Small deep value individual investor, with a modest private investment portfolio, split approx. 50%-50% between shares and call options. I have a B.Sc. in aeronautical engineering and over 6 years of experience as an engineering consultant in the aerospace sector. The latter statement is not relevant in any way whatsoever to my investment style, but I thought to add it for self-indulgent purposes. I have a contrarian investment style, highly risky, and often dealing with illiquid options. How illiquid? Well ...

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The news team covers medium and small-cap markets, as well as blue-chip companies, commodities, and broader investment stories [3] - Proactive focuses on sectors such as biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Group 2 - Proactive has a strong emphasis on technology adoption to enhance workflows and content production [4] - The company utilizes automation and software tools, including generative AI, while ensuring all content is edited and authored by humans [5]

Core Insights - Adobe reported a strong financial performance for Q1 2025, with revenue of $5.7 billion, a 10% increase from Q1 2024, and adjusted earnings per share of $5.08, up 13% [2][3] - The company is focusing on integrating AI into its product offerings and has generated over $125 million in bookings from AI-related products [4][5] - Adobe's new strategy involves segmenting its customer base into two groups to provide tailored solutions, with the "Business Professionals and Consumers" group generating $1.53 billion in revenue, a 15% year-over-year increase [10] Financial Performance - Revenue for Q1 2025 was $5.7 billion, compared to $5.2 billion in Q1 2024, reflecting a 10% growth [2] - Adjusted earnings per share increased from $4.48 to $5.08, marking a 13% rise [2] - Operating cash flow saw a significant increase of 111%, rising from $1.2 billion to $2.5 billion [2] AI Integration and Strategy - Adobe is actively incorporating AI across its product portfolio, with 35% of monthly active Photoshop users utilizing generative AI features [4] - The company plans to launch new Firefly web app subscriptions and support additional third-party AI models [4] - Adobe's two-part strategy aims to ensure sustainable long-term growth amidst potential disruptions from AI [3][4] Customer Segmentation - Adobe will report subscription revenue separately for "Business Professionals and Consumers" and "Creative and Marketing Professionals" [5] - The "Creative and Marketing Professionals" group generated $3.92 billion in revenue, a 10% increase year-over-year [10] Market Reaction and Outlook - Following the earnings report, Adobe's shares fell approximately 3% in after-hours trading due to a slightly lower-than-expected outlook [6] - For Q2 2025, Adobe anticipates revenue between $5.77 billion and $5.82 billion, with adjusted earnings per share between $4.95 and $5, which is slightly below analyst expectations [7][8]

Group 1 - The core investment strategy focuses on buying undervalued companies at pivotal moments when their business narrative is shifting towards increased profitability over the next year [1] - The investment portfolio is concentrated, typically consisting of 15 to 20 stocks, with an average holding period of 18 months [1] - The areas of focus include technology and the Great Energy Transition, which encompasses sectors like uranium [1] Group 2 - Michael Wiggins De Oliveira has over 10 years of experience in analyzing companies, particularly in the tech and energy sectors, and has built a following of over 40,000 on Seeking Alpha [2] - He leads the investing group Deep Value Returns, which offers insights through a concentrated portfolio of value stocks, timely updates, weekly webinars, and community support for investors [2] - The Deep Value Returns group is characterized by an active and supportive community that is easily accessible via chat [2]

Group 1 - Adobe's annual recurring revenue (ARR) from AI reached $125 million in Q1, a small portion of its total quarterly revenue of $5.71 billion [1][5] - CEO Shantanu Narayen stated that the company aims to double its AI ARR by the end of the financial year [1][5] - Adobe expects its revenue for Q2 to increase to between $5.77 billion and $5.82 billion [2] Group 2 - Despite the positive outlook on AI, Adobe's stock fell 4.5% in after-hours trading, contributing to a 23% decline in shares for the year [2] - A survey by Jefferies indicated that 65% of end users expect to increase their use of Adobe's creative software in the next three years, with 50% rating Adobe's AI offerings as superior to competitors [4] - Analysts remain optimistic about Adobe's ability to monetize its generative AI offerings and anticipate strong growth in ARR and revenue guidance for the financial year [3]

