Adobe Q1 results beat estimates; CEO to step down
Overview
US creative software firm's Q1 revenue rose 12% yr/yr, beating analyst expectations
Adjusted EPS for Q1 beat analyst expectations
CEO Shantanu Narayen to step down after successor is named, will remain board chair
Outlook
Adobe sees Q2 revenue between $6.43 bln and $6.48 bln
Company expects Q2 GAAP EPS of $4.35 to $4.40 and non-GAAP EPS of $5.80 to $5.85
Adobe is reaffirming previously issued FY2026 targets
Result Drivers
AI-RELATED GROWTH - Co said 'AI-first ARR' more than tripled yr/yr, contributing to overall results
SUBSCRIPTION REVENUE - Total subscription revenue rose 13% yr/yr, with growth across customer segments
CASH FLOW - Record Q1 operating cash flows of $2.96 bln supported financial performance
Company press release: ID:nBw8Rkzcla
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q1 Revenue | Beat | $6.40 bln | $6.28 bln (25 Analysts) |
Q1 Adjusted EPS | Beat | $6.06 | $5.87 (26 Analysts) |
Q1 EPS |
| $4.60 |
|
Q1 Adjusted Net Income | Beat | $2.49 bln | $2.41 bln (21 Analysts) |
Q1 Net Income |
| $1.89 bln |
|
Q1 Adjusted Operating Income | Beat | $3.04 bln | $2.93 bln (23 Analysts) |
Q1 Operating Income |
| $2.42 bln |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 22 "strong buy" or "buy", 14 "hold" and 4 "sell" or "strong sell"
The average consensus recommendation for the software peer group is "buy"
Wall Street's median 12-month price target for Adobe Inc is $397.25, about 45.1% above its March 11 closing price of $273.71
The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 14 three months ago
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