Adobe said it repurchased 1.9 million shares in the quarter.
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Adobe posted better-than-expected results late Tuesday for its fiscal first quarter ended March 5, and raised its guidance for the fiscal year ending in November 2021.
The creative software company also announced that Chief Financial Officer John Murphy plans to retire this year to spend more time focused on family, friends, and philanthropy. Adobe (ticker: ADBE) said Murphy will stay to ensure an orderly transition to his successor.
The company said it would be conducting a search and evaluating both internal and external candidates. Murphy joined Adobe in 2017, after holding senior financial roles at Experian (EXPN.UK), DirecTV, and Qualcomm (QCOM).
For the quarter, Adobe reported revenue of $3.91 billion, up 26% from a year ago and ahead of the company’s projection of $3.76 billion. Non-GAAP profits were $3.14 a share, ahead of the company’s guidance at $2.78 a share. On a GAAP basis, the company earned $2.61 a share, up 33% from a year earlier.
Adobe said Digital Media segment revenue was $2.86 billion, up 32%. That includes creative revenue of $2.38 billion, up 31%, and Document Cloud revenue of $480 million, up 37%. Digital Experience segment revenue was $934 million, up 24%.
Adobe said it repurchased 1.9 million shares in the quarter for about $888 million. The company last quarter had announced a new $15 billion stock buyback plan.
For the second quarter, Adobe sees revenue of $3.72 billion, with non-GAAP profits of $2.81 a share, ahead of the former Street consensus at $3.70 billion and $2.70 a share. The outlook includes expected growth of 21% in Digital Media and 18% in Digital Experience.
For the full year, the company now sees revenue of $15.45 billion, up from a previous forecast of $15.15 billion, with non-GAAP profits of $11.85 a share, up from $11.20.
“Adobe drove record Q1 revenue and we are raising our annual targets based on the tremendous opportunity across our business and our continued confidence in our global execution,” CEO Shantanu Narayen said in a statement.
In an interview with Barron’s, the 52-year-old Murphy said he’s suffered some “unfortunate family losses” over the last couple of years, and that after a successful career, has decided to focus on causes that will have an impact on other people. Murphy said he has particular interests in education and job creation for inner-city youth, and for architectural preservation.
On Adobe’s performance, Murphy said that the quarter was “outstanding,” even with an extra week compared with the year-ago period, with accelerating growth from the fiscal fourth quarter adjusting for the extra week. He said Adobe’s business has benefited from the pandemic, with an acceleration in adoption of digital tools to create, share, and collaborate on content.
“People are accelerating their transformation to digital,” he said, adding that Adobe expects the trend to continue in a post-Covid environment.
Adobe shares are down 1.9%, at $451.43, in recent trading. The S&P 500 is up 0.3%.
Write to Eric J. Savitz at [email protected]