Financial Data and Key Metrics Changes - Adobe achieved revenue of $5.71 billion in Q1 FY 2025, representing an 11% year-over-year growth [6][40] - GAAP earnings per share for the quarter was $4.14, while non-GAAP earnings per share was $5.08, reflecting a 13% year-over-year growth [6][40] - Cash flows from operations reached a record $2.48 billion, with remaining performance obligations growing 12% year-over-year to $19.69 billion [43][40] Business Line Data and Key Metrics Changes - Digital Media revenue was $4.23 billion, growing 12% year-over-year, with ending ARR of $17.63 billion, also up 12.6% year-over-year [15][40] - Digital Experience revenue was $1.41 billion, representing 10% year-over-year growth, with subscription revenue growing 11% year-over-year to $1.3 billion [30][42] - The Creative and Marketing Professionals Group subscription revenue was $3.92 billion, reflecting 10% year-over-year growth, while the Business Professionals and Consumers Group subscription revenue was $1.53 billion, showing 15% year-over-year growth [42] Market Data and Key Metrics Changes - Strong performance was noted in emerging markets, with significant growth in both Creative Cloud and Document Cloud [15][16] - Acrobat's monthly active users grew by 23% year-over-year, and Express saw a 10x year-over-year engagement increase from Acrobat users [18][56] - The introduction of new offerings like Firefly services and the expansion of AI capabilities contributed to strong demand across various customer segments [27][30] Company Strategy and Development Direction - Adobe's strategy focuses on leveraging AI to enhance creativity and productivity across its product offerings, aiming to serve a broader customer base [8][14] - The company plans to integrate its creative and marketing solutions more closely, emphasizing the importance of personalized digital experiences [11][35] - Upcoming product innovations will be unveiled at Adobe Summit, highlighting the company's commitment to driving growth through AI and enhanced customer engagement [28][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Adobe's ability to navigate current macroeconomic conditions, citing a diverse business model and strong customer relationships [82] - The company reaffirmed its fiscal 2025 targets, indicating confidence in meeting the growing needs of its customer base [7][44] - Management highlighted the significant opportunity presented by generative AI to transform content creation and marketing processes [80] Other Important Information - Adobe's effective tax rate in Q1 was 17% on a GAAP basis and 18.5% on a non-GAAP basis [42] - The company entered into share repurchase agreements totaling $3.25 billion, with $14.4 billion remaining of its $25 billion authorization [43][71] Q&A Session Summary Question: When does AI become more material to revenue? - Management discussed the three parts of the AI journey: innovation, tracking usage, and monetization, expressing confidence in the growth of AI-related revenue streams [47][48] Question: Can you provide more color on trends across Creative and Document Clouds? - Management noted broad-based demand for products, with significant growth in Acrobat and Express, and highlighted the success of AI assistant features [52][54] Question: Is the growth rate for Business Professionals and Consumers stronger than Creative and Marketing Professionals? - Management acknowledged the faster growth in the Business Professionals and Consumers group but emphasized the untapped potential in the Creative and Marketing Professionals segment [65][66] Question: How does the company view the impact of macroeconomic conditions on customer behavior? - Management indicated optimism, stating that Adobe's diverse business model mitigates the impact of tariffs and trade wars [82] Question: Why is the company changing the categorization of revenue? - Management explained that the change reflects the increasing integration of cross-cloud offerings and aims to provide better insight into the company's strategy and performance [86][87]

Core Insights - Adobe reported strong Q1 2025 earnings, with revenue of $5.71 billion, a 10.2% increase year over year, surpassing analyst expectations of $5.66 billion [1][3] - Adjusted EPS for Q1 2025 was $5.08, exceeding the anticipated $4.97 and reflecting a 13.4% increase from $4.48 in Q1 2024 [3][1] - Operating cash flow doubled to $2.48 billion, indicating efficient revenue conversion into cash [6][3] Business Overview - Adobe leads in the digital space with its core segments: Digital Media and Digital Experience, with flagship products like Creative Cloud and Document Cloud [4] - The Digital Experience segment supports businesses in managing customer engagement through Adobe Experience Cloud [4] Growth Drivers - Strong growth in Digital Media and Digital Experience segments, with revenues of $4.23 billion and $1.41 billion respectively [7] - Digital Media ARR reached $17.63 billion, a 12.6% increase, showcasing stable growth [8] - The integration of AI, including innovations like Firefly AI models, has broadened the user base and enhanced product functionality [5][7] Financial Performance - Operating cash flow increased by 111.3% year over year, highlighting Adobe's strong financial position [3][6] - The company repurchased 7 million shares, demonstrating a commitment to returning value to shareholders [6] Strategic Context - Adobe's focus on AI integration and product development is aimed at maintaining market leadership amid competitive pressures [5][7] - Management acknowledged some deceleration in Creative Cloud revenue growth and potential foreign exchange impacts on future earnings [8] Outlook - Adobe reaffirmed its fiscal year 2025 revenue targets of $23.3 billion to $23.55 billion, indicating expected consistent growth [10] - Q2 2025 revenue guidance is set between $5.77 billion and $5.82 billion, slightly below analyst estimates [10] - Adjusted EPS for fiscal 2025 is projected between $20.20 and $20.50, reflecting confidence in sustaining growth [11]

