Adobe Shares Drop As Q1, FY22 Outlook Trail Estimates

Adobe Inc ADBE reported fourth-quarter FY21 revenue growth of 20% year-on-year to $4.11 billion, beating the consensus of $4.09 billion.

• Revenue for the Digital Media segment was $3.01 billion, up 21% Y/Y. Creative revenue grew 19% Y/Y to $2.48 billion, while Document Cloud revenue rose 29% to $532 million.
• Digital Experience segment revenue was $1.01 billion, up 23% Y/Y. Digital Experience subscription revenue was $886 million, up 27% Y/Y.
• Digital Media Annualized Recurring Revenue rose $571 million Q/Q to $12.24 billion exiting the quarter. Creative ARR grew to $10.30 billion, while Document Cloud ARR grew to $1.93 billion.
• Adobe generated $2.1 billion in operating cash flow and held $5.8 billion in cash and equivalents.
• Non-GAAP EPS of $3.20 was in-line with the consensus.
• "Adobe's vision, category leadership, ground-breaking technology, and large and loyal customer base position us well for fiscal 2022 and beyond," Chair and CEO Shantanu Narayen said.
• "With an estimated $205 billion addressable market, we are well-positioned for significant growth in the years ahead with our industry-leading products and platforms," CFO Dan Durn said. 
• Outlook: Adobe sees Q1 FY22 revenue of $4.23 billion, below the consensus of $4.34 billion. It sees non-GAAP EPS of $3.35, missing the consensus of $3.38.
• Adobe sees FY22 revenue of $17.9 billion, below the consensus of $18.2 billion. It sees non-GAAP EPS of $13.70, missing the consensus of $14.26.
• Price Action: ADBE shares traded lower by 8.60% at $576.13 in the premarket session on the last check Thursday.