Adobe Inc (NASDAQ:ADBE) Thursday reported upbeat fiscal third-quarter results.
Here are some key analyst takeaways:
- Citizens JMP Securities analyst Patrick Walravens reiterated a Market Perform rating.
- BTIG analyst Nick Altmann reaffirmed a Neutral rating on the stock.
Check out other analyst stock ratings.
Citizens JMP Securities: Adobe’s quarterly results were mostly better than expected, with non-GAAP earnings of $6.13 per share topping consensus of $6.06 per share, Walravens said in a note. While revenues of $6.76 billion came in higher than the estimate of $6.69 billion, this represented a slight deceleration to 12.9% year-on-year growth from 13% in the previous quarter, he added.
The analyst noted that Adobe’s guidance included:
- Fourth-quarter non-GAAP earnings of $6.30-$6.35 per share on total revenue of $6.80-$6.85 billion, versus consensus estimates of $6.31 per share and $6.84 billion, respectively.
- Fiscal 2027 non-GAAP earnings of $24.45-$24.50 per share on total revenue of $26.576-$26.626 billion, compared to Street expectations of $24.40 per share and $26.523 billion, respectively.
“Adobe is demonstrating signs of success in pursuing its strategy of driving monthly active users (MAUs) under its freemium model in advance of converting those users to ARR,” he further wrote.
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BTIG: Adobe’s ARR (annual recurring revenue) grew 11.2% to $27.5 billion, slightly ahead of consensus of 11%, Altmann said. Although not reported explicitly, ARR growth likely decelerated to 9.2% from 10.5% in the previous quarter, excluding Semrush, he added.
Management kept ARR guidance for fiscal 2027 unchanged at 10.2%, which implies a 16% year-on-year decline in net new ARR in the fourth quarter, versus a 39% decline in the third quarter, the analyst stated.
AI-first ARR grew by more than 150% year-on-year in the quarter to cross $650 million, implying around $150 million in net new AI-first ARR versus $125 million in the previous quarter, Altmann noted. This was driven by “strength in Firefly services, credit packs, Acrobat AI Assistant, and a full quarter of Semrush contribution,” he further wrote.
ADBE Price Action: Shares of Adobe had declined by 0.08% to $248.63 at the time of publication on Friday.
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