Image: Adobe’s stock has been choppy the past few years.
By Brian Nelson, CFA
Adobe Inc. (ADBE) recently reported strong second quarter fiscal 2025 results. The company posted record revenue of $5.87 billion in the fiscal second quarter, representing 11% year-over-year growth in reported and in constant currency and better than the consensus forecast of $5.8 billion. Non-GAAP operating income was $2.67 billion, up from $2.44 billion in last year’s quarter, while non-GAAP net income was $2.17 billion, up from $2.02 billion in the same period a year ago. On a non-GAAP basis, diluted earnings per share was $5.06 versus $4.48 per share in last year’s period and better than the consensus forecast of $4.97 per share.
Management had the following to say about the results:
Our strategy to deliver ground-breaking innovation for Business Professionals and Consumers, and Creative and Marketing Professionals is delighting customers and we are pleased to raise Adobe’s FY25 revenue target. Adobe’s AI innovation is transforming industries enabling individuals and enterprises to achieve unprecedented levels of creativity.
As a result of us driving strong performance in the first half of the year, we are pleased to raise Adobe’s FY25 total revenue and EPS targets. We continue to invest in AI innovation across our customer groups to enhance value realization and expand the universe of customers we serve.
Adobe’s cash flow from operations was $2.19 billion in the fiscal second quarter, and the firm exited the period with $19.69 billion Remaining Performance Obligations (RPO), with current accounting for 67% of them. During the quarter, Adobe repurchased approximately 8.6 million shares. Looking to all of fiscal year 2025, total revenue is targeted in the range of $23.5-$23.6 billion, better than the consensus estimate of $23.45 billion, while non-GAAP earnings per share is expected in the range of $20.50-$20.70 versus consensus of $20.36. We like Adobe’s fundamentals, but don’t include shares in any newsletter portfolio.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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