Adobe Systems Inc. (NASDAQ: ADBE) released fiscal second-quarter earnings results after the markets closed on Thursday. The company had $0.66 in earnings per share (EPS) on $1.38 billion in revenue compared to Thomson Reuters consensus estimates that called for $0.61 in EPS on $1.34 billion in revenue. The same period from last year had $0.44 in EPS on $1.11 billion in revenue.
The Digital Media segment revenue grew by 33% year-over-year to a record $932 million, with Creative revenue growing 44% year-over-year to a record $733 million.
At the same time, strong Creative Cloud adoption drove Digital Media Annualized Recurring Revenue (ARR) to $3.13 billion exiting the quarter, an increase of $246 million.
The company repurchased roughly 1.5 million shares during the quarter, returning $133 million of cash to stockholders.
Cash flow from operations was $498 million, and deferred revenue grew to $1.61 billion. On the books, cash, equivalents, and short-term investments totaled $4.10 billion compared to $3.99 billion in the same period from last year.
Shantanu Narayen, President and CEO of Adobe, commented:
Every day, more brands, government agencies and educational institutions globally are choosing to base their digital strategies on Adobe’s content and data platforms. Our exceptional performance in Q1 is an indicator of the strong momentum we are seeing across our cloud businesses as we drive the experience economy.
Mark Garrett, Adobe executive vice president and CFO, added:
We are pleased to report another record quarter with 25 percent year-over-year revenue growth. Strong Cloud adoption drove record Creative and Marketing Cloud revenue in Q1, and better-than-expected Digital Media ARR. Based on our strong Q1 results and business momentum, we are increasing our annual revenue and earnings targets for the year.
Shares of Adobe closed Thursday up 2% at $89.96, with a consensus analyst price target of $102.70 and a 52-week trading range of $71.27 to $96.42. Following the release of the earnings report, the stock was up over 5% at $95.00 in the after-hours trading session.
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