Adobe Shares jumped 15% on Friday, their biggest gain since March 2020, after the software maker reported profit and revenue that beat analysts’ expectations.
After the bell on Thursday, Adobe report Adjusted earnings per share were $4.48, beating LSEG’s consensus estimate of $4.39. Revenue rose 10% year over year to $5.31 billion, beating analysts’ expectations of $5.29 billion.
CEO Shantanu Narayen said Adobe’s record revenue was driven by strong growth in Creative Cloud, Document Cloud and Experience Cloud, as well as advances in artificial intelligence.
“Our highly differentiated approach to AI and innovative product offerings is attracting a growing customer base and providing increased value to our existing users,” Narayan said. press release On Thursday.
New annual recurring revenue from its digital media business, which includes Creative Cloud subscriptions, came in at $487 million, beating the StreetAccount consensus estimate of $437.4 million.
Adobe’s results stand in contrast to what software investors have seen recently from many industry players. Salesforce Shares suffered their worst drop since 2004 late last month after the cloud software vendor reported weaker-than-expected revenue and disappointing guidance. MongoDBSentinelOne, UiPath and Veeva all lowered their full-year revenue forecasts.
However, there have been some positive signs on this front this week. Oracle Shares rose after the database company announced a cloud deal. Google And OpenAI, despite its fourth-quarter results missing Wall Street expectations, Crowdstrike Shares surged on Monday after the cybersecurity company announced it would be joining the S&P 500 after trading closed last Friday.
Analysts at JMP, who have a hold rating on Adobe, wrote in a post-earnings note that the company’s performance is strong despite a tough economic environment and increased competition in the design software market.
“We appreciate how Adobe is integrating AI capabilities across its entire product portfolio,” the analysts wrote.
Meanwhile, analysts at Piper Sandler slightly raised their fiscal 2024 revenue estimates to $73 million and fiscal 2025 revenue estimates to $71 million.
“Customer response to recent innovations has been positive, and the increased availability of AI-powered solutions is expected to drive additional user acquisition and improved average revenue per user,” Piper Sandler analysts wrote, recommending a buy position on the stock.
Even after Friday’s gains, Adobe shares are still down 12% since the beginning of the year. The stock closed at $525.31.