Adobe Earnings Preview: Why Guidance Matters a Lot More Than Quarterly Numbers
Ali Merchant | Mar 12, 2025 16:21
Adobe (NASDAQ:ADBE) continues to be a major player in the creative software industry, benefiting from its key segments of Creative, Document, and Experience Cloud. With a high gross profit margin of 89.04% and steady revenue growth, such as the recent 11% year-over-year increase in quarterly revenue to $5.41 billion.
The Creative Cloud segment is particularly significant, contributing $3.19 billion despite experiencing slower growth with a modest 3% increase in net new ARR year-over-year.
Key Highlights:
- Adobe introduced the Firefly application on February 12, 2025, marking a significant advancement in its AI offerings. With capabilities for AI-powered video, image, and vector generation, this application is designed to enhance commercial safe content creation.
- Firefly pricing starts at $9.99 for 20 clips per month and $29.99 for 70 clips per month, competing with OpenAI's $20 plan for 50 lower-resolution videos.
- The company launched Photoshop on iPhone on February 25, 2025, with Android version planned for later in 2025.
- Also announced general availability of RealTime CDP Collaboration in the U.S. on February 20, 2025, enabling advertisers and publishers to work with first-party data in a privacy-focused environment.
Morgan Stanley (NYSE:MS) maintains an Overweight rating on Adobe, highlighting Firefly Video's new tiered pricing model as a key catalyst.
Source: InvestingPro
ADBE Q1 2025 earnings at 4:05 pm ET Wednesday March 12, 2025
- 47 beats since Q 2012
- 1 Miss
Analyst Ratings:
Earnings Expectation:
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Financial Health History
Financial Health for Palo Alto Networks is determined by ranking the company on over 100 factors against companies in the Information Technology sector and operating in Developed economic markets.
Source: InvestingPro
Option Statistics:
Put/Call ratio suggests the following three scenarios:
- With Put/Call ratio between 0.4043 to 1.1616 for the next four upcoming expiries suggest that the overall option traders’ position is cautious and more inclined to Puts.
- Lower earnings and guidance could trigger a sharp sell-off.
- Better than expected guidance would trigger a gradual rally.
Technical Analysis Perspective:
- ADBE penetrated a rising support of a large triangle like formation in December 2024 after Q4 earnings.
- Prices rebounded after hitting close to 400 level in January 2025.
- Prices are hovering inside a small parallel channel which is the face of a bearish flag.
- A bearish flag is a continuation pattern within an established bearish trend acting as a pause before another dip lower.
- The downside target of bearish flag is between 280/275 base provided 430/425 breaks decisively.
Weekly Candlestick Chart
ADBE Seasonality Chart:
- ADBE closes 3.5% higher in March, 61% of the time since 2008.
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Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, Fund & Relationship Management, Fintech, and Digitalization. He is a CMT charter holder and an active member of CMT Association, USA, American Association of Professional Technical Analysts, and CMT Association of Canada. He has worked on various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters Refinitiv, MAK Allen & Day Capital Partners (WA:CPAP), and Bridge Information Systems.
He is the founder of TwT Learnings, provides financial market training. Follow us on “X” formerly Twitter “@twtlearning.”
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