Adobe Did Good – And Stock Is Headed To A Record High - Apple (NASDAQ:AAPL), Adobe (NASDAQ:ADBE)

Adobe Inc ADBE just rounded out its fiscal year after the bell on Thursday showing it managed to maintain its revenue gains during its fourth quarter that ended on November 29 and posting slightly better than expected results. The software company's shares went up toward record highs in late trading, increasing over 2% after hours.

Fourth Quarter Results

The provider of digital and creative software achieved revenue of $2.99 billion which is a 29% year-over-year increase. This result is also slightly above both the sales guidance and Wall Street estimate that was $2.97 billion. And more importantly, sales are up 21.4% from the comparable quarter of the previous fiscal year. Moreover, digital media segment revenue increased 22% year-over-year, resulting to $2.08 billion. Additionally, Digital Experience segment revenue was $859 million.

Earnings amounted to 851.9 million, or $1.76 a share, but after adjusting for stock-based compensation and other factors, earnings amounted to $2.29 a share. Net income amounted to $851 million. Only deferred revenue fell short at $3.38 billion as opposed to the $3.64 billion expected.

Full Fiscal Year 2020

Annual revenue has topped $11 billion, amounting 11.17 billion exceeding analyst estimates of $11.15 billion. Digital Media unit revenue was $7.71 billion for the year whereas Digital Experience segment resulted in $3.21 billion. Earnings of $7.87 per share also surpassed estimated $7.84.

Competitive Landscape

At the professional level, it can be said it is a monopoly, dominating the multimedia software industry, just like Google still dominates the search engine landscape. But there are many indirect competitors that are well-known players ready to serve executives. Experts can also turn to Microsoft Corporation MSFT and Apple Inc AAPL in designing their offerings.

There's also Salesforce CRM which is building networks with pretty much anyone and Oracle Corporation ORCL whose stock just dropped as its revenue fell short. It can be said that Adobe is its own greatest enemy as despite not having a direct competitor, it will surely suffer if it doesn't continue to develop to maintain its competitive offering as everyone is embracing the quick pace of technological revolution.

Outlook

Adobe management is satisfied because its results broke corporate records both for quarterly and annual revenue, which is not an unusual thing. Demand for mobile offerings as well as overall web traffic have continued to expand. As for the Creative Cloud franchise, 50% of cumulative subscribers are new so Adobe is attracting new customers, keeping its market share strong.

For the first quarter of the fiscal year, analysts estimate earnings of $2.23 a share with revenue of $3.09 billion and the Photoshop maker responded with the same guidance on earnings and $3.04 billion in revenue.

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