Adobe Shares Surge 17% After Strong Q2 Earnings Beat Estimates

Jun 14, 2024, 03:33 AM

Adobe Inc. reported strong second-quarter earnings, surpassing Wall Street expectations and driving a significant increase in its stock price. The company posted quarterly revenue of $5.31 billion, slightly above the estimated $5.29 billion, and an earnings per share (EPS) of $4.48, exceeding the consensus estimate of $4.09. Following the release of these results, Adobe's shares surged by 17% in after-hours trading. The company also raised its full-year revenue forecast to a range of $21.40 billion to $21.50 billion, up from the previous estimate of $21.30 billion to $21.40 billion. Adobe's performance was bolstered by strong demand for its AI-powered tools, which attracted new customers and contributed to the company's growth. The Digital Media net new annual recurring revenue (ARR) beat expectations by 11%, and remaining performance obligations (RPO) increased by 17%. Additionally, Adobe projected third-quarter revenue between $5.33 billion and $5.38 billion, compared to the estimated $5.4 billion. The positive earnings report has led to multiple target price upgrades from analysts, with JPMorgan raising its price target to $580 and Wells Fargo to $700.