Tuesday, July 16, 2024
Home Stock Analysis Earnings Preview: Adobe likely to report profit and revenue growth in Q2 2025

Earnings Preview: Adobe likely to report profit and revenue growth in Q2 2025

by xyonent
0 comment
Adobe Q1 2024 Earnings Infographic 1.jpg

Adobe Inc. (NASDAQ: ADBE) has always been on the path of innovation to maintain its dominance in the creative software market, and the tech company is adopting the same strategy in generative artificial intelligence. The tech company is effectively integrating AI into its platform. Creative Cloud, Document Cloud, and Experience Cloud — Leverage large-scale language models and invest in developing our own models.

stock

For Adobe investors, there’s not much to celebrate in 2024, as the stock has entered a downward spiral after a strong start to the year. Down roughly 25% over the past six months, ADBE is now trading well below its 2021 peak. Analysts say the stock is set to recover and surpass the $600 mark once again, which is good news for those wanting to hold onto the stock given the relatively low valuation.

The design software maker is expected to report impressive numbers when it reports its second-quarter results at the close of regular trading on June 13. Experts’ consensus adjusted earnings estimate is $4.39 per share, below the $3.91 per share forecast for the three months ending May 2023. Meanwhile, Adobe executives expect second-quarter profit to be in the range of $4.35 to $4.40 per share. Second-quarter revenue is expected to increase 10% year over year to $5.29 billion, which is at the high end of management’s revenue guidance of $5.25 billion to $5.3 billion.

First Quarter Results

Interestingly, quarterly earnings have consistently beaten expectations over the past six years. Through the first three months of fiscal 2024, the San Jose-based technology company’s earnings and revenue beat market expectations. First-quarter revenue increased 11% year over year to $5.18 billion. As a result, adjusted earnings increased 18% to $4.48 per share. On a reported basis, net income increased 50% year over year to $620 million, or $1.36 per share.

Adobe CEO Shantanu Narayen said during the company’s first quarter earnings call: “Our performance reflects the critical role Adobe products play in driving the global digital economy. We are executing on our strategy to unleash creativity for everyone, accelerate document productivity and power digital businesses. Adobe Creative Cloud, Document Cloud and Experience Cloud are more important than ever to the success of creators, communicators, students, entrepreneurs and businesses of all sizes, and AI serves as a catalyst for all. We are the leader in delivering generative AI across all clouds.”

AI Power

Adobe is now focused on expanding its AI strategy into more areas of its business, as its AI-powered products can significantly improve user experience and drive strong customer growth in the long run. The company has delivered excellent revenue growth over the past decade, leading to steadily improving profitability and margins. However, it faces competition from new players such as: Canvaoffers similar services at more affordable prices, and emerging AI-focused design startups are also getting in on the action.

Adobe shares were up about 1.7% on Wednesday afternoon. The stock has remained below its 12-month average for about three months.

You may also like

Leave a Comment

About Us

Investxyon

At InvestXyon, we empower individuals with knowledge for informed investing, financial navigation, and secure futures. Our trusted platform covers investments, stocks, personal finance, retirement, and more.

Feature Posts

Newsletter

Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!