Adobe Q3 Earnings: Will the software giant continue on its trend to beat estimates?

Photoshop software provider Adobe (NASDAQ:ADBE) is scheduled to announce Q3 earnings results on Thursday, September 12th, with investors likely watching for the company’s growing momentum with AI and updates on monetization of its AI offerings.

The consensus EPS Estimate is $4.54 (+11.0% Y/Y) and the consensus Revenue Estimate is $5.37B (+9.8% Y/Y).

SA Analyst Grant Gigliotti says additional growth opportunities for Adobe lies in artificial intelligence, as the company continues to showcase its strength with strong earnings and continued investment in expanding its suite of products.

“Adobe faces challenges including regulatory concerns, data privacy issues, and high valuation pressures, but maintains strong fundamentals and financial stability,” Gigliotti added.

On the other hand, analyst Yuval Rotem says Adobe’s valuation appears inflated compared to peers like Microsoft as AI initiatives like Firefly have yet to significantly boost revenue, raising concerns about Adobe’s future growth prospects.

“Adobe faces significant challenges from competitors like Canva and Figma, as evolving content needs are impacting its growth and market positioning,” said Rotem.

Adobe’s (ADBE) stock jumped 15% after it reported its second quarter results in June which beat estimates. The company also delivered an upbeat forecast for the year.

The company said it expects total revenue of around $5.33B-$5.38B and non-GAAP EPS to total between $4.50 and $4.55 for the third quarter.

Over the last 2 years, ADBE has beaten EPS estimates 100% of the time and has beaten revenue estimates 88% of the time.

Over the last 3 months, EPS estimates have seen 23 upward revisions and 3 downward. Revenue estimates have seen 3 upward revisions and 22 downward.