Autonomous Design (ADBE Earnings)
Adobe Inc. (ADBE) is scheduled to announce Q2 (May) earnings today post-market, with a subsequent call at 5pm ET.
Expectations are set for a 13% YOY increase in EPS to $3.79 and a 9% YOY increase in revenue to $4.77 billion, per FactSet consensus.
The company typically provides guidance for both the subsequent quarter and full year. Q2 guidance is currently set at EPS of $3.75-3.80 and revenue of $4.75-4.78 billion.
In terms of segment performance, Adobe's Q2 guidance for Digital Media, its largest segment, is set at $3.45-3.47 billion in revenue. The Digital Experience segment, which empowers businesses to manage customer experiences via analytics, is expected to generate $1.21-1.23 billion.
Notably, Adobe's acquisition of Figma, popular among web and mobile developers, is under scrutiny for potential anti-competitive issues by the US DOJ and the UK, despite Adobe's confidence in the deal's closure by end-2023. Updates on this are expected in the call.
Last quarter saw Adobe's largest EPS upside in seven quarters, with an in-line revenue and Q2 guidance, and an upward revision of its FY23 EPS guidance. The company’s broad, diversified offering seems to be advantageous amid potential headwinds for single product companies. Updates on Adobe's macroeconomic perspective are anticipated in the upcoming call.
TECHS:
Historically, Adobe has met or surpassed EPS expectations for the past 17 quarters, with increasing beats in recent periods.
Finally, the stock has seen a sharp increase over the past month, rising by over 40%. Adobe, alongside other mega-cap tech companies, has shown strong performance recently. DocuSign's (DOCU) strong quarter earlier this month has also provided a boost to Adobe, given their shared focus on digital document supply. Adobe's experience of smaller deal sizes and lower expansion rates, as reported by DOCU, will be a key area to watch.
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