Financial Data and Key Metrics Changes - Adobe achieved revenue of $5.71 billion in Q1 FY 2025, representing an 11% year-over-year growth [6][40] - GAAP earnings per share for the quarter was $4.14, while non-GAAP earnings per share was $5.08, reflecting a 13% year-over-year growth [6][40] - Cash flows from operations reached a record $2.48 billion, with remaining performance obligations growing 12% year-over-year to $19.69 billion [40][43] Business Line Data and Key Metrics Changes - Digital Media revenue was $4.23 billion, growing 12% year-over-year, with ending ARR of $17.63 billion, also up 12.6% year-over-year [15][40] - Digital Experience revenue was $1.41 billion, representing a 10% year-over-year growth, with subscription revenue growing 11% year-over-year to $1.3 billion [30][42] - The Creative and Marketing Professionals Group subscription revenue was $3.92 billion, reflecting a 10% year-over-year growth, while the Business Professionals and Consumers Group subscription revenue was $1.53 billion, showing a 15% year-over-year growth [42] Market Data and Key Metrics Changes - Strong performance was noted in emerging markets, with significant growth in both Creative Cloud and Document Cloud [15][16] - Acrobat's monthly active users grew by 23% year-over-year, and Express saw a 10x year-over-year engagement increase from Acrobat users [18][56] - The introduction of new offerings like Firefly services and the expansion of the partner ecosystem contributed to strong demand in the enterprise segment [27][60] Company Strategy and Development Direction - Adobe's strategy focuses on leveraging AI to enhance creativity and productivity across its product offerings, aiming to serve a broader customer base [8][14] - The company plans to integrate its creative and marketing solutions more closely, particularly through offerings like GenStudio [11][35] - Upcoming product innovations will be showcased at Adobe Summit, emphasizing the importance of generative AI in driving future growth [28][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to navigate current macroeconomic conditions, citing a diverse business model [82] - The ongoing digital transformation across industries presents significant growth opportunities for Adobe's solutions [44][45] - The company reaffirmed its fiscal 2025 targets, indicating confidence in meeting the growing needs of its customer base [7][44] Other Important Information - Adobe's effective tax rate in Q1 was 17% on a GAAP basis and 18.5% on a non-GAAP basis [42] - The company entered into share repurchase agreements totaling $3.25 billion, with $14.4 billion remaining of its $25 billion authorization [43][71] Q&A Session Summary Question: When does AI become more material to revenue? - Management outlined the AI journey in three parts: innovation, tracking usage, and monetization, expressing confidence in the growth of AI-related revenue streams [47][48] Question: Can you provide more color on demand trends across Creative and Document Clouds? - Digital Media ARR grew by 12.6%, with strong performance in Acrobat and Express, driven by user engagement and conversion strategies [53][54] Question: Is the growth rate of Business Professionals and Consumers Group expected to catch up with Creative and Marketing Professionals Group? - Management acknowledged the potential for growth in the Creative and Marketing segment, emphasizing the untapped opportunities in that market [66][67] Question: How sustainable is the pace of share repurchases? - Management indicated a strong financial profile and a commitment to opportunistic share repurchases, reaffirming guidance for the year [71][72] Question: How does the current macroeconomic environment affect customer behavior? - Management noted that while customers are cautious, Adobe's diverse business model mitigates the impact of economic fluctuations [82]

