Key Takeaways
- Adobe is set to release its second-quarter earnings report for the 2024 fiscal year after the bell on Thursday.
- The company is expected to report that revenue and net income gained from the year-ago period, according to analyst estimates compiled by Visible Alpha.
- Investors will likely be watching for sustained momentum in Adobe’s Digital Media business.
- Adobe could also provide updates on its artificial intelligence monetization plan.
Adobe (ADBE) is set to report its second-quarter earnings for the 2024 fiscal year after the bell on Thursday, with investors likely watching for sustained Digital Media segment momentum and perspective on the company’s artificial intelligence (AI) monetization strategy.
Analysts project Adobe’s revenue to come in at $5.29 billion for the second quarter of fiscal 2024, up from the previous quarter and year-ago period, according to estimates compiled by Visible Alpha.
Net income is expected to be $1.51 billion, an increase from $1.3 billion in the fiscal second quarter of 2023, while diluted earnings per share (EPS) could come in at $3.34, compared to $2.82 in the same period a year earlier.
| Analyst Estimates for Q2 FY 2024 | Q1 FY 2024 | Q2 FY 2023 | |
| Revenue | $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 Metrics: Digital Media Growth
Adobe’s Digital Media segment posted $3.82 billion in revenue in the first quarter of fiscal 2024, representing 12% year-over-year growth.
Analysts project Digital Media to record $3.89 billion in revenue, which would represent 10.8% growth from the year-ago period.
Citi analysts said they “expect to see better upside” to the second quarter of the Digital Media segment, but noted “a tougher set-up” to meet consensus estimates in the third quarter, with the second half of the fiscal year “looking somewhat aggressive.”
Business Spotlight: AI Monetization Outlook
Adobe recently unveiled an AI assistant subscription add-on to its other offerings which could help the company better monetize the emerging tech and compete with other big tech companies.
Adobe stock is “pressured by competitive concerns and underwhelming near-term genAI monetization,” Deutsche Bank analysts said.
The analysts added “while Generative AI monetization remains on the come [up],” they “expect investors to exit the quarter feeling better about Adobe’s broader GenAI positioning, aligning with the increasing partner enthusiasm we are picking up around GenStudio, Firefly Services, and custom models.”
In its earnings call, Adobe could also provide more updates on its plans to monetize AI.
Adobe shares have lost more than one-fifth of their value since the start of 2024, at $462.69 as of Tuesday’s close.