Adobe’s (ADBE) fiscal third quarter results topped Wall Street estimates on both the top and bottom lines. The software company reported adjust earnings of $4.09 compared to estimates of $3.98. The company also reported record revenue of $4.89 billion versus expectations of $4.87 billion. Its earnings forecast for the fourth quarter was also better than expected, while the revenue outlook was in line with analyst expectations. Yahoo Finance Live breaks down Adobe’s latest quarterly results.
AKIKO FUJITA: We are watching shares of Adobe right now after the company released its latest quarterly results. We are seeing that stock down just slightly despite a beat on the top and bottom lines. Let’s run you through some of the numbers here.
In terms of revenue coming in at $4.89 billion in the third quarter. Looking at earnings, let’s do the numbers there. $4.09 versus a $3.98. That was expected. The company specifically focused on their offerings on generative AI with CEO Shantanu Narayen saying that we are unleashing a new era of AI enhanced creativity around the world with innovations across our product portfolio.
Of course, a number of those offerings were announced yesterday. That’s going to be one of the questions on the earnings call in terms of the pricing strategy for Adobe. But business segment highlights looking through those numbers there, the digital media segment revenue came in at $3.59 billion.
New digital media, we’re talking about annualized recurring revenue there coming at $464 million. And looking at the stock again, down just slightly. But, again, Seana, the discussion here is going to be about how those offerings which Adobe has been quite aggressive about on generative AI, how that’s going to bring in the revenue for the company and how they’re looking at pricing? We keep saying the show me quarter, but this company, no different.
SEANA SMITH: Yeah. It’s certainly going to be one of the focuses here on this call when we talk about the ramp up potentially that the company is doing with the AI generative related products, what that means ultimately for the business in the short-term because of that cost.
But in the long-term, given the fact that it could potentially really boost their business here. But a strong quarter, at least it looks like on the surface here for Adobe with a beat on both the top and bottom lines. Revenue growth was up 10% on a year over year basis. Subscription growth was also up 12% from a year ago.
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