Adobe posts solid revenues. Why it was not enough to increase the stock.

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Adobe

Fiscal third quarter earnings and sales exceeded expectations, but the results were not enough to drive shares higher amid the extended trading.

For the quarter ended September 3,

Adobe

(ticker: ADBE) reported revenue of $ 3.94 billion, up 22% year-over-year. It was a quarterly sales record for the creative software company, beating the Wall Street consensus estimate of $ 3.89 billion, according to FactSet. Non-GAAP earnings of $ 3.11 per share also exceeded consensus estimates at $ 3.01 per share.

But Adobe shares have risen more than 40% in the past six months after a string of better-than-expected quarters. Better than consensus results may have already been factored into the stock. The stock was down 3.6% to $ 622.68 in after-hours trading after the report.

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“Adobe had another exceptional quarter as Creative Cloud, Document Cloud and Experience Cloud continue to transform storytelling, learning and doing business in a digitally driven world,” CEO Shantanu Narayen said in the statement results.

CFO John Murphy, who in March announced his intention to retire later in 2021, said Barron that the home work environment has helped accelerate the shift from paper documents to digital documents which continues.

Murphy was particularly pleased with sales in the Digital Experience segment, which jumped 26% to $ 985 million. “It was just a phenomenal performance and went beyond what we guided,” he said.

Revenue in the digital media segment grew 23% year-over-year to $ 2.87 billion. This includes Creative segment revenue of $ 2.37 billion, up 21% from the prior year quarter, and Document Cloud revenue of $ 493 million, up 31% from a year earlier. year over year.

For the fiscal fourth quarter, the company’s targets include revenue of $ 4.07 billion and non-GAAP earnings of $ 3.18 per share. Both numbers were ahead of Wall Street’s consensus estimate before the release, according to FactSet.

“We are a unique company in that, given our size, we are able to continue to generate the level of growth that we can, but also to do so in a profitable manner,” said Murphy. “We have some of the best margins in the business, if not the best in the business, and that gives us a lot of flexibility in how we drive growth, both organic and inorganic. “

Write to Connor Smith at [email protected]