Shares were up Tuesday after the company reported better-than-expected third-quarter earnings, but provided disappointing guidance for the current.
For the quarter ending in August, Adobe (ticker: ADBE) generated revenue of $ 2.3 billion, up 24% from a year earlier, a hair ahead of Wall Street's expectations of $ 2.82 billion, and slightly ahead of the company's own forecast of $ 2.80 billion.
Non-GAAP profit for the quarter was $ 2.25 per share, ahead of both Street & # 39; s view of $ 1.97 and the company's guidance to $ 1.95. Profit under approved accounting principles was $ 1.61 per share, ahead of the $ 1.40 management had asked investors to expect.
The company said revenue from the digital media segment was $ 1.96 billion, up 22% on the previous year. The digital experience segment generated revenue of $ 821 million, up 34%.
Guidance for the fourth quarter was less good than expected. Adobe estimates revenue of $ 2.97 billion in November with a $ 2.25 non-GAAP profit, or $ 1.68 under GAAP. Street consensus has been $ 3.03 billion and $ 2.30 a share in non-GAAP profits.
The company sees growth falling to 20% in the digital media segment and 23% in the digital experience.
"Customers in all industries continue to trust Adobe to run their businesses, transform how they work and bring creative ideas to life as reflected in our record Q3 results," said Adobe CEO Shantanu Narayen in a statement . "We are excited about the opportunities ahead of us and confident in our ability to drive strong top line and bottom line growth."
In prepared remarks for Tuesday afternoon's earnings call, CFO John Murphy said that while revenues were generally strong, subscription orders for the company's Marketo business for the mid-market "did not meet our expectations," and that the company is increasing its focus on demand generation and sales.
He also said there were delays in booking bookings for Analytics Cloud, "with associated shortcomings in consulting service booking and revenue related to the launch of our new Adobe Experience Platform."
Murphy noted that revenue in the August quarter was reduced by about $ 8.5 million of currency factors.
In an interview with Barron & # 39; s, Murphy said the issues are all "completely fixable" and Adobe specific. He added that the company does not see any impact from macro slowness in business.
Adobe bought back 2.6 million shares in the quarter at a cost of around $ 750 million. $ 5.85 billion remains on a $ 8 billion repurchase program approved in May 2018.
Adobe closed up 0.62%, at $ 284.69, on Tuesday.
Write to Eric J. Savitz at email@example.com