[Adobe Q1 FY2025 Performance Overview](index=1&type=section&id=Adobe%20Q1%20FY2025%20Performance%20Overview) Adobe reported record Q1 FY2025 revenue and strong growth across Digital Media and Digital Experience segments [Financial Highlights](index=1&type=section&id=First%20Quarter%20Fiscal%20Year%202025%20Financial%20Highlights) Adobe reported record Q1 revenue of $5.71 billion, a 10% year-over-year increase, driven by strong performance across its business segments. The company achieved significant growth in earnings per share and generated record operating cash flows of $2.48 billion, while also reaffirming its full-year 2025 financial targets | Financial Metric | Q1 FY2025 | YoY Growth | Constant Currency Growth | | :--- | :--- | :--- | :--- | | Total Revenue | $5.71 billion | 10% | 11% | | GAAP Diluted EPS | $4.14 | - | - | | Non-GAAP Diluted EPS | $5.08 | - | - | | GAAP Operating Income | $2.16 billion | - | - | | Non-GAAP Operating Income | $2.72 billion | - | - | | Operating Cash Flows | $2.48 billion | - | - | - The company repurchased approximately **7.0 million shares** during the first quarter[6](index=6&type=chunk) - **Remaining Performance Obligations (RPO)** reached **$19.69 billion** by the end of the quarter[6](index=6&type=chunk) [Business Segment & Customer Group Highlights](index=1&type=section&id=First%20Quarter%20Fiscal%20Year%202025%20Business%20Segment%20Highlights) Both the Digital Media and Digital Experience segments posted double-digit year-over-year growth. Digital Media revenue grew 11% to $4.23 billion, while Digital Experience revenue increased 10% to $1.41 billion. A new disclosure for customer groups revealed that the Business Professionals and Consumers group subscription revenue grew by 15% YoY | Segment | Q1 FY2025 Revenue | YoY Growth | Constant Currency Growth | | :--- | :--- | :--- | :--- | | Digital Media | $4.23 billion | 11% | 12% | | Digital Experience | $1.41 billion | 10% | 10% | | Customer Group | Q1 FY2025 Subscription Revenue | YoY Growth | | :--- | :--- | :--- | | Business Professionals and Consumers | $1.53 billion | 15% | | Creative and Marketing Professionals | $3.92 billion | 10% | - **Digital Media Annualized Recurring Revenue (ARR)** grew to **$17.63 billion**, representing a **12.6% year-over-year increase**[6](index=6&type=chunk) - New AI-first standalone and add-on innovations exited the quarter with over **$125 million** in **ending ARR**[2](index=2&type=chunk) [Financial Outlook](index=3&type=section&id=Financial%20Targets) Adobe provided Q2 and reaffirmed full-year FY2025 financial targets, projecting continued revenue growth and strong EPS [Q2 Fiscal Year 2025 Targets](index=3&type=section&id=Q2%20Fiscal%20Year%202025%20Targets) Adobe projects total revenue for the second quarter of fiscal year 2025 to be between $5.77 billion and $5.82 billion, with targeted GAAP EPS of $3.80 to $3.85 and non-GAAP EPS of $4.95 to $5.00 | Q2 FY2025 Target | Range | | :--- | :--- | | Total Revenue | $5.77B - $5.82B | | Digital Media Segment Revenue | $4.27B - $4.30B | | Digital Experience Segment Revenue | $1.43B - $1.45B | | GAAP EPS | $3.80 - $3.85 | | Non-GAAP EPS | $4.95 - $5.00 | [Full Fiscal Year 2025 Targets](index=3&type=section&id=Full%20Fiscal%20Year%202025%20Targets) The company reaffirmed its full-year 2025 targets, anticipating total revenue in the range of $23.30 billion to $23.55 billion. Full-year GAAP EPS is expected to be between $15.80 and $16.10, with non-GAAP EPS projected at $20.20 to $20.50 | Full FY2025 Target | Range / Growth | | :--- | :--- | | Total Revenue | $23.30B - $23.55B | | Digital Media Segment Revenue | $17.25B - $17.40B | | Digital Media ending ARR growth | 11.0% **YoY** | | Digital Experience Segment Revenue | $5.80B - $5.90B | | GAAP EPS | $15.80 - $16.10 | | Non-GAAP EPS | $20.20 - $20.50 | [Corporate Updates](index=3&type=section&id=Corporate%20Updates) Adobe introduced new customer group disclosures and announced upcoming investor communications, including an Investor Meeting [New Customer Group Disclosure](index=3&type=section&id=Supplemental%20Disclosure%20for%20Customer%20Groups) To provide additional insight, Adobe has begun disclosing subscription revenue by two new customer groups: "Business Professionals and Consumers" and "Creative and Marketing Professionals". This new segmentation aims to offer greater clarity on revenue sources - The "**Business Professionals and Consumers Group**" includes subscription revenue from Document Cloud, Acrobat subscriptions in Creative Cloud, and Adobe Express subscriptions in Creative Cloud[7](index=7&type=chunk) - The "**Creative and Marketing Professionals Group**" comprises all subscription revenue from Digital Experience and the remaining subscription revenue from Creative Cloud[7](index=7&type=chunk) [Investor Communications](index=3&type=section&id=Investor%20Communications) Adobe announced it will host its Q1 FY2025 earnings conference call and will also hold an Investor Meeting at the Adobe Summit 2025 in Las Vegas to provide updates on its strategy, innovation, and financials - The company will webcast its Q1 FY2025 