Adobe tops Q3 targets on 26 percent revenue growth
Adobe released third quarter financial results after the bell on Tuesday and once again the Photoshop maker broke a corporate record for quarterly revenue.
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The software giant reported fiscal third quarter earnings of $419 million, or 84 cents a share. Non-GAAP earnings in the quarter were $1.10 a share on revenue of $1.84 billion, up from $1.73 billion from last quarter and 26 percent from the same period last year.
Wall Street was looking for earnings of $1.01 a share on revenue of $1.82 billion.
Revenue from Adobe's Digital Media unit, which includes Creative Cloud, was $1.27 billion, bringing its annualized recurring revenue to $4.87 billion. Broken out, Creative Cloud revenue was $1.06 billion, up 33 percent from last year.
Adobe said revenue from its Experience Cloud brought in $508 million for the quarter, an increase of 26 percent above last year, while Document Cloud revenue was $206 million.
Adobe CEO Shantanu Narayen noted that he was "disappointed" with Experience Cloud bookings in Q3 but said he remains "confident in our ability to execute against this large opportunity." Experience Cloud includes Adobe's Marketing, Analytics, and Advertising cloud products.
Narayen did highlight Adobe's AI framework Sensei, adding that Adobe is "investing deeply" in the platform.
"We are making the Adobe Sensei framework and intelligent services available to our ecosystem of partners, ISVs and developers who will deliver additional magic," Narayen said.
In terms of guidance, Adobe now projects fourth quarter earnings of $1.15 per share with revenue $1.95 billion. Analysts are looking for earnings of at least $1.10 a share on revenue of $1.95 billion. Adobe's shares were down around 2 percent after hours.