Adobe's Q3 earnings expected to benefit from Digital Media segment growth

From Nasdaq: 2024-09-11 12:27:00

Adobe is set to release its third-quarter fiscal 2024 results on September 12, with a focus on the strength of its Digital Media segment. In the second quarter of fiscal 2024, the segment generated $3.91 billion in revenue, showing an 11% year-over-year growth. For the third quarter, Adobe expects Digital Media revenues between $3.95-$3.98 billion, with the Zacks Consensus Estimate at $3.968 billion.

The Digital Media segment’s growth in the third quarter is expected to be driven by the momentum across Adobe Creative Cloud and Document Cloud. Integration of generative AI capabilities into products like Photoshop and Illustrator is anticipated to have a positive impact. The strong performance of Creative Cloud All Apps subscription and Adobe Stock are also contributing factors. Collaborations with Microsoft and Alphabet have been beneficial for Document Cloud, with growing demand for PDF collaboration services and Adobe Scan.

Adobe carries a Zacks Rank #2 (Buy) and another strong pick in the technology sector is PayPal, which boasts a Zacks Rank #1 (Strong Buy). Adobe’s net new ARR in the Digital Media segment is projected to be $460 million for the quarter under review. Positive traction across various Adobe products and partnerships are expected to influence the company’s performance and revenue growth in the upcoming quarter.



Read more at Nasdaq: Will Adobe’s (ADBE) Q3 Earnings Gain From Digital Media?