Adobe Inc (NASDAQ:ADBE) gave weak guidance

Adobe Inc (NASDAQ:ADBE) stock fell 2.45% (As on June 17, 11:13:08 AM UTC-4, Source: Google Finance) after the company gave full-year guidance that fell short of analysts’ expectations. Adobe’s net income in the fiscal second quarter, at $1.18 billion, was up about 6%. Adobe’s Digital Media segment, which includes Creative Cloud and Document Cloud products, reported $3.20 billion in revenue, up 15% and more than the StreetAccount consensus estimate of $3.16 billion. The Digital Experience business, which includes Adobe’s Experience Cloud that companies use for marketing and commerce, contributed $1.10 billion, up 17% and above the $1.08 billion StreetAccount consensus. During the quarter Adobe announced price hikes for certain Creative Cloud subscriptions, citing the launch of new applications. The company didn’t institute a larger price increase because it’s focused on adding new users, said David Wadhwani, President of the Digital Media business. Adobe ended the quarter with $4.88 billion in deferred revenue, down from $5.02 billion three months earlier and below the StreetAccount consensus of $5.00 billion. It had over $5 billion in cash, cash equivalents and short-term investments.

ADBE in the second quarter of FY 22 has reported the adjusted earnings per share of $3.35, beating the analysts’ estimates for the adjusted earnings per share of $3.31, according to Refinitiv. The company had reported the adjusted revenue growth of 14 percent to $4.39 billion in the second quarter of FY 22, beating the analysts’ estimates for revenue of $4.34 billion.

Moreover, during the second quarter, there is a strong growth in monthly active users across desktop, mobile and web. The rising volume of search traffic for Acrobat verbs remains a productive funnel to Acrobat web, which surpassed 50 million monthly active users in Q2, more than doubling year over year. Acrobat and Adobe Sign integration continues to drive strong demand for Adobe Sign, as users increasingly send PDFs for signature directly from the unified Acrobat experience; • Acrobat and Adobe Express integrations now give hundreds of millions of Acrobat users the ability to embed customized templates and make their PDFs visually stunning.

For the full fiscal year, Adobe reduced its guidance. It called for $13.50 in adjusted earnings per share on $17.65 billion in revenue. Analysts polled by Refinitiv had expected $13.66 in adjusted EPS and revenue of $17.85 billion. In December the guidance for the 2022 fiscal year was $13.70 in adjusted earnings per share and $17.90 billion in revenue.

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