Technology
Why Record Revenues Aren't Enough for Adobe Investors
Published:
Last Updated:
Adobe Systems Inc. (NASDAQ: ADBE) released its most recent quarterly results after the markets closed on Tuesday and investors were not happy. Although the company reported a record revenue and beat analyst estimates, this still was not enough for investors.
Keep in mind that shares have risen roughly 50% in 2017 alone, so there is a high bar set if shares want to keep growing, especially for a company this size.
The software giant said that it had $1.10 in earnings per share (EPS) and $1.84 billion in revenue, which compares to consensus estimates from Thomson Reuters of $1.01 in EPS and revenue of $1.82 billion. In the third quarter of last year, it EPS of had $0.75 and $1.46 billion in revenue.
Digital Media segment revenue totaled $1.27 billion, with Creative revenue growing to $1.06 billion. Separately, the Adobe Experience Cloud segment achieved revenue of $508 million, which represents 26% in year-over-year growth.
Also annualized recurring revenue for Digital Media grew to $4.87 billion at the end of the quarter, a quarter-over-quarter increase of $308 million. Deferred revenue totaled $2.20 billion.
On the books, Adobe’s cash, cash equivalents and short-term investments totaled $5.38 billion at the end of the quarter, up from with $4.76 billion at the end of the previous fiscal year.
Shantanu Narayen, president and CEO, Adobe, commented:
Adobe delivered another record quarter with stellar year-over-year revenue growth of 26 percent. The imperative to deliver intelligent, intuitive and effective customer experiences is key to the C-suite agenda of digital transformation, and Adobe’s cloud offerings are critical to that business mandate.
24/7 Wall St.Mark Garrett, executive vice president and CFO, added:
Our results in Q3 once again reflect the leverage of our financial model, with record revenue driven by our cloud-based subscription offerings, strong earnings and cash flow from operations.
Shares of Adobe were last seen down 4% at $150.34, with a consensus analyst price target of $161.80 and a 52-week range of $98.00 to $157.89.
Sponsored: Attention Savvy Investors: Speak to 3 Financial Experts – FREE
Ever wanted an extra set of eyes on an investment you’re considering? Now you can speak with up to 3 financial experts in your area for FREE. By simply
clicking here you can begin to match with financial professionals who can help guide you through the financial decisions you’re making. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
