☁️ Adobe: Documents In The Creative Cloud?

Tencent Music announces biggest ever share buyback


Hey Global Investor, here’s what you need to know before the US markets open.

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☁️ Adobe: Documents In The Creative Cloud?

Adobe (ADBE) reported earnings last week, beating expectations once again.

Background: Founded in 1982, Adobe was instrumental in the desktop publishing revolution through its PostScript printer language. PostScript made Adobe profitable in its first year, thanks to the licensing fee from Apple. The first Silicon Valley company to achieve this feat, Adobe went public four years later, in 1986.

Adobe had a resilient growth history that pushed its market valuation to $224.8B as of 2021. Since Shantanu Narayen took over as CEO in 2007, there’s been no looking back for the company. What followed was years of expansion with new tools and acquisitions. However, the most significant turning point was the introduction of Creative Cloud in 2013.

Thanks to the creative cloud and document cloud platforms (largest globally), the company’s performance in the post-Covid world has been remarkable. The demand for its services was mainly fueled by SMEs (Small and Medium Enterprises), which were looking to keep business going despite the pandemic.

What Happened?: The company had an excellent Q1 with earnings beating its expectations as well as analyst projections to boot. Adobe has been surpassing consensus EPS estimates for the last four quarters.

Here are key Q1 stats:

  • Revenue was $3.91B, up 26% Vs. $3.76B expected
  • EPS was $3.14 Vs. $2.78 expected
  • Net income was $1.26B, up 31%

The digital business contributed $2.86B to the revenues, up 32% Y-o-Y. To assist marketers working from home in managing their work, Adobe recently acquired Workfront, a work management platform for marketers, for $1.5B. Workfront brought in $38M for the quarter.

Adobe has also issued improved full-year guidance and investors have cheered the update. The expected revenue for the year ending in November is $15.45B and EPS of $11.85 (as against the prior forecast of $15.15B in revenue and EPS of $11.20). Moreover, Adobe is set to partner with multiple government agencies in the US to help modernize and digitize their systems.

Separately, Adobe has appointed an International Advisory Board to guide customers through the dynamic Covid-19 landscape. The company also signed an Equal Pay Pledge along with Twitter and more to benefit female employees. Adobe is making the right moves on all fronts, and the stars seem well aligned on its push to move document creation and creative content generation wholly to the cloud for its clients – be they individuals or companies.

Market Reaction: ADBE closed at $469.09, up 4.01%. In pre-market trading, the stock is down 0.19%.

Company Snapshot 📈

ADBE $469.09 +18.10 (+4.01%)

Analyst Ratings (22 Analysts) BUY 77%   HOLD 23%   SELL 00%


Newsworthy 📰

Deep Dive:Facebook, Google plan new undersea cables to connect Southeast Asia and America (FB +1.54%, GOOG -0.43%)

Streaming: HBO Max begins rolling out audio descriptions (T  +0.76%)

Buyback: Tencent Music Entertainment Group Announces $1 billion Share Repurchase Program (TME -1.28%)


Later Today 🕒

  • Before Market Open: Cal-Maine Foods Inc Earnings (CALM)
  • 7:30 PM IST: Existing home sales (SAAR)

Fun Fact of The Day 🌞

Dogs can sense fear

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