Adobe (ADBE) 2021 Q1 Earnings Report Review

Adobe Inc (NASDAQ:ADBE) has been around for nearly three decades. It was founded in 1982 by former Xerox Corp. employees named John Warnock and Charles Geschke. The company initially focused on designing specialized printing software. Soon after its inception, Adobe launched a page-description language called PostScript, which enabled users to produce high-quality documents back then. Today, Adobe is one of the world’s biggest and most diversified software companies. It is mostly known for its media editing applications such as Photoshop and Illustrator.

Like rival software companies, Adobe also performed well over the past year, as demand for its products and solutions remained strong during the Covid-19 pandemic. As a result, ADBE stock jumped nearly 50 percent in 2020.

The company is also doing great in terms of financial performance. It recently announced better-than-expected results for the first quarter. Adobe reported earnings of $1.26 billion, or $2.61 per share for the three months ended March 5, well above $955 million, or $1.98 per share in the comparable period of 2020. On an adjusted basis, it earned $3.14 per share, easily beating the consensus forecast of $2.79 per share.

Revenue for the quarter jumped 26 percent on a year-over-year basis to $3.91 billion, beating analysts’ average forecast of $3.75 billion. If we look at the performance of key segments, revenue from the Digital Media segment climbed 32 percent to $2.86 billion, Creative revenue increased 31 percent to $2.38 billion, while revenue from the Document Cloud segment soared 37 percent to $480 million in the quarter.

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Commenting on the latest results, CEO Shantanu Narayen said in a statement, “Adobe drove record Q1 revenue and we are raising our annual targets based on the tremendous opportunity across our business and our continued confidence in our global execution.”

Looking forward, Adobe expects an adjusted profit of $11.85 per share on revenue of $15.45 billion for fiscal 2021. Analysts on average had estimated an adjusted profit of $11.27 per share and revenue of $15.17 billion.

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