Adobe Reports Record Q4 and Fiscal 2024 Revenue, Beats Earnings Estimates

Adobe Inc. (ADBE) has reported strong financial results for the fourth quarter and fiscal year 2024, exceeding analyst expectations. The company achieved a record revenue of $21.51 billion for the fiscal year 2024, representing an 11% year-over-year growth. For the fourth quarter, Adobe generated $5.61 billion in revenue, surpassing the consensus estimate of $5.54 billion.

In terms of earnings per share (EPS), Adobe reported $4.81 for the fourth quarter, which is $0.14 better than the analyst estimate of $4.67. This marks the company’s 11th consecutive quarter of beating EPS estimates.

The Digital Media segment saw a 12% growth to $4.15 billion in the fourth quarter, while the Digital Experience segment increased by 10% to $1.40 billion. Adobe also reported record operating cash flows of $2.92 billion and Remaining Performance Obligations (RPO) of $19.96 billion for the fourth quarter.

Looking ahead, Adobe provided guidance for fiscal year 2025, projecting revenue between $23.30 billion and $23.55 billion, with EPS expected to be between $20.20 and $20.50. For the first quarter of 2025, the company anticipates EPS of $4.95-$5.00 and revenue of $5.63 billion-$5.68 billion.

Analysts have highlighted the durability of Adobe’s subscription growth and high operating margins, despite concerns about the impact of artificial intelligence on the company’s business. Piper Sandler analyst Brent Bracelin noted that Adobe could offer a compelling risk-reward profile ahead of 2025, with the potential for the stock to transition from a laggard to a leader.

The market is anticipating a significant move in Adobe’s stock price following the earnings report, with implied volatility suggesting a potential move of around 7.3%.