Shares of Adobe Inc. (ADBE, Financial) gained 4.51% in extended trading on Tuesday after posting second-quarter results.
Non-GAAP earnings of $1.83 per share beat forecasts by 5 cents, while GAAP earnings per share of $1.29 surpassed estimates by 4 cents.Ă‚
Non-GAAP earnings per share recorded a 10.2% increase from the prior-year quarter, but GAAP earnings fell 3%.
Revenue grew 25% to a record $2.74 billion, topping expectations by $40 million.
By segment, Digital Media sales grew 22% to $1.89 billion and Digital Experience revenue jumped 34% to $784 million.
The San Jose, California-based software company also recorded a 5.7% quarter-over-quarter increase in Digital Media annualized recurring revenue to $7.47 billion. Creative annualized recurring revenue, which made up 87.7% of Digital Media ARR, grew 5.5% to $6.55 billion and Document Cloud ARR, which contributed 12.3%, increased 7.6% to $921 million.
“Adobe's continued momentum is being fueled by the explosion of creativity across the globe and the widespread business transformation agenda to deliver engaging customer experiences,” President and CEO Shantanu Narayen said. “With an innovative technology platform, exciting product roadmap and strong ecosystem of partners, we are well positioned for the second half of FY19 and beyond.”
Operating cash flow was $1.11 billion, up from $976.4 million in the year-ago quarter.
During the quarter, Adobe enacted buyback programs of its own stock, withdrawing approximately 2.5 million shares.
The balance sheet had $3.48 billion in cash on hand and short-term securities and $4.14 billion in total debt as of May 31.
For the third quarter, the company is guiding for non-GAAP earnings of $1.95 per share, which is below analyst estimates of $2.05. Total revenue projections of $2.8 billion are also below expectations of $2.83 billion.
The stock closed at $276.78 on Tuesday for a market capitalization of $135.06 billion. Adobe has gained approximately 22% so far this year. The closing share price was 35.1% above the 52-week low of $204.95 and 5.4% below the 52-week high of $291.71.
Disclosure: I have no positions in any securities mentioned.
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