✒️Is Adobe running out of ink?

FuboTv targeted by cyber criminals.

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

Market Snapshot 📈

S&P 500 (Thursday’s Close) 3,895.75 −99.57 (2.49%)

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Adobe: Opportunist!

The design software maker, Adobe (ADBE) share rose 6% after announcing its fiscal fourth-quarter earnings and guidance that surpassed analysts’ expectations. Not taking into account the after-hours action, Adobe shares have fallen 42% this year, while the S&P 500 index has declined 18% during the same time.

How did they perform?

In the fiscal year 2022, Adobe generated $17.61 billion in revenue, which is a 12%t or 15% adjusted annual growth. The quarter, which ended on December 2, saw a 10% increase in total revenue year over year. The revenue increased by 13% from the prior quarter. The forecast, as well as the sales outlook for Adobe’s divisions, is maintained as per the company’s previous guidance shared in October.

Given its size, Adobe maintains a low profile in the industry, making it simple to overlook its expansion unless you pay close attention. When Shantanu Narayen, CEO, joined the business in 1998, its annual revenue was $895 million. It hit $3.6 billion in 2008, his first full year in the position of CEO. It was $15.8 billion last year.

Revenue from Adobe’s Digital Media division, which includes subscriptions to Creative Cloud design tools, was $3.30 billion. In the quarter, creative revenue increased by 8% and the Digital Experience unit, which includes Adobe’s marketing software, generated $1.15 billion in revenue.

The company has also reduced its workforce by 100 employees, mainly from the sales team. It is not the same in comparison to the other tech giants tightening their grip. The company also stated that it will not be conducting company-wide layoffs and will continue to hire for critical roles. As per the company’s Q3 2022 report, it employed nearly 28,700 workers.

Key statistics from Q4:

  • Earnings: $3.60 per share, adjusted, vs. $3.50 per share as expected
  • Revenue: $4.53 billion, vs. $4.53 billion as expected

New beginnings? 

In September 2022, the company announced its acquisition of Figma for roughly $20 billion in a cash-and-stock transaction. Figma, a privately held firm, is a web-based platform for collaborative design built to support product development teams. The business has accelerated and improved the design process while also raising productivity.

With its proposed acquisition of Figma, Adobe, which has long dominated the software market for design professionals, is attempting to broaden its user base to include more casual users. The transaction would be among the most costly purchases of a privately held software company ever made.

The combined business is expected to provide significant value for consumers, shareholders, and the whole industry thanks to its huge and rapidly expanding market opportunity.

The acquisition would give Adobe’s products, which the business has struggled to develop on its own, collaboration features. The acquisition must still pass regulatory inspection but is expected to close next year. Adobe claimed that Figma would also enable it to reach a new user base. The company hopes that this acquisition of Figma will bring developers and other people who generally haven’t been its clients, in addition to the designer community that already utilises its tools.

Narayen stated that the company would also concentrate on showcasing strength in its core business in order to disregard any scepticism. Will the acquisition actually change Adobe’s game?

Market Reaction
ADBE ended at $328.71, down 3.30%.

Company Snapshot 📈

ADBE $328.71, -11.21 (-3.30%).

Analyst Ratings (32 Analysts) BUY 53% HOLD 47%  SELL 00%

Newsworthy 📰

  • Bankrupt?: Avaya Veers Toward Bankruptcy Filing (AVYA -12.53%
  • Tinkered?: Some frequent fliers will find it harder to earn status on American Airlines (AAL -3.15%)
  • Cyber attack: FuboTV hit with cyberattack during World Cup semifinal match (FUBO -6.87%)

Later Today 🕒

  • Accenture plc Earnings (ACN)
  • Daily Journal Corp. Earnings (DJCO)
  • Azure Power Global Limited Earnings (AZRE)
  • AGM Group Holdings Inc. Earnings (AGMH)
  • SIFCO Industries, Inc. Earnings (SIF)

Today’s Fun Fact

The first computer virus was a Creeper.

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