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Will Adobe's (ADBE) Q3 Earnings Gain From Digital Media?
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Adobe’s (ADBE - Free Report) third-quarter fiscal 2024 results, scheduled to be released on Sept. 12, are likely to reflect the strength of its Digital Media segment.
Digital Media has been the key driver behind the company’s growth, backed by its Creative family of products and Document Services products.
The company’s persistent efforts to strengthen its content management capabilities are expected to have continued to drive growth in the Digital Media segment in the to-be-reported quarter.
The segment under discussion generated revenues of $3.91 billion in second-quarter fiscal 2024, which improved 11% on a year-over-year basis.
For third-quarter fiscal 2024, Adobe expects Digital Media revenues of $3.95-$3.98 billion. The Zacks Consensus Estimate for the same is pegged at $3.968 billion, indicating year-over-year growth of 10.4%.
Click here to know how the company’s overall fiscal third-quarter performance is likely to have been.
Digital Media Momentum to Consider Ahead of ADBE’s Q3 Results
Solid momentum across Adobe Creative Cloud and Document Cloud is expected to have driven top-line growth for the Digital Media segment in the to-be-reported quarter.
Adobe’s growing momentum in generative AI, on the back of Firefly, is anticipated to have been a major positive. The integration of generative AI capabilities into Photoshop, Illustrator and Adobe Express is likely to have benefited the performance of Creative Cloud.
The solid momentum of Creative Cloud All Apps subscription across various geographies and emerging markets is expected to have contributed well. Strength in Adobe Stock is likely to have been another plus.
The growing traction across Express mobile and Express for Business is anticipated to have contributed to the company’s performance well.
Frame.io’s integration into creative software like Adobe Photoshop, Adobe Premier Pro, After Effects and other Adobe Creative Cloud applications is likely to have driven growth. Increasing traffic on the Adobe Express platform is expected to have aided the performance of Creative Cloud.
The Zacks Consensus Estimate for fiscal third-quarter Creative Cloud revenues is pegged at $3.176 billion, implying growth of 9.2% from the year-ago quarter’s actual.
Apart from this, solid momentum across the Acrobat ecosystem, on the back of growing Acrobat searches and PDF consumption, is likely to have bolstered the monthly active user base of Acrobat Web in the quarter under review.
Positive contributions from collaborations with Microsoft (MSFT - Free Report) and Alphabet (GOOGL - Free Report) are expected to have aided the performance of Document Cloud. Microsoft Edge and Google Chrome integrations into Acrobat Web are likely to have bolstered free-to-paid conversions in the quarter under review. Growing Teams subscription unit sales to SMBs are anticipated to have been positive.
The increasing demand for PDF collaboration services is anticipated to have been a tailwind. Solid demand for Adobe Scan and Adobe Sign is likely to have benefited Document Cloud in the quarter under review.
The Zacks Consensus Estimate for fiscal third-quarter Document Cloud revenues is pegged at $791 million, suggesting growth of 15.5% from the year-ago quarter’s actual.
All the above-mentioned factors are expected to have contributed well to Creative annualized recurring revenues (ARR) and Document Cloud ARR, which, in turn, are anticipated to have driven growth in Digital Media ARR in the to-be-reported quarter.
The company’s net new ARR in the Digital Media segment is projected to be $460 million for the quarter under review.
Image: Bigstock
Will Adobe's (ADBE) Q3 Earnings Gain From Digital Media?
Adobe’s (ADBE - Free Report) third-quarter fiscal 2024 results, scheduled to be released on Sept. 12, are likely to reflect the strength of its Digital Media segment.
Digital Media has been the key driver behind the company’s growth, backed by its Creative family of products and Document Services products.
The company’s persistent efforts to strengthen its content management capabilities are expected to have continued to drive growth in the Digital Media segment in the to-be-reported quarter.
The segment under discussion generated revenues of $3.91 billion in second-quarter fiscal 2024, which improved 11% on a year-over-year basis.
For third-quarter fiscal 2024, Adobe expects Digital Media revenues of $3.95-$3.98 billion. The Zacks Consensus Estimate for the same is pegged at $3.968 billion, indicating year-over-year growth of 10.4%.
Click here to know how the company’s overall fiscal third-quarter performance is likely to have been.
Adobe Inc. Price and Consensus
Adobe Inc. price-consensus-chart | Adobe Inc. Quote
Digital Media Momentum to Consider Ahead of ADBE’s Q3 Results
Solid momentum across Adobe Creative Cloud and Document Cloud is expected to have driven top-line growth for the Digital Media segment in the to-be-reported quarter.
Adobe’s growing momentum in generative AI, on the back of Firefly, is anticipated to have been a major positive. The integration of generative AI capabilities into Photoshop, Illustrator and Adobe Express is likely to have benefited the performance of Creative Cloud.
The solid momentum of Creative Cloud All Apps subscription across various geographies and emerging markets is expected to have contributed well. Strength in Adobe Stock is likely to have been another plus.
The growing traction across Express mobile and Express for Business is anticipated to have contributed to the company’s performance well.
Frame.io’s integration into creative software like Adobe Photoshop, Adobe Premier Pro, After Effects and other Adobe Creative Cloud applications is likely to have driven growth. Increasing traffic on the Adobe Express platform is expected to have aided the performance of Creative Cloud.
The Zacks Consensus Estimate for fiscal third-quarter Creative Cloud revenues is pegged at $3.176 billion, implying growth of 9.2% from the year-ago quarter’s actual.
Apart from this, solid momentum across the Acrobat ecosystem, on the back of growing Acrobat searches and PDF consumption, is likely to have bolstered the monthly active user base of Acrobat Web in the quarter under review.
Positive contributions from collaborations with Microsoft (MSFT - Free Report) and Alphabet (GOOGL - Free Report) are expected to have aided the performance of Document Cloud. Microsoft Edge and Google Chrome integrations into Acrobat Web are likely to have bolstered free-to-paid conversions in the quarter under review. Growing Teams subscription unit sales to SMBs are anticipated to have been positive.
The increasing demand for PDF collaboration services is anticipated to have been a tailwind. Solid demand for Adobe Scan and Adobe Sign is likely to have benefited Document Cloud in the quarter under review.
The Zacks Consensus Estimate for fiscal third-quarter Document Cloud revenues is pegged at $791 million, suggesting growth of 15.5% from the year-ago quarter’s actual.
All the above-mentioned factors are expected to have contributed well to Creative annualized recurring revenues (ARR) and Document Cloud ARR, which, in turn, are anticipated to have driven growth in Digital Media ARR in the to-be-reported quarter.
The company’s net new ARR in the Digital Media segment is projected to be $460 million for the quarter under review.
Zacks Rank & Another Stock to Consider
Currently, Adobe carries a Zacks Rank #2 (Buy).
Another top-ranked stock in the broader technology sector is PayPal (PYPL - Free Report) , which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of PayPal have gained 12.1% in the year-to-date period. The long-term earnings growth rate for PYPL is 15.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.