What happened
Shares of Adobe (ADBE -0.48%) fell 10% on Thursday following the release of the tech giant's fiscal 2021 fourth-quarter earnings results.
So what
Adobe's revenue jumped 20% year over year to $4.1 billion. The software company enjoyed broad-based growth. Revenue in its creative, digital media, digital experience, and document cloud divisions increased 19%, 21%, 23%, and 29%, respectively.
Adobe has emerged as a key beneficiary of the digital transformation megatrend during the COVID-19 pandemic. "Technology innovation, the proliferation of new devices and platforms, and the increased desire and ability for anyone to create and deliver great digital experiences have all accelerated the move to a truly digital world," Adobe Chief Marketing Officer Ann Lewnes said during a conference call with analysts.
The revenue gains helped Adobe's gross profit rise by 20% to $3.6 billion. Its adjusted operating income and earnings per share, in turn, grew 21% and 14%, respectively, to $1.5 billion and $3.20.
Image source: Getty Images.
Now what
Investors, however, appeared to focus more on Adobe's muted sales and profit guidance. Management expects total revenue to grow by roughly 13% to $17.9 billion, while adjusted earnings increase by 10%, to $13.70 per share. That was below Wall Street's projections, which had called for revenue of $18.2 billion and adjusted per-share profits of $14.26.
Despite the shortfall, Adobe's leadership said the software leader has a massive market opportunity still ahead, which CFO Dan Durn pegged at a whopping $205 billion.
"Adobe's vision, category leadership, ground-breaking technology, and large and loyal customer base position us well for fiscal 2022 and beyond," CEO Shantanu Narayen said.
