ADBE Q1 2023 Earnings

Call Details

• Call Title: Adobe Q1 2023 Earnings Call
• Date: March 15, 2023 at 9:00 PM UTC
• Management Team:
  • Jonathan Voss (VP of Investor Relations)
  • Shantanu Narayen (Chairman and CEO)
  • David Wadhwani (President of Digital Media)
  • Anil Chakravarthy (President of Digital Experience)
  • Dan Dern (Executive Vice President and CFO)

Call Summary

Financial Performance

• Total revenue was $4.66B for Q1 FY23, which management reported as 13% year-over-year growth in constant currency.
• GAAP diluted earnings per share for the quarter were $2.71, and non-GAAP diluted earnings per share were $3.80.
• Digital Media revenue was $3.40B, reported as 9% year-over-year growth on a GAAP basis and 14% in constant currency.
• Creative revenue was $2.76B, reported as 8% year-over-year growth on a GAAP basis and 13% in constant currency, with net new creative ARR of $307M in the quarter.
• Document Cloud revenue was $634M, reported as 13% year-over-year growth on a GAAP basis and 16% in constant currency, with net new Document Cloud ARR of $103M and ending ARR growing 22% year-over-year in constant currency.
• Digital Experience revenue was $1.18B, with subscription revenue of $1.04B, reported as double-digit year-over-year growth (management cited 12%–14% depending on speaker and currency context).
• Remaining balance sheet and liquidity metrics included cash and short-term investments of $5.65B and cash flows from operations of $1.69B for the quarter.
• Reported RPO exiting the quarter was $15.21B, and ending digital media ARR was $13.67B as disclosed on the call.

Guidance

• For Q2 FY23, the company guided Total Adobe revenue of $4.75B to $4.78B.
• Q2 digital media net new ARR was targeted at approximately $420M and Q2 digital media segment revenue was targeted at $3.45B to $3.47B.
• Q2 digital experience revenue was guided to $1.21B to $1.23B, with digital experience subscription revenue guided to $1.06B to $1.08B.
• Q2 tax guidance was approximately 21.5% GAAP and 18.5% non-GAAP, with GAAP EPS guided to $2.65 to $2.70 and non-GAAP EPS guided to $3.75 to $3.80.
• Fiscal 2023 targets were raised to digital media net new ARR of approximately $1.70B and to GAAP EPS of $10.85 to $11.15 and non-GAAP EPS of $15.30 to $15.60.
• Management stated there was no change to the underlying macro assumptions that were used when annual guidance was originally set.