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Will Digital Media Strength Aid Adobe's (ADBE) Q4 Earnings?
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Adobe’s (ADBE - Free Report) fourth-quarter fiscal 2023 results, scheduled to be released on Dec 13, are likely to reflect its Digital Media segment’s strength.
Digital Media has been the key driver behind the company’s growth on the back of its Creative family of products and Document Services products.
With its robust Digital Media solutions, the company helps content creators, app and game developers and creative professionals such as graphic designers, photographers and video editors to generate, publish and promote their content anywhere.
We believe that the company’s persistent efforts toward strengthening its content management capabilities are expected to continue driving growth in the Digital Media segment.
The segment under discussion generated revenues of $3.59 billion in third-quarter fiscal 2023, which improved 11% on a year-over-year basis.
For fourth-quarter fiscal 2023, Adobe expects Digital Media revenues between $3.67 billion and $3.70 billion. The Zacks Consensus Estimate for Digital Media revenues for the quarter under review is pegged at $3.68 billion, suggesting an 11.6% rise from the year-ago quarter’s reported figure.
Click here to know how the company’s overall fiscal fourth-quarter results are likely to be.
Solid momentum across Adobe Creative Cloud and Document Cloud is expected to have driven top-line growth for the Digital Media segment in the to-be-reported quarter.
Strong momentum in Adobe Firefly might have continued strengthening Adobe's prospects in the booming generative AI space. The integration of Firefly into Photoshop and Illustrator might have contributed well to top-line growth within the Digital Media segment.
For fourth-quarter fiscal 2023, Adobe expects Digital Media revenues between $3.67 billion and $3.70 billion. The Zacks Consensus Estimate for the same is pegged at $3.68 billion, indicating growth of 11.6% year over year.
Frame.io’s integration into creative software like Adobe Photoshop, Adobe Premier Pro and After Effects is likely to have benefited the segment further.
Apart from this, the monthly growing active user base of Creative Cloud Express and the new AI-powered innovations in Premiere Pro are expected to have accelerated growth in Creative revenues in the quarter under review. Strength in Adobe Stock and product-led growth motions is also likely to have benefited the Stock business during the reported quarter.
The rising proliferation of Metaverse is also likely to have aided the performance of Creative Cloud.
The Zacks Consensus Estimate for fiscal fourth-quarter Creative Cloud revenues is pegged at $2.98 billion, suggesting an improvement of 11.3% from the year-ago quarter’s reported figure.
Coming to Document Cloud, strength across web, mobile and embedded third-party app ecosystems might have contributed well to the growth in the monthly active user base. Solid momentum across the Acrobat ecosystem is likely to have remained a positive. Strong momentum in Acrobat PDF on mobile is expected to have been beneficial.
Growing adoption of Acrobat and Acrobat Sign might have been a plus. Enhanced PDF workflows across Acrobat and Express are expected to have continued to drive customer momentum further.
All these factors are anticipated to have contributed well to Document Cloud revenues.
The Zacks Consensus Estimate for fiscal fourth-quarter Document Cloud revenues are pegged at $699 million, indicating an improvement of 12.9% from the year-ago quarter’s reported figure.
Image: Bigstock
Will Digital Media Strength Aid Adobe's (ADBE) Q4 Earnings?
Adobe’s (ADBE - Free Report) fourth-quarter fiscal 2023 results, scheduled to be released on Dec 13, are likely to reflect its Digital Media segment’s strength.
Digital Media has been the key driver behind the company’s growth on the back of its Creative family of products and Document Services products.
With its robust Digital Media solutions, the company helps content creators, app and game developers and creative professionals such as graphic designers, photographers and video editors to generate, publish and promote their content anywhere.
We believe that the company’s persistent efforts toward strengthening its content management capabilities are expected to continue driving growth in the Digital Media segment.
The segment under discussion generated revenues of $3.59 billion in third-quarter fiscal 2023, which improved 11% on a year-over-year basis.
For fourth-quarter fiscal 2023, Adobe expects Digital Media revenues between $3.67 billion and $3.70 billion. The Zacks Consensus Estimate for Digital Media revenues for the quarter under review is pegged at $3.68 billion, suggesting an 11.6% rise from the year-ago quarter’s reported figure.
Click here to know how the company’s overall fiscal fourth-quarter results are likely to be.
Adobe Inc. Price and EPS Surprise
Adobe Inc. price-eps-surprise | Adobe Inc. Quote
Factors to Consider
Solid momentum across Adobe Creative Cloud and Document Cloud is expected to have driven top-line growth for the Digital Media segment in the to-be-reported quarter.
Strong momentum in Adobe Firefly might have continued strengthening Adobe's prospects in the booming generative AI space. The integration of Firefly into Photoshop and Illustrator might have contributed well to top-line growth within the Digital Media segment.
For fourth-quarter fiscal 2023, Adobe expects Digital Media revenues between $3.67 billion and $3.70 billion. The Zacks Consensus Estimate for the same is pegged at $3.68 billion, indicating growth of 11.6% year over year.
Frame.io’s integration into creative software like Adobe Photoshop, Adobe Premier Pro and After Effects is likely to have benefited the segment further.
Apart from this, the monthly growing active user base of Creative Cloud Express and the new AI-powered innovations in Premiere Pro are expected to have accelerated growth in Creative revenues in the quarter under review. Strength in Adobe Stock and product-led growth motions is also likely to have benefited the Stock business during the reported quarter.
The rising proliferation of Metaverse is also likely to have aided the performance of Creative Cloud.
The Zacks Consensus Estimate for fiscal fourth-quarter Creative Cloud revenues is pegged at $2.98 billion, suggesting an improvement of 11.3% from the year-ago quarter’s reported figure.
Coming to Document Cloud, strength across web, mobile and embedded third-party app ecosystems might have contributed well to the growth in the monthly active user base. Solid momentum across the Acrobat ecosystem is likely to have remained a positive. Strong momentum in Acrobat PDF on mobile is expected to have been beneficial.
Growing adoption of Acrobat and Acrobat Sign might have been a plus. Enhanced PDF workflows across Acrobat and Express are expected to have continued to drive customer momentum further.
All these factors are anticipated to have contributed well to Document Cloud revenues.
The Zacks Consensus Estimate for fiscal fourth-quarter Document Cloud revenues are pegged at $699 million, indicating an improvement of 12.9% from the year-ago quarter’s reported figure.
Zacks Rank & Other Stocks to Consider
Currently, Adobe carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector are Badger Meter (BMI - Free Report) , Arista Networks (ANET - Free Report) and NVIDIA (NVDA - Free Report) . While Badger Meter currently sports a Zacks Rank #1 (Strong Buy), Arista Networks and NVIDIA each carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Badger Meter have gained 37.8% in the year-to-date period. BMI’s long-term earnings growth rate is currently projected at 20.39%.
Shares of Arista Networks have surged 75.9% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 19.77%.
Shares of NVIDIA have gained 167.4% in the year-to-date period. NVDA’s long-term earnings growth rate is currently projected at 13.5%.