Adobe Q2 Results Beat Estimates, But Guidance Disappoints

Adobe Inc.(NASDAQ:ADBE) reported its Q2 results, with EPS coming in at $3.35, beating the Street estimate of $3.31. Revenue was $4.39 billion, better than the Street estimate of $4.34 billion.

However, the good results were offset by soft guidance. For Q3, the company expects EPS of $3.33, compared to the Street estimate of $3.40, and revenue of $4.43 billion, compared to the Street estimate of $4.51 billion.

Full 2022 year, EPS is expected to be $13.50, worse than the Street estimate of $13.66, and revenue to be $17.65 billion, compared to the Street estimate of $17.85 billion. Positively, the company is sustaining a high operating margin and increasing cash flow trajectory and expects strength in Q4.

According to the analyst at Oppenheimer, the company’s shares may remain under pressure near term given an inconsistent execution trend in the reported results, and until investors can gain comfort that the expected declines in Q3 net new Digital Media ARR and the operating margin are transitional, and EPS growth can return to growing faster than revenue. The analysts lowered their price target to $400 from $560, while maintaining their outperform rating.