What happened
Shares of Adobe (ADBE +1.85%) rose 15.7% in October, according to data provided by S&P Global Market Intelligence.
Shares of the software company, however, are still down 43.6% year to date.
Image source: Getty Images.
So what
During the month, Adobe hosted a meeting with financial analysts to share its growth strategy. The company not only reaffirmed its guidance for the fiscal 2022 fourth quarter, but also presented its preliminary numbers for fiscal 2023. As a recap, Adobe expects to chalk up revenue of $4.5 billion for Q4 2022, in line with the $4.4 billion it recorded for its third quarter.
FY 2023's numbers, however, do not account for its recent mega-acquisition of Figma due to the uncertainty as to when the transaction will be completed. The software giant expects FY 2023 revenue to come in between $19.1 billion and $19.3 billion, which is around 9% higher than its projected FY 2022 revenue of $17.6 billion.
NASDAQ: ADBE
Key Data Points
Aside from providing updated guidance for FY 2023, there was no specific news for Adobe's shares. The company did, however, announce a collaboration with US Bank to help the latter deliver better online and in-branch experiences that are personalized for customers' requirements. More than 80% of customer transactions are handled digitally, and Adobe's Experience Platform can curate the right content to display for the customer at appropriate junctures.
Now what
Adobe's Figma acquisition could run into issues, though. The U.S. Department of Justice is preparing to investigate the $20 billion transaction on antitrust concerns and has reached out to stakeholders of both companies as well as Figma's venture capital investors. Adobe has strenuously denied that Figma is a competitor and will engage with the regulators to present a clear picture of the merger. At present, the company still expects to close the purchase in 2023.
Investors should recall that Adobe's total addressable market remains vast, at an estimated $205 billion for 2024. The company excels in creating new categories with its innovative software-as-a-service platform and is confident of expanding its customer base. The current economic headwinds are a temporary setback for the company, but its long-term outlook remains optimistic.
