Key Takeaways
- Adobe reported fiscal third-quarter earnings and revenue that topped expectations.
- However, its outlook for the fourth quarter missed analysts’ estimates.
- Adobe shares tumbled in extended trading Thursday following the company’s earnings release.
Adobe (ADBE) shares tumbled in extended trading Thursday after the company’s fiscal fourth-quarter outlook fell short of analysts’ expectations.
The software company said it anticipates revenue of between $5.50 billion and $5.55 billion for the fourth quarter, below estimates compiled by Visible Alpha. It projected diluted earnings per share (EPS) of $3.58 to $3.63, with analysts expecting the higher end of that range.
Outlook Overshadows Strong Q3 Results
Adobe’s weaker-than-expected outlook overshadowed an otherwise strong report, with third-quarter results that topped estimates. Adobe posted third-quarter revenue of $5.41 billion, an 11% jump year-over-year, and EPS of $3.76, up from $3.05 a year earlier.
Adobe’s Digital Media arm, which includes Creative Cloud subscriptions, posted record net-new annualized recurring revenue (ARR) of $504 million, an 8% year-over-year rise and also above analysts’ projections.
“Adobe’s record Q3 performance is a testament to our relentless innovation and commitment to delivering value to our customers,” Adobe CEO Shantanu Narayen said in a release, noting Adobe’s “advancements in AI across Creative Cloud, Document Cloud and Experience Cloud.”
Adobe shares fell more than 9% in extended trading Thursday following the company’s earnings report.