The Future of Adobe: What to Expect from Q1 2024 Earnings Report
Key Takeaways
- Adobe is set to announce its first-quarter earnings for 2024 after the bell Thursday.
- Analysts expect earnings and revenue to rise from the prior quarter and year-ago period, in line with the company’s guidance.
- Adobe will also report revenue for its Digital Media segment, with analysts anticipating double-digit growth.
- The company could provide details about how it is positioned to gain from artificial intelligence with Adobe Firefly tech as well.
Adobe (ADBE) is gearing up to reveal its first-quarter earnings for the 2024 fiscal year after the bell on Thursday. Analysts are eagerly awaiting this report, expecting to see double-digit growth in Adobe’s Digital Media segment and hoping for additional insights into potential gains from artificial intelligence (AI).
Analysts have projected Adobe’s revenue to reach $5.14 billion for the first quarter of fiscal 2024, showing an increase from both the previous quarter and the year-ago period. Net income is expected to rise to $2 billion, up from $1.75 billion in the fiscal first quarter of 2023. Diluted earnings per share (EPS) are also anticipated to climb to $4.37, compared to $3.80 in the same period a year earlier. These figures align with the company’s guidance for the quarter.
| Analyst Estimates for Q1 FY 2024 | Q4 FY 2023 | Q1 FY 2023 | |
| Revenue | $5.14 billion | $5.05 billion | $4.66 billion |
| Diluted EPS | $4.37 | $4.27 | $3.80 |
| Net Income | $2 billion | $1.96 billion | $1.75 billion |
Key Metrics: Digital Media Revenue Growth
In the fourth quarter, Adobe’s Digital Media segment generated $3.72 billion in revenue, marking a 13% year-over-year growth. Jefferies analysts anticipate that the revenue for the Digital Media segment in the first quarter of 2024 could reach $3.79 billion, reflecting an 11.5% year-over-year growth rate, continuing the positive streak from the previous quarter. The analysts attribute this growth to increased website traffic and content creation activity.
Business Spotlight: AI Impact
Apart from financial performance, Adobe is expected to shed light on how it can leverage the AI boom to its advantage. Adobe Firefly, a suite of generative AI (GenAI) models, aims to enhance creativity and accelerate workflows in Adobe products. By providing users with a creative co-pilot, Adobe Firefly streamlines ideation, exploration, and production processes.
Adobe Firefly integrates GenAI technology into various Adobe products, including Creative Cloud and Adobe Acrobat, positioning Adobe as a strong competitor in AI image generation alongside Microsoft-backed OpenAI’s DALL-E. Jefferies analysts anticipate that as Adobe shares more details on its video AI roadmap, the company’s stock is likely to rebound, with positive metrics on Firefly AI adoption contributing to its success.
As investors eagerly await Adobe’s earnings release, the company’s shares have remained relatively stable for 2024, showing a minor decline of 0.2% year-to-date as of Tuesday’s close. However, over the past year, Adobe’s stock has surged by more than 78%, reflecting strong investor confidence in the company’s future prospects.
In conclusion, Adobe’s upcoming earnings report for Q1 2024 is highly anticipated by analysts and investors alike. With expectations of robust financial performance and insights into AI-driven innovations like Adobe Firefly, the company is poised for continued growth and success in the evolving digital landscape.
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