Adobe Affirms Sales Forecast on Steady Demand for Design Software | Tech News

Adobe Affirms Sales Forecast on Steady Demand for Design Software

Adobe Inc. affirmed its annual revenue forecast, signaling it’s seeing steady demand for creative design and analytics software despite the uncertain economy.

By:BLOOMBERG
| Updated on: Dec 16 2022, 19:21 IST
Adobe
Adobe affirms sales forecast on steady demand for design software. (REUTERS)

Adobe Inc. affirmed its annual revenue forecast, signaling it's seeing steady demand for creative design and analytics software despite the uncertain economy. The shares gained about 6% in extended trading.

The company also said it expects to complete its $20 billion purchase of Figma Inc. next year, despite regulatory review in the US, UK and Europe.

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Revenue will be about $19.2 billion in fiscal 2023, which began this month. Profit, excluding some items, will be $15.15 to $15.45 a share, the company said Thursday in a statement. The forecast, as well as the sales outlook for Adobe's divisions, was the same as the company's previous guidance given in October. Adobe's forecast doesn't include any contribution from Figma.

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“Strong demand for our offerings, industry-leading innovation and track record of top- and bottom-line growth set us up to capture the massive opportunities in 2023 and beyond,” Chief Financial Officer Dan Durn said in the statement.

Adobe, which has dominated the software market for design professionals, is seeking to expand its user base to more casual consumers with its proposed acquisition of Figma, announced in September. The deal would be one of the most-expensive purchases ever of a private software maker.

The company said it also expects European Union regulators will review the deal, according to a transcript of remarks prepared for a conference call later Thursday.

“Overall the regulatory process is proceeding as expected,” David Wadhwani, Adobe's president of digital media, said according to the transcript. “We continue to feel positive about the facts underlying the transaction and expect to receive approval to close the transaction in 2023.”

Despite concerns about the price, the Figma acquisition should support “Adobe's leading position in digital creation and marketing,” Brian Schwartz, an analyst at Oppenheimer, said ahead of earnings.

The shares jumped to a high of $350.93 in extended trading after closing at $328.71 in New York. The stock has tumbled 42% this year as investors have soured on most software companies.

What Bloomberg Intelligence Says:

Adobe's fiscal 2023 guidance calls for the Digital Media segment to grow 13% in constant currency, or 9% after accounting for FX headwinds, affirming our view that growth in the Creative Cloud unit is easing. Though total sales guidance was slightly below consensus, adjusted EPS view for the full year indicates that margin may not come under much pressure next year, which is an encouraging sign.

— Anurag Rana and Andrew Girard

Revenue increased 10% to $4.53 billion in the fiscal fourth quarter, in line with estimates. Profit, excluding some items, was $3.60 a share in the period ended Dec. 2. Analysts, on average, projected $3.50. Adobe has avoided major job cuts like those announced by many tech companies, including Meta Platforms Inc. and Amazon. com Inc., but last week eliminated about 100 positions concentrated in sales.

Sales in digital media, the division that includes Photoshop and other signature software, increased 10% to $3.3 billion in quarter. Revenue in the digital experience unit, which includes analytics and marketing, rose 14% to $1.15 billion.

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First Published Date: 16 Dec, 19:21 IST
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