Adobe Tops Q1 Estimates But Disappointing Q2 Outlook Sinks Shares

Adobe beat Q1 earnings and revenue estimates, but Q2 revenue guidance was lower than expected, causing an 11% stock drop.

Q1 revenue grew 11% to $5.18B and adjusted EPS grew 18% to $4.48, exceeding guidance.

Digital media revenue grew 12% and digital experience revenue grew 10% year-over-year.

Adobe announced a new $25B stock repurchase program through March 2028.

Q2 revenue guidance midpoint of $5.275B implies 9.4% year-over-year growth, below the 10.2% Wall Street estimate, while adjusted EPS guidance was in line.