Key Takeaways:
- Adobe reported record-high revenue of $5.18 billion for the first fiscal quarter of 2024, surpassing analyst estimates.
- Net income for the quarter was $2.05 billion, while diluted earnings per share stood at $4.48, both exceeding projections.
- Despite strong first-quarter performance, Adobe’s shares dropped in after-hours trading due to soft guidance for the second quarter.
- Adobe provided a revenue outlook of $5.25 billion to $5.3 billion for the second quarter, slightly below analysts’ expectations of $5.3 billion.
- Unlike the previous year, Adobe did not offer guidance for the full year in the first quarter of 2024.
- Adobe announced a $25 billion buyback program as part of its financial strategy.
Adobe (ADBE) shares took a significant hit, plummeting 11% in after-hours trading on Thursday. This decline came despite the company reporting first-quarter earnings that surpassed analyst estimates. However, Adobe issued soft guidance for the second quarter, prompting investor concerns.
For the first fiscal quarter of 2024, Adobe reported record-high revenue of $5.18 billion. This figure exceeded analyst estimates compiled by Visible Alpha and marked an impressive 11% year-over-year growth.
Additionally, Adobe’s net income for the quarter reached $2.05 billion, surpassing analysts’ expectations and showing growth compared to both the previous quarter and the year-ago period. Diluted earnings per share (EPS) stood at $4.48, also exceeding projections and demonstrating growth from the previous quarter and year.
Despite the strong first-quarter performance, Adobe’s guidance for the second quarter fell slightly short of expectations. The company forecasted revenue in the range of $5.25 billion to $5.3 billion, with analysts anticipating guidance at the higher end of this range, around $5.3 billion. Similarly, Adobe’s outlook for diluted EPS for the upcoming quarter was in line with analyst expectations, ranging from $4.35 to $4.40.
Notably, Adobe did not provide guidance for the full year, deviating from its practice in the first quarter of 2023.
During the first quarter of 2024, Adobe decided to terminate its acquisition of Figma, resulting in a $1 billion termination fee.
In addition to these developments, Adobe announced a significant $25 billion buyback program, signaling confidence in its future prospects.
Following the earnings report and guidance announcement, Adobe shares experienced a sharp decline, dropping 11% in after-hours trading to $507.99. However, despite this decline, the stock had posted significant gains of about 70% over the past year through Thursday’s close.