Adobe Stock Is Rising. Earnings Beat Expectations.

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The Adobe logo is displayed on the side of the Adobe Systems headquarters


Justin Sullivan/Getty Images


Adobe

stock is trading higher late Thursday after the creative-software company posted better-than-expected results for its fiscal second quarter ended June 4.

For the quarter, Adobe (ticker: ADBE) reported revenue of $3.84 billion, up 23% from a year ago, and ahead of the company’s forecast of $3.72 billion. Non-GAAP profits were $3.03 a share, ahead of the company’s projection of $2.81 a share. Under generally accepted accounting principles, Adobe earned $2.32 a share.

Adobe stock in late trading has rallied 2.5%, to $565.

Adobe’s results were above expectations in every segment. Digital Media revenue was $2.79 billion, up 25%, and four points better than the company’s guidance. That includes creative revenue of $2.32 billion, up 24%, and document cloud revenue of $496 million, up 30%.

Digital Experience segment revenue was $938 million, up 21%, and three points better than the company’s target for 18% growth.


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The company also said it bought back about 2.1 million shares in the quarter.

For the fiscal third quarter, Adobe sees revenue of $3.88 billion, slightly higher than the Street consensus forecast of $3.83 billion, with non-GAAP profits of $3 a share, above the Street consensus estimate for $2.89 a share. The company sees growth in the quarter of 21% in the digital experience segment, and 25% in digital experience.

“Adobe had an outstanding second quarter as Creative Cloud, Document Cloud and Experience Cloud continue to transform work, learn and play in a digital-first world,” Adobe CEO
Shantanu Narayen
said in a statement.

Chief Financial Officer
John Murphy
added in a statement that “the large market opportunity and momentum we are seeing across our creative, document and customer experience management businesses position us well to deliver another record year.”

Write to Eric J. Savitz at eric.savitz@barrons.com