Adobe's Revenue up 14% YoY to $4.39 Billion in Q2

Adobe Inc. (ADBE) reported yesterday after the closing bell that its Q2 2022 revenue increased by 14% on an annual basis to $4.39 billion, beating consensus forecast of $4.35 billion. Its operating income was $1.53 billion in the second trimester, marking an annual growth of 9.2%, while its net income stood at $1.18 billion, which is 5.3% up compared to the same period last year. For the period ended June 3, Adobe (ADBE) earned $3.35 a share, excluding one-time items, which topped analysts' expectations for a net profit of $3.31 a share, excluding one-time items.

Cash flows from operations rose to $2.04 billion.

In operating segments, Digital media revenue rose to $3.20 billion, up 15% YoY. Revenue from the Creative division advanced to $2.61 billion, up 12% YoY. Document Cloud's revenue was $595 million, up 27% YoY.

Annual recurring digital media revenue (ARR) increased $464 million in the quarter to $12.95 billion at the end of the quarter. Creative ARR rose to $10.82 billion and Document Cloud ARR to $2.13 billion.

Digital Experience segment revenue of $1.10 billion, up 17% YoY. Digital Experience subscription revenue was $961 million, up 18% YoY. Adobe repurchased approximately 1.9 million shares during the quarter.

Also, Adobe said that for Q3, it expects to earn $3.33 a share, excluding one-time items, on revenue of $4.43 billion, while analysts had earlier forecast Adobe to earn $3.40 a share on $4.51 billion in revenue for the three-month period.

The company cited several factors as impacting its outlook, including "summer seasonality", a foreign exchange "headwind" of $175 million that will be spread across Adobe's Q3 and Q4, and the decision to cease all new sales in Russia and Belarus due to the geopolitical situation.

"Adobe achieved record Q2 revenue with strong demand across Creative Cloud, Document Cloud and Experience Cloud," Adobe CEO Shantanu Narayen noted. The company's CFO Dan Durn added that Adobe's "operating model continues to fuel consistent growth, enabling the company to invest in category-leading cloud solutions and emerging innovations that are gaining traction in the marketplace."

Key takeaway: Adobe posted record Q2 revenue driven by strong demand for Creative Cloud, Document Cloud, and Experience Cloud products. Operating cash flows exceeded $2 billion, demonstrating the strength of growing revenue and Adobe's financial discipline. The company continues to invest in best-in-class cloud solutions and new innovations that are gaining popularity in the market.

Following the release of the report, Adobe's shares fell 4.41% in after-hours trading due to external market factors.