential erosion in the job market, although weekly jobless claims remained stable at 230K [2][3] Employment Data - Non-farm payrolls and ADP private-sector payrolls have shown a decline in job creation, with non-farm jobs averaging +116K per month over the last three months, down from +211K previously, and ADP averaging +122K, down from +188K [2] Earnings Reports - Adobe Systems (ADBE) reported fiscal Q3 earnings of $4.65 per share, exceeding the Zacks consensus of $4.53, with revenues of $5.41 billion, slightly above expectations [4] - Adobe's Digital Media group saw an 11% year-over-year growth to $4 billion, but the revenue guidance was below current expectations, leading to a 9.3% drop in shares [4] - RH (formerly Restoration Hardware) reported Q2 earnings of $1.45 per share, missing the consensus of $1.53, but revenues of $830 million exceeded expectations [5] - RH experienced a strong demand increase, with growth of 10% in July and 12% in August, and is expected to see demand between 12-14% in Q3 [5]

Financial Performance - Adobe reported $5.41 billion in revenue for the quarter ended August 2024, a 10.6% year-over-year increase [1] - EPS for the quarter was $4.65, compared to $4.09 a year ago [1] - Revenue surpassed the Zacks Consensus Estimate of $5.37 billion by 0.79% [1] - EPS exceeded the consensus estimate of $4.53 by 2.65% [1] Business Unit Metrics - Digital Media - Creative ARR (Annualized Recurring) was $13.45 billion, slightly below the five-analyst average estimate of $13.46 billion [2] - Digital Media - Total Digital Media ARR (Annual) was $16.76 billion, compared to the $16.71 billion average estimate [2] - Digital Media - Document Services ARR (Annual) was $3.31 billion, exceeding the four-analyst average estimate of $3.25 billion [2] Revenue Breakdown - Digital Media revenue was $4 billion, a 11.2% year-over-year increase, slightly above the $3.97 billion average estimate [2] - Publishing and Advertising revenue was $59 million, a 11.9% year-over-year decrease, below the $60.35 million average estimate [2] - Digital Experience revenue was $1.35 billion, a 10.2% year-over-year increase, slightly above the $1.34 billion average estimate [2] - Digital Media - Creative Cloud revenue was $3.19 billion, a 9.6% year-over-year increase, slightly above the $3.18 billion estimate [2] - Digital Media - Document Cloud revenue was $807 million, a 17.8% year-over-year increase, exceeding the $790.70 million estimate [2] - Services and other revenue was $146 million, a 10.4% year-over-year decrease, below the $163.69 million estimate [2] - Products revenue was $82 million, a 14.6% year-over-year decrease, below the $111.98 million estimate [2] - Digital Experience Subscription Revenue was $1.23 billion, a 12.3% year-over-year increase, slightly above the $1.21 billion estimate [2] - Net Revenue - Subscription was $5.18 billion, a 11.9% year-over-year increase, exceeding the $5.09 billion estimate [2] Stock Performance - Adobe shares returned +7.5% over the past month, outperforming the Zacks S&P 500 composite's +4% change [3] - The stock currently has a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Insights - Adobe reported fiscal third-quarter earnings and revenue that exceeded expectations, but its fourth-quarter outlook fell short of analysts' estimates, leading to a decline in share price [1][2]. Group 1: Financial Performance - Adobe's third-quarter revenue reached $5.41 billion, representing an 11% year-over-year increase [2]. - The company reported diluted earnings per share (EPS) of $3.76, up from $3.05 a year earlier [2]. - The Digital Media segment achieved record net-new annualized recurring revenue (ARR) of $504 million, an 8% year-over-year rise, surpassing analysts' projections [2]. Group 2: Future Outlook - For the fourth quarter, Adobe anticipates revenue between $5.50 billion and $5.55 billion, which is below analysts' expectations [1]. - The projected diluted EPS for the fourth quarter is between $3.58 and $3.63, with analysts expecting the higher end of that range [1]. Group 3: Market Reaction - Following the earnings report, Adobe shares fell more than 9% in extended trading [2].