Adobe Systems, Inc. (NASDAQ: ADBE)
ADBE is set to report its second quarter 2016 financial results this evening and the consensus is for earnings of $0.68 per share on revenues of $1.4 billion. ADBE has a great technical setup for a strong move higher if the earnings report comes in strong and the volume follows. If ADBE can push through the $100 level on high relative volume, it can trigger an explosive move to the upside out of the current macro wedge it sits within. Traders and investors alike will have ADBE on their watch coming into tomorrow’s session for a profitable trading opportunity. Let’s take a look at what the analysts expect into the report.
ADBE Analyst Expectations
Analysts at Credit Suisse had the following comments yesterday on ADBE into tonight’s earnings report.
Expect in line/Above F2Q16 revenue / EPS. We expect ADBE to post F2Q total revenue in line to above CS/Street ests. of $1.408B (+21.2%)/$1.404B (+20.8%) and at the high-end of guidance $1.365-1.415B (+17.5-21.8%). We model Digital Media revenue of $949.1M (+27.0%) driven by Creative revenue of $749.6M (+36.1%) and Document revenue of $199.5M (+1.5%). In addition, we model Digital Marketing revenue of $412.6M (+12.6%), which includes our Marketing Cloud est. of $384.0M (+17.6%). We model OpM of 31.9%, modestly below Street of 32.2%, and EPS of $0.68, in line with Street and at the high-end of $0.64-0.70 guidance. ARR in Focus. Given mgmt’s decision to no longer provide qtrly Creative Cloud subscriber data, we believe there will be increased investor focus on ARR and mgmt’s commentary around specific ARR drivers. We model Digital Media ARR of $3.403B (+44.5% yr/yr and +8.8% q/q), which implies incremental qtrly ARR of $275M (+4.3% yr/yr), in line with guidance. We model Creative ARR of $2.969B (+46.5%) driven by continued Creative Cloud net subscriber growth as well as blended ARPU uplift from increased uptake of add-on services and greater renewals on non-promotional pricing.
About Adobe Systems, Inc.
Adobe Systems Incorporated, incorporated on May 9, 1997, is a software company. The Company offers a line of products and services used by professionals, marketers, knowledge workers, application developers, enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling content and experiences across multiple operating systems, devices and media. The Company operates through three segments: Digital Media, Digital Marketing, and Print and Publishing. The Company markets and licenses its products and services directly to enterprise customers through its sales force and to end users through application stores and its own Website at www.adobe.com. It offers various products through a software-as-a-service (SaaS) model or a managed services model (both of which are referred to as a hosted or cloud-based model), as well as through term subscription and pay-per-use models. – Reuters