Adobe reports mixed Q4 results, updates outlook to include Marketo
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Adobe released fourth quarter and fiscal 2018 financial results after the bell on Thursday. As usual, the Photoshop maker said its results broke corporate records for quarterly and annual revenue, but some of the numbers fell short of Wall Street expectations.
The software giant reported Q4 net income of $678 million, or $1.37 a share. Non-GAAP earnings in the quarter were $1.83 a share on revenue of $2.46 billion, up 23 percent from the same period last year. Wall Street was looking for earnings of $1.88 a share on revenue of $2.43 billion.
For the year Adobe's results were also mixed, with the company reporting revenue of $9.03 billion and earnings of $6.76 per share, compared to analyst estimates for revenue of $8.99 billion and EPS of $6.82.
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This is Adobe's first financial report since acquiring marketing automation firm Marketo for $4.75 billion back in October. Adobe said the purchase added approximately $21 million of revenue in the fourth quarter. Adobe usually breaks out exact revenue for its various clouds and business units, but today's earnings release only offered metrics for year-over-year growth.
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The company said revenue from its Digital Media unit, which includes Creative Cloud, was up 23 percent from last year while digital experience revenue was up 25 percent. All told, Adobe said its annualized recurring revenue in Q4 came to $430 million.
CEO Shantanu Narayen said in prepared remarks: "In 2018 we made significant investments across our product portfolio, entered new markets, and made strategic acquisitions which we believe will fuel continued top and bottom-line performance."
In terms of guidance, Adobe said it's updating its outlook to include its acquisition of Marketo, with a first quarter EPS target of $1.60 a share on revenue of $2.54 billion. Analysts are looking for Q1 earnings of at least $1.88 a share on revenue of $2.52 billion.