Adobe shares soar after last quarter’s results

Adobe shares rose more than 5%.

A fantastic news for Adobe, its shares rose 5% in extended trading after the large design software maker reported its fiscal fourth-quarter earnings and guidance, beating analysts’ expectations.

Adobe achieved nearly three-quarters of its revenue from digital media products last quarter. The software maker reported that its digital media revenues rose 10% to $3.3 billion, in line with estimates.

The company reported quarterly revenue of $4.53 billion, up 10% year over year and hitting a new high. Completing a fiscal year in which Adobe posted $17.61 billion in sales, up 15 % year-over-year in fiscal 2021.

Adobe earned an adjusted $3.60 per share on sales of $4.53 billion in the quarter that ended Dec. 2.

This was great news for analysts surveyed by FactSet as they expected Adobe earnings of $3.50 per share on sales of $4530 million, as reported by Investors.com.

The software maker still has a long way to go, as remaining performance obligations amounted to $15.19 billion for almost a year of future sales.

What do analysts think about the company’s current situation?

Gregg Moskowitz, the analyst at Mizuho, said Adobe’s strong performance shows that the company “remains well positioned to benefit from digital transformation,” and what many industries are still testing today.”

Moskowitz also noted that “recent quarters have been quite uneven due to a challenging macroeconomic environment.”

He said, “Adobe’s proposed $20 billion stock and cash acquisition of digital collaboration platform company Figma and its ongoing regulatory review process will likely be a drag on the stock for a while.”

What can we expect from Adobe in 2023?

Adobe CEO Shantanu Narayen also let it be known on a conference call Thursday that as the Figma deal goes through the regulatory process, “they will be able to concentrate on thinking strategically.”

He also added that Adobe has been getting “a lot of great feedback from its customers, but emphasized that these are two separate independent companies.”

Adobe offered a preliminary for fiscal 2023. and even though there are difficulties due to currency exchange rates, they forecast adjusted earnings of $15.30 per share and revenues of $19.2 billion. 

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