Adobe Earnings Preview: Cloud Growth To Continue Unhindered

Cloud & Services IT Asset Management News | 0 comments

by | March 17, 2015

Adobe is set to announce its fiscal Q1 2015 earnings on March 171th. (Fiscal years end with November.) While the company delivered $1.07 billion in revenues in Q4, which was at the high end of its targeted range of $1.0 billion to $1.075 billion, its non-GAAP earnings per share of $0.36 exceeded both its guidance and market expectation. Adobe’s core cloud business continued to deliver results as cloud adoption remained robust across both its Creative offering and marketing solutions. For Q1, we believe the growth trend in cloud adoption continued, which likely drove revenues for both the Creative cloud and marketing divisions. However, we believe revenues from the LiveCycle and Connect business declined as that of the Print and Publishing business remained flat during the quarter.

Outlook For 2015 and Q1

Adoption of cloud services continues to remain strong and the company expects to have nearly 5.9 million paid CC individual and team subscriptions by the end of fiscal 2015. According to our calculations, this means it will need to add over 47,030 paid users per week in FY2015 to meet its objective. The company has also disclosed that it expects to end FY 2015 with over $2.9 billion of digital media Annualized Recurring Revenue at a growth rate of 20% year over year. Furthermore, Adobe expects revenues from its digital marketing cloud to grow by a 25% rate for the year. However, it expects the LiveCycle and Connect business to decline further, while the print and publishing business is expected to remain flat in 2015. The revenue guidance for FY2015 is $4.85 billion, while GAAP EPS and Non-GAAP EPS is expected to be $1.20 and $2.05, respectively.



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