Adobe Q4 Earnings Beat Market, Sees Growth Ahead; But Shares Hit

(RTTNews) - Software major Adobe Inc. issued positive outlook for first quarter and fiscal 2025 earnings and revenues, after reporting higher fourth-quarter results above market. Meanwhile, the shares declined around 9 percent in the after-hours trading on Wednesday, and is currently down around 11 percent in the pre-market activity on the Nasdaq.

Media reported that the stock movement reflected the revenue outlook being below certain market estimates.

Shantanu Narayen, chair and CEO, said, "Adobe delivered record FY24 revenue, demonstrating strong demand and the mission-critical role Creative Cloud, Document Cloud and Experience Cloud play in fueling the AI economy. Our highly differentiated technology platforms, rapid pace of innovation, diversified go-to-market and the integration of our clouds position us for a great year ahead."

Dan Durn, executive vice president and CFO, Adobe, added that the company's strategy, AI innovation and massive cross-cloud opportunity position us well for 2025 and beyond.

For the first quarter, the company projects earnings per share of $3.85 to $3.90, and adjusted earnings per share of $4.95 to $5.00. Total revenues would be $5.63 billion to $5.68 billion.

Analysts on average expect the company to report earnings of $4.96 per share on revenues of $5.66 billion, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

In the prior year first quarter, earnings were $1.36 per share, adjusted earnings were $4.48 per share and revenues were $5.18 billion.

Further, for fiscal 2025, Adobe projects earnings per share of $15.80 to $16.10, and adjusted earnings per share of $20.20 to $20.50.

Total revenue for the year would be $23.30 billion to $23.55 billion.

The Street is looking for earnings of $20.36 per share on revenues of $23.48 billion for the year.

The company expects an approximate $200 million headwind to fiscal year 2025 revenue, due to foreign exchange effect and a smaller impact of the continued move to subscriptions from perpetual offerings.

In fiscal 2024, the company's earnings per share were $12.36, adjusted earnings per share were $18.42 and revenues were $21.51 billion.

In its fourth quarter, net earnings came in at $1.68 billion, or $3.79 per share, compared with $1.48 billion, or $3.23 per share, in last year's fourth quarter.

Adjusted earnings were $2.13 billion or $4.81 per share for the period. Analysts had expected the company to earn $4.67 per share.

The company's revenue for the quarter rose 11.1 percent to $5.606 billion from $5.048 billion last year.

On the Nasdaq, Adobe shares closed Wednesday's regular trading at $549.93, up 0.53 percent. In the extended trading, the shares lost 9.2 percent to $499.48.

In pre-market activity, the shares are currently at $491, down 10.7 percent.

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