earnings conference call on March 12, 2025[9](index=9&type=chunk) - An Investor Meeting with financial analysts and investors is scheduled for March 18, 2025, at the Adobe Summit in Las Vegas[10](index=10&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited condensed consolidated financial statements detail Adobe's Q1 FY2025 income, balance sheet, and cash flow performance [Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended February 28, 2025, Adobe's total revenue increased to $5.71 billion from $5.18 billion in the prior-year period. Net income saw a substantial rise to $1.81 billion, compared to $620 million in the same quarter last year, which included a $1 billion acquisition termination fee | (In millions) | Three Months Ended Feb 28, 2025 | Three Months Ended Mar 1, 2024 | | :--- | :--- | :--- | | Total revenue | $5,714 | $5,182 | | Gross profit | $5,092 | $4,592 | | Operating income | $2,163 | $907 | | Net income | $1,811 | $620 | [Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of February 28, 2025, Adobe's total assets were $29.96 billion, a slight decrease from $30.23 billion at the end of fiscal 2024. Total liabilities increased to $16.86 billion, while total stockholders' equity decreased to $13.10 billion, primarily due to treasury stock repurchases | (In millions) | February 28, 2025 | November 29, 2024 | | :--- | :--- | :--- | | Total current assets | $10,855 | $11,232 | | Total assets | $29,955 | $30,230 | | Total current liabilities | $9,163 | $10,521 | | Total liabilities | $16,860 | $16,125 | | Total stockholders' equity | $13,095 | $14,105 | [Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated $2.48 billion in net cash from operating activities during the first quarter, a significant increase from $1.17 billion in the prior-year period. Cash used for financing activities was $2.84 billion, largely due to $3.25 billion in common stock repurchases | (In millions) | Three Months Ended Feb 28, 2025 | Three Months Ended Mar 1, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,482 | $1,174 | | Net cash provided by (used for) investing activities | $(484) | $66 | | Net cash used for financing activities | $(2,841) | $(2,128) | | Net change in cash and cash equivalents | $(855) | $(887) | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section reconciles Q1 FY2025 results and future financial targets from GAAP to non-GAAP measures [Q1 FY2025 Results Reconciliation](index=9&type=section&id=Q1%20FY2025%20Results%20Reconciliation) Adobe provides a reconciliation of its Q1 GAAP results to non-GAAP figures, adjusting for items such as stock-based compensation and amortization of intangibles. Non-GAAP operating income was $2.72 billion compared to GAAP operating income of $2.16 billion, and non-GAAP net income was $2.22 billion versus GAAP net income of $1.81 billion | (In millions, except per share data) | Q1 FY2025 GAAP | Q1 FY2025 Non-GAAP | | :--- | :--- | :--- | | Operating income | $2,163 | $2,715 | | Net income | $1,811 | $2,224 | | Diluted net income per share | $4.14 | $5.08 | [Financial Targets Reconciliation](index=10&type=section&id=Financial%20Targets%20Reconciliation) The report includes reconciliations for its Q2 and full-year 2025 financial targets from GAAP to non-GAAP. For the full year, the non-GAAP operating margin is targeted at approximately 46.0%, compared to a GAAP operating margin of 36.0%, with adjustments primarily for stock-based compensation and amortization | Q2 FY2025 Targets | GAAP | Non-GAAP | | :--- | :--- | :--- | | Diluted net income per share | $3.80 - $3.85 | $4.95 - $5.00 | | Operating margin | ~35.0% | ~45.0% | | Full FY2025 Targets | GAAP | Non-GAAP | | :--- | :--- | :--- | | Diluted net income per share | $15.80 - $16.10 | $20.20 - $20.50 | | Operating margin | ~36.0% | ~46.0% | [Use of Non-GAAP Financial Information](index=11&type=section&id=Use%20of%20Non-GAAP%20Financial%20Information) Adobe explains that it uses non-GAAP financial measures for internal planning, forecasting, and evaluating its ongoing operations. The company believes these measures provide investors with greater transparency and a better tool to evaluate operating results in the same manner as management - Management uses non-GAAP financial information to evaluate ongoing operations and for internal planning and forecasting[32](index=32&type=chunk) - Non-GAAP measures are presented to provide investors with an additional tool to evaluate Adobe's operating results, allowing for greater transparency with respect to key metrics used by management[32](index=32&type=chunk)[33](index=33&type=chunk)

Adobe Inc. ADBE will release its first-quarter financial results, after the closing bell, on Wednesday, March 12.Analysts expect the San Jose, California-based company to report quarterly earnings at $4.97 per share, up from $4.48 per share in the year-ago period. Adobe projects quarterly revenue of $5.66 billion, compared to $5.18 billion a year earlier, according to data from Benzinga Pro.On Dec. 11, 2024, Adobe reported fourth-quarter revenue of $5.61 billion, beating the consensus estimate of $5.54 bill ...