ADBE Q3 2023 Earnings

Call Details

• Call Title: Adobe Q3 2023 Earnings Call
• Date: September 14, 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

• Adobe reported revenue of $4.89 billion for Q3 FY2023, representing 13% year-over-year growth.
• GAAP diluted earnings per share for the quarter were $3.05, which increased 26% year-over-year, and non-GAAP diluted EPS were $4.09, which increased 20% year-over-year.
• Digital Media revenue was $3.59 billion for the quarter, which the company reported as 14% year-over-year growth in prepared remarks.
• Digital Experience revenue was $1.23 billion in Q3, representing 11% year-over-year growth as stated on the call.
• Document Cloud revenue was $685 million for the quarter, cited as 15% year-over-year growth in remarks.
• Operating cash flows for the quarter were $1.87 billion and ending cash and short-term investments were $7.52 billion.
• Remaining repurchase capacity under the December 2020 authorization was $3.15 billion after repurchasing approximately 2.1 million shares during the quarter.

Guidance

• Q4 revenue guidance was provided at $4.975 billion to $5.025 billion for total company revenue.
• The company is targeting digital media net new ARR of approximately $520 million in Q4.
• Q4 digital media revenue guidance was given at $3.67 billion to $3.70 billion, and digital experience revenue guidance was $1.25 billion to $1.27 billion.
• Digital experience subscription revenue guidance for Q4 was $1.11 billion to $1.13 billion.
• The company communicated GAAP EPS guidance of $3.10 to $3.15 and non-GAAP EPS guidance of $4.10 to $4.15 for Q4.
• The company indicated an approximate GAAP tax rate of 18% and non-GAAP tax rate of 18.5% for Q4.
• CFO stated that the Q4 implicit operating margin profile is around the mid-40s, with an example point of roughly 45.5% mentioned as the ballpark.