Adobe Saw Continued Momentum In Its Creative Cloud, Says Deutsche Bank

The analysts noted Adobe reported solid second-quarter results with revenue/EPS of $1.40 billion/$0.71, versus estimations of $1.40 billion/$0.68, as digital media ARR grew roughly 45 percent year-over-year. The brokerage believes that the results were "helped in part by strength in ETLA renewals driving an increase in enterprise creative cloud ARPU, with deferred revenue growing 37 percent year-over-year."

In a research note to clients, Deutsche Bank said, "Management reaffirmed FY16 (expecting to come in at the higher end) and other long term targets unchanged from the October analyst day: total revenue CAGR of ~20 percent along with EPS growth of ~30 percent. We see ADBE continuing to outperform with an expanded product suite and improving competitive position in an expanding TAM."

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The brokerage pointed out that "creative cloud revenue grew 37 percent year-over-year on an expanded suite that no included a growing catalog of images and video in Stock." The three analysts said, "Marketing cloud grew 18 percent year-over-year in the second quarter, but is expected to grow a more modest 7 percent in the third quarter adjusting for perpetual licenses in the year."

The analysts think MC is still expected to deliver 20 percent year-over-year growth this year and bookings commentary remains upbeat." According to them, "Document cloud is now over $400 million in ARR, growing rapidly off a smaller base than CC or MC."

At time of writing, Adobe was down 5.07 percent on the day at $94.67.