Adobe Inc (NASDAQ:ADBE) reported stronger-than-expected results for its first quarter, but issued weak earnings outlook for the second quarter.
A news release issued Thursday revealed that Adobe achieved quarterly revenue of $2.60 billion in its first quarter of fiscal year 2019. Diluted earnings per share were $1.36 on a GAAP-basis, and $1.71 on a non-GAAP basis.
GAAP operating income in the first quarter was $695 million, and non-GAAP operating income was $985 million. GAAP net income was $674 million, and non-GAAP net income was $844 million.
Cash flow from operations was $1.01 billion, and deferred revenue grew to $3.22 billion exiting the quarter.
CEO Shantanu Narayen said "Our results in Q1 reflect continued momentum across Adobe Creative Cloud, Document Cloud and Experience Cloud."
Adobe provided annual fiscal year 2019 financial targets on Dec. 13, 2018, based on ASC 605. The company is updating these targets to be based on ASC 606, and to reflect first quarter reported results. Total fiscal year revenue is seen as $11.150 billion. Digital annualized recurring revenue is projected to be $1.500 billion. EPS is seen as being $5.59
Adobe anticipates Q3 FY2019 and Q4 FY2019 year-over-year revenue growth rates to be similar to the growth rate implied in its Q2 FY2019 revenue target. As in prior years, the company expects summer seasonality which can lead to sequentially lower net new Digital Media ARR in Q3 FY2019, followed by typical year-end strength in Q4 FY2019.
Shares plummeted $13.62, or 5.1%, in the first hour of trading to $254.07
