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Adobe (ADBE) shares are getting an initial lift in Thursday's extended hours right after releasing fiscal second quarter results, posting revenue of $5.87 billion (vs. estimates of $5.8 billion) and adjusted earnings per share of $5.06 (vs. estimates of $4.98 per share).
Julie Hyman and Josh Lipton dive into the creative software company's earnings print, as the company outdid Wall Street's third quarter revenue and earnings forecasts, and Adobe's AI investment affirmations.
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Let's turn to Adobe because those second quarter results are just hitting the wires now. So we're looking at Q2 adjust EPS comes in at 506. The street was at 498, so that's a beat. Uh, top line Q2 revenue 5.87 billion. The street was at $5.8 billion. Now let's turn ahead to what do they see for Q3? They're calling for Q3.GPS between 5:15 to 520. She was at 511 and Q3 revenue. It looks like they're calling for between $5.88 billion to $5.93 billion. Street was closer to 5.88 billion. The stock popping here, at least initially in the after hours. Julie,
yeah, Shenan Norayan, the CEO of the company, saying in the statement.That the AI innovation is transforming industries, um, of course, you know, AI, everybody's talking about AI the concern, of course with Adobe has been that AI would be more of a competitor than it would be um something that would help the company, but this raised forecast perhaps shows that's not the case right now. Um, the CFO saying that as a result of that strong performance in the first half, that's why they're raising the.Revenue and EPS targets for the full year and he said we continue to invest in AI innovation across our customer groups to enhance value realization and expand the universe of customers we serve.
Yeah, and poorly the stock, you know, now we're actually coming back down to earth you're up about 1%, um, heading into this print, you know, it has been rough to be long this stock. I mean if you're in this name heading into this print, the stock was in the red this year.In the red over the past 12 months, uh, concern, as you point out, Julie has been Gen AI and the increasing competition there and what Adobe's role could look like, how Adobe could be disrupted. We do have spoken though to some very smart bulls on the show, Julie, who have made the case and pound on the table that, um, this one's one to own that Adobe customers one argument you have to make is that Adobe customers use tools to.Tools to edit videos, not so much create videos. The point being that they still think Adobe has an important place here in that sort of broader creative technology market.
Yeah, and just there are two main segments here. There's the digital media segment and the digital experience segment here. I'm just looking to see here what we saw in terms of in terms of numbers. It looks like subscription revenue.In two other groups, business professionals and consumers, subscription revenue up 15%, creative and marketing professionals subscription revenue up 10%. Um, so seeing growth in both those areas, digital media, uh, revenue up 11%, and digital experience revenue up 10% as well. So you know, seeing that low double digit growth for both of thosesegments
about 1% right now in the after hours.