A solid summer for Adobe: The software company beat expectations for Q3 and predicted Q4 sales and profits ahead of Wall Street’s estimates. Shares are up 3%-5% in after-hours trading. Join us for LIVE coverage of Adobe’s Q3 earnings call at 5 p.m. ET; refresh this page for the latest.
Adobe (ADBE) posted $887 million of Q3 revenue, up 4% year-over-year and beating the Street’s $877 million consensus. And the company posted $0.50 of non-GAAP EPS, beating the Street’s $0.46 estimate. Especially strong: Adobe’s Acrobat and LiveCycle products, according to a statement by CEO Shantanu Narayen.
For Q4, when Adobe’s new flagship Creative Suite 4 should be shipping, Adobe expects to post non-GAAP EPS of $0.51 to $0.53 on sales between $925 million to $955 million — both at the high end of the Street’s estimates; $0.51 on $939 million of sales.
5:07 Shantanu joins, going over numbers. Must say, this Adobe Webcast software much better than typical Windows Media/RealPlayer stuff. Audio much better, slides look great.
5:08 Mark Garrett going over financials. Mostly listening for commentary on CS4, general biz, and iPhone update.
5:13 Mobile/device revenue doubles y/y, not bad but still tiny. $25 million or so.
5:17 Shantanu back on. CS3 revenue down, as expected. CS3 rev up 40% vs. CS2 cycle. Sept 23 is CS4 launch. “Radical workthrough breakthroughs.” PACKED! with hundreds of feature integrations. Flash across product line.
5:20 80%+ of videos viewed on Flash worldwide, per comScore.
5:23 Atlantic Records, DirecTV, Fox News using AIR
5:25 No longer prudent to comment on fiscal 2009 growth until Q4 is over given macro uncertainty.
5:29 Q&A begins
5:30 How to bring as much of legacy base current? Narayen: CS4 “must-have” etc. Specific pricing at launch event; one of oppts is how we get everyone to standardize rather than skipping versions.
5:35 Spending habits in the US? Mark: US good. Shantanu: But US going through interesting times. As excited as ever about major market trends driving ADBE’s business.
5:38 Macro? Revenue decline typical, “muted” impact of economy, CS4 launch preparation. Sequential decline in mobile with OSP announcement.
5:48 Nothing abnormal in Europe.
5:49 Yes, next week’s CS3 sales will include CS4 upgrade tickets.
5:50 Taking ’09 comments off the table — being prudent based on economic environment.
5:51 Any pushback from customers on release cycle too quick? Historically an 18-24 month cycle; this is in line.
5:53 Visibility into next quarter macro in projection. For people who are creative professionals and use software 8+ hrs a day, any new features/efficiency pays for itself.
5:58 Ad revenue a nascent opportunity; sharing in revenue ads. Real revenue in video business is through streaming video on the Web, authoring tools.
6:00 Anything incremental? Get sellthrough data on a weekly basis, only a couple weeks of data for quarter — built into guidance.
6:01 Drat. No iPhone update. Call winding down.
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