Adobe Q2 tops estimates with record revenue
Adobe delivered better-than-expected second quarter financial results on Tuesday. The cloud giant reported fiscal second quarter earnings of $632 million, or $1.29 a share. Non-GAAP earnings in the quarter were $1.83 a share on revenue of $2.74 billion, up 25% from a year ago. Wall Street was looking for earnings of $1.78 a share on revenue of $2.7 billion.
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The Photoshop maker said subscription revenue was $2.46 billion, product revenue was $152.8 million, and that services and support revenue reached $135 million.
Revenue from Adobe's Digital Media unit overall was $1.89 billion and Digital Experience segment revenue was $784 million. Broken out, Creative Cloud revenue reached $1.59 billion in Q2, while Document Cloud was $296 million. Meanwhile, Adobe said annualized recurring revenue in its Digital Media unit grew to $7.47 billion, a quarter-over-quarter increase of $406 million.
For the current quarter, analysts are looking for earnings of at least $2.05 a share on revenue of $2.83 billion. Adobe responded with a revenue estimate of $2.8 billion with non-GAAP earnings of $1.95.
Adobe's acquisitions of Marketo and Magento garnered considerable attention from executives on the company's earnings call. Adobe CEO Shantanu Narayen said the acquisitions helped the company attract new customers and expand its addressable market, noting deepened integrations between Adobe Marketing Cloud and Marketo Engage, as well as the launch of Adobe Commerce Cloud, built on the Magento Commerce platform.
Similarly, Adobe CFO John Murphy highlighted the company's focus in Q2 on driving synergies between Magento and Marketo, including organizational, product and go-to-market alignment.
"The depth and breadth of our enterprise partner ecosystem remains a competitive advantage contributing to pipeline generation, customer success as well as financial performance," Murphy added. "We had another successful quarter of selling alongside Microsoft, where our combined value proposition is resonating with enterprise customers."
Shares of Adobe were up slightly after hours.