Adobe affirms sales forecast on steady demand for design software
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ADOBE affirmed its annual revenue forecast, signalling it’s seeing steady demand for creative design and analytics software despite the uncertain economy. The shares gained about 6 per cent in extended trading.
The company also said it expects to complete its US$20 billion purchase of Figma next year, despite regulatory review in the US, UK and Europe.
Revenue will be about US$19.2 billion in fiscal 2023, which began this month. Profit, excluding some items, will be US$15.15 to US$15.45 a share, the company said Thursday (Dec 15) in a statement. The forecast, as well as the sales outlook for Adobe’s divisions, was the same as the company’s previous guidance given in October. Adobe’s forecast doesn’t include any contribution from Figma.
“Strong demand for our offerings, industry-leading innovation and track record of top and bottom-line growth set us up to capture the massive opportunities in 2023 and beyond,” chief financial officer Dan Durn said in the statement.
Adobe, which has dominated the software market for design professionals, is seeking to expand its user base to more casual consumers with its proposed acquisition of Figma, announced in September. The deal would be one of the most-expensive purchases ever of a private software maker.
The company said it also expects European Union regulators will review the deal, according to a transcript of remarks prepared for a conference call later Thursday.
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“Overall the regulatory process is proceeding as expected,” David Wadhwani, Adobe’s president of digital media, said according to the transcript. “We continue to feel positive about the facts underlying the transaction and expect to receive approval to close the transaction in 2023.”
Despite concerns about the price, the Figma acquisition should support “Adobe’s leading position in digital creation and marketing”, Brian Schwartz, an analyst at Oppenheimer, said ahead of earnings.
The shares jumped to a high of US$350.93 in extended trading after closing at US$328.71 in New York. The stock has tumbled 42 per cent this year as investors have soured on most software companies.
Revenue increased 10 per cent to US$4.53 billion in the fiscal fourth quarter, in line with estimates. Profit, excluding some items, was US$3.60 a share in the period ended Dec 2. Analysts, on average, projected US$3.50. Adobe has avoided major job cuts like those announced by many tech companies, including Meta Platforms and Amazon.com, but last week eliminated about 100 positions concentrated in sales.
Sales in digital media, the division that includes Photoshop and other signature software, increased 10 per cent to US$3.3 billion in quarter. Revenue in the digital experience unit, which includes analytics and marketing, rose 14 per cent to US$1.15 billion. BLOOMBERG
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