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Will Adobe's (ADBE) Q1 Earnings Gain From Digital Media?
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Adobe’s (ADBE - Free Report) first-quarter fiscal 2024 results, scheduled to be released on Mar 14, are likely to reflect the strength of its Digital Media segment.
Digital Media has been the key driver behind the company’s growth, backed by its Creative family of products and Document Services products.
The company’s persistent efforts to strengthen its content management capabilities are expected to have continued driving growth in the Digital Media segment in the to-be-reported quarter.
The segment under discussion generated revenues of $3.72 billion in fourth-quarter fiscal 2023, which improved 13% on a year-over-year basis.
For first-quarter fiscal 2023, Adobe expects Digital Media revenues of $3.77-$3.80 billion. The Zacks Consensus Estimate for the same is pegged at $3.786 billion, indicating year-over-year growth of 11.5%.
Click here to know how the company’s overall fiscal first-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.
Adobe’s growing momentum in generative AI, on the back of Firefly, is anticipated to have been a major positive. The integration of generative AI capabilities into Photoshop, Illustrator and Adobe Express is likely to have benefited the performance of Creative Cloud.
The solid momentum of Creative Cloud All Apps subscription across various geographies and emerging markets is expected to have contributed well. Strength in Adobe Stock is likely to have been another plus.
Increasing migration of graduating students to full-priced offerings, owing to rising demand in education, is expected to have been a tailwind.
Frame.io’s integration into creative software like Adobe Photoshop, Adobe Premier Pro, After Effects and other Adobe Creative Cloud applications is likely to have driven growth. Increasing traffic on the Adobe Express platform is expected to have aided the performance of Creative Cloud.
The Zacks Consensus Estimate for fiscal first-quarter Creative Cloud revenues is pegged at $3.06 billion, implying growth of 10.8% from the year-ago quarter’s actual.
Apart from this, solid momentum across the Acrobat ecosystem, on the back of growing Acrobat verb searches and PDF consumption via Chrome and Edge extensions, is likely to have bolstered the monthly active user base of Acrobat Web in the quarter under review. This, in turn, is expected to have driven Document Cloud’s revenue growth.
The growing demand for PDF collaboration services is anticipated to have been a tailwind. Solid demand for Adobe Scan and Adobe Sign is likely to have benefited Document Cloud in the quarter under review.
The Zacks Consensus Estimate for fiscal first-quarter Document Cloud revenues is pegged at $726 million, suggesting growth of 14.5% from the year-ago quarter’s actual.
All the above-mentioned factors are expected to have contributed well to Creative annualized recurring revenues (ARR) and Document Cloud ARR, which, in turn, are anticipated to have driven growth in Digital Media ARR in the to-be-reported quarter.
The company’s net new ARR in the Digital Media segment is projected to be $410 million for the quarter under review.
Image: Bigstock
Will Adobe's (ADBE) Q1 Earnings Gain From Digital Media?
Adobe’s (ADBE - Free Report) first-quarter fiscal 2024 results, scheduled to be released on Mar 14, are likely to reflect the strength of its Digital Media segment.
Digital Media has been the key driver behind the company’s growth, backed by its Creative family of products and Document Services products.
The company’s persistent efforts to strengthen its content management capabilities are expected to have continued driving growth in the Digital Media segment in the to-be-reported quarter.
The segment under discussion generated revenues of $3.72 billion in fourth-quarter fiscal 2023, which improved 13% on a year-over-year basis.
For first-quarter fiscal 2023, Adobe expects Digital Media revenues of $3.77-$3.80 billion. The Zacks Consensus Estimate for the same is pegged at $3.786 billion, indicating year-over-year growth of 11.5%.
Click here to know how the company’s overall fiscal first-quarter results are likely to be.
Adobe Inc. Price and Consensus
Adobe Inc. price-consensus-chart | 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.
Adobe’s growing momentum in generative AI, on the back of Firefly, is anticipated to have been a major positive. The integration of generative AI capabilities into Photoshop, Illustrator and Adobe Express is likely to have benefited the performance of Creative Cloud.
The solid momentum of Creative Cloud All Apps subscription across various geographies and emerging markets is expected to have contributed well. Strength in Adobe Stock is likely to have been another plus.
Increasing migration of graduating students to full-priced offerings, owing to rising demand in education, is expected to have been a tailwind.
Frame.io’s integration into creative software like Adobe Photoshop, Adobe Premier Pro, After Effects and other Adobe Creative Cloud applications is likely to have driven growth. Increasing traffic on the Adobe Express platform is expected to have aided the performance of Creative Cloud.
The Zacks Consensus Estimate for fiscal first-quarter Creative Cloud revenues is pegged at $3.06 billion, implying growth of 10.8% from the year-ago quarter’s actual.
Apart from this, solid momentum across the Acrobat ecosystem, on the back of growing Acrobat verb searches and PDF consumption via Chrome and Edge extensions, is likely to have bolstered the monthly active user base of Acrobat Web in the quarter under review. This, in turn, is expected to have driven Document Cloud’s revenue growth.
The growing demand for PDF collaboration services is anticipated to have been a tailwind. Solid demand for Adobe Scan and Adobe Sign is likely to have benefited Document Cloud in the quarter under review.
The Zacks Consensus Estimate for fiscal first-quarter Document Cloud revenues is pegged at $726 million, suggesting growth of 14.5% from the year-ago quarter’s actual.
All the above-mentioned factors are expected to have contributed well to Creative annualized recurring revenues (ARR) and Document Cloud ARR, which, in turn, are anticipated to have driven growth in Digital Media ARR in the to-be-reported quarter.
The company’s net new ARR in the Digital Media segment is projected to be $410 million for the quarter under review.
Zacks Rank & Stocks to Consider
Currently, Adobe carries a Zacks Rank #2 (Buy).
Some better-ranked stocks in the broader technology sector are CrowdStrike (CRWD - Free Report) , Badger Meter (BMI - Free Report) and AMETEK (AME - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of CrowdStrike have gained 25.7% in the year-to-date period. The long-term earnings growth rate for CRWD is 36.07%
Shares of Badger Meter have gained 2.2% in the year-to-date period. The long-term earnings growth rate for BMI is 12.27%.
Shares of AMETEK have gained 8.4% in the year-to-date period. The long-term earnings growth rate for AME is 9.19%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.