What you need to know ahead of Adobe’s earnings report

Key takeaways

  • Adobe is scheduled to release its second-quarter earnings report for fiscal 2024 on Thursday after the bell.
  • According to analyst estimates compiled by Visible Alpha, the company is expected to announce revenue and net profit for the year-ago period.
  • Investors will likely be paying attention to continued momentum in Adobe’s digital media business.
  • Adobe may also provide updates to its AI monetization plan.

Adobe ( ADBE ) is scheduled to report its second-quarter fiscal 2024 earnings on Thursday after the bell, with investors likely to be paying attention to continued momentum in its digital media segment and the prospects for the company’s artificial intelligence (AI)-driven monetization strategy.

Analysts forecast Adobe’s fiscal second-quarter 2024 revenue of $5.29 billion, compared to the prior-year quarter and year-ago period, according to estimates compiled by Visible Alpha.

Net income is expected to be $1.51 billion, up from $1.3 billion in the fiscal second quarter of 2023, while diluted earnings per share (EPS) could be $3.34, up from $2. $82 in the same period a year earlier.

Analyst estimates for the second quarter of fiscal year 2024 Q1 2024 Second quarter of fiscal year 2023
Income $5.29 billion $5.18 billion $4.82 billion
Diluted earnings per share $3.34 $1.36 $2.82
Net income $1.51 billion $620 million $1.3 billion

Key indicators: development of digital media

Adobe’s digital media segment reported revenue of $3.82 billion in the first quarter of fiscal 2024, representing 12% year-over-year growth.

Analysts estimate that Digital Media will report revenue of $3.89 billion, which would represent a 10.8% increase from the year-ago period.

Citi analysts said they “expect better growth” in the second quarter of the digital media segment, but noted a “tougher setup” to meet consensus estimates in the third quarter, while the second half of the fiscal year “looks somewhat aggressive.”

Business in the spotlight: AI monetization prospects

Adobe recently unveiled an AI assistant subscription add-on to its other products that could help the company better monetize emerging technologies and compete with other big tech companies.

“Adobe shares are under pressure from competitive concerns and unsatisfactory near-term monetization of genAI,” Deutsche Bank analysts said.

The analysts added that “while generative AI monetization continues to accelerate (growth),” they “expect investors to emerge from the quarter in better spirits due to Adobe’s broader positioning in GenAI, which is consistent with the growing partner enthusiasm we are seeing around GenStudio , Firefly Services and custom models.”

Adobe may also provide more updates on its plans to monetize AI in its earnings call.

Adobe shares have lost more than a fifth of their value since the start of 2024, hitting $462.69 at Tuesday’s close.