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Adobe (ADBE) earnings Q4 2022

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Shantanu Narayen, CEO, Adobe

Mark Neuling | CNBC

Adobe shares rose 6% in prolonged trading on Thursday after the design software maker announced fiscal fourth-quarter earnings and guidance that exceeded analysts’ expectations.

Here’s how the corporate did:

  • Earnings: $3.60 per share, adjusted, vs. $3.50 per share as expected by analysts, in accordance with Refinitiv.
  • Revenue: $4.53 billion, vs. $4.53 billion as expected by analysts, in accordance with Refinitiv.

Total revenue grew 10% yr over yr within the quarter, which ended on Dec. 2, in accordance with a statement. Within the previous quarter revenue rose by 13%. Net income, at $1.18 billion, was down barely from $1.23 billion within the year-ago quarter.

“We delivered record operating money flows with a concentrate on profitability,” CEO Shantanu Narayen told analysts on a conference call. He said the corporate is remaining cautious and won’t be immune from a worsening economy.

With respect to guidance, Adobe called for $3.65 to $3.70 in adjusted earnings per share on $4.60 billion to $4.64 billion in revenue within the fiscal first quarter. Analysts polled by Refinitiv had expected $3.64 in adjusted earnings per share and $4.64 billion in revenue. The numbers don’t include impact from Figma. The corporate maintained its guidance for the total 2023 fiscal yr.

Adobe’s Digital Media business, which incorporates Creative Cloud design software subscriptions, contributed $3.30 billion in revenue, not quite meeting the StreetAccount consensus of $3.31 billion. Creative revenue grew 8% within the quarter. The Digital Experience unit, which incorporates Adobe’s marketing software, delivered $1.15 billion in revenue, just over the $1.14 billion StreetAccount consensus.

The digital experience business succeeded in closing “quite a few transformational deals that span our portfolio of solutions,” Anil Chakravarthy, president of the division, said on the decision.

Within the quarter Adobe said it will buy design software startup Figma for about $20 billion within the 40-year-old public company’s largest transaction thus far.

“Overall, the regulatory process is proceeding as expected,” said David Wadhwani, president of the Digital Media business. The U.S. Justice Department and the UK’s Competition and Markets Authority is reviewing the deal, and Adobe still expects it to shut in 2023, Wadhwani said.

One analyst asked how Figma is handling the present economic environment. But for now FIgma continues to be a personal company, and Adobe is not in a position to discuss Figma’s latest performance, Narayen said.

When removing the effect of the after-hours move, Adobe shares have slid 42% this yr, while the S&P 500 index has declined 18% over the identical period.

WATCH: Adobe forecasts a 5.3% rise in Cyber Monday sales year-over-year

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