Adobe Tops Q3 Estimates; Reports to Buy Marketo

Adobe Systems Incorporated (NASDAQ: ADBE) reported its third quarter financial results for the fiscal year after the closing bell on Thursday. The Company topped estimates in both revenue and earnings, sending shares 3% higher on Friday morning.

For the third quarter, Adobe reported a record quarterly revenue of USD 2.29 Billion, growing 24% year over year and surpassing estimates of USD 2.25 Billion. The Company reported an EPS of USD 1.73, beating estimates by USD 4 cents.

Adobe’s Digital Media segment reported revenue of USD 1.61 Billion, with Creative revenue growing to USD 1.36 Billion and Document Cloud achieving record revenue of USD 249 Million, growing 21% year over year. Digital Experience segment reported revenue of USD 614 Million or 21% year over year, while its subscription revenue grew 25% year over year.

Digital Media Annualized Recurring Revenue (ARR) grew to USD 6.4 Billion. Creative AAR to USD 5.66 Billion, while Document Cloud ARR grew to USD 744 Million.

It was also reported that Adobe was in talks to acquire private software company, Marketo, according to CNBC, citing sources familiar with the matter.

The deal will allow Adobe to bolster its cloud-based software offerings to compete against larger players like Microsoft (NASDAQ: MSFT) and Oracle (NYSE: ORCL). Marketo’s business will also boost Adobe’s marketing business.

Private equity firm Vista Equity Partners Management LLC took Market private two years for USD 1.8 Billion. It is reported that Adobe is expected to pay significantly more than that if a deal is reached, according to the sources.

However, the sources said there is no certainty that talks between the two will lead to a deal. Adobe and Vista declined to respond to comments on the matter, while Marketo did not respond to the matter.

4 Comments
  1. Eric Jackson 1 year ago
    Reply

    $ADBE up nearly 3% after last night’s earnings

  2. Gamster 1 year ago
    Reply

    $ADBE holding strong despite market

    • Zia Marcus 1 year ago
      Reply

      $ADBE – One of the mega-cap super software #stocks. Not to mention, on a new all-time high after earnings.

    • Eben Williams 1 year ago
      Reply

      However some companies like $ADBE have managed to grow impressively and still buy back their stock. $CRM returns have still been terrific though despite share issuance

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