Adobe Sales Forecast Tops Estimates on Creative Software

(Bloomberg) -- Adobe Inc. gave an annual revenue forecast that topped analysts’ estimates, suggesting the popularity of Photoshop and other creative software applications will continue to drive growth.

Fiscal 2021 sales will be about $15 billion, the San Jose, California-based company said Thursday in a statement. Analysts, on average, estimated $14.8 billion, according to data compiled by Bloomberg. Annual profit, excluding some items, will be about $11.20 a share. Analysts projected $11.14.

Chief Executive Officer Shantanu Narayen has pitched new creative software tools to continue Adobe’s rapid revenue growth. The company in October introduced a version of its popular app, Illustrator, for Apple Inc.’s iPad, as part of an effort to offer its products on more devices being used by creative professionals and hobbyists. Sales of the company’s marketing, advertising and analytics offerings haven’t increased as anticipated this year, making it more important for Adobe to maintain its grip on the design software market.

The company bought Workfront for $1.5 billion in a deal that closed this week, to add a collaboration tool to its marketing software. Adobe hopes the addition makes its marketing products more appealing to clients whose employees are working remotely due to the coronavirus pandemic.

Adobe said that revenue from its Digital Media division, including the creative and document clouds, will rise 19% in the next fiscal year, while sales of its marketing and advertising suite will also gain 19%.

In the fiscal fourth quarter, Adobe reported record revenue of $3.42 billion, up 14% from a year earlier and topping analysts’ estimates. Profit, excluding certain items, was $2.81 a share, also beating expectations.

Adobe also announced a new $15 billion stock repurchase program to run through 2024. The existing program, for repurchases of up to $18 billion, will be exhausted in the first half of 2021, Adobe said.

Shares were little changed in early trading after closing Wednesday at $483.74 in New York. The stock has jumped about 47% this year.

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