4Q23 results in line, management guiding for 11% revenue growth in FY24
- Revenue grew 12% y-o-y to US$5.1bn in 4Q23 with Digital Media and Digital Experience continuing to see robust growth
- Non-GAAP earnings per share increased 19% y-o-y to US$4.27, meeting consensus estimates
- Management guides for FY24 revenue growth of 10% (mid-point), in line with market expectations
Revenue increased 12% y-o-y in 4Q23, in line. Digital Media’s revenue increased by 13% y-o-y to US$3.7bn, with revenues from Creative Cloud (e.g. Photoshop and Illustrator) and Document Cloud (e.g. Acrobat and PDF) rising by 12% and 16% y-o-y to US$3.0bn and US$0.7bn, respectively. The company’s AI Firefly models reached 4.5bn generations since launch in March 2023. Additionally, Digital Experience’s (e.g. marketing and data analytics) revenue rose by 10% y-o-y to US$1.3bn. The company continued to see increased adoption of its Digital Experience platform by large enterprises, including Alshaya and Bank of America. Non-GAAP earnings per share climbed 19% y-o-y to US$4.27, also meeting market expectations.
FY24 revenue guidance in line, Firefly upgrades to fuel future growth. The company expects revenue to reach between US$21.3bn and US$21.5bn in FY24, with the mid-point implying 10% y-o-y growth, in line with market expectations. Revenue from Digital Media and Digital Experience are expected to grow 11% and 9% y-o-y, respectively. The company recently released three new Adobe Firefly models—Firefly Image 2 model, Firefly Vector model and Firefly Design model—offering highly differentiated levels of control with effects, photo Settings and generative Match. We believe the Firefly platform with enhancing AI capabilities will serve as a growth driver for the company in the future.