[Overseas Stocks Spotlight] "Adobe Benefits from Digital Transformation... Continues in Post-Corona Era"

[Asia Economy Reporter Eunmo Koo] Adobe (Adobe·ADBE.US) achieved its highest-ever third-quarter performance as digital transformation accelerated. The benefits of digital transformation are expected to continue in the post-COVID era.

Adobe's third-quarter revenue this year grew 14% year-over-year to $3.23 billion, and its non-GAAP earnings per share (EPS) increased 25% to $2.57, exceeding consensus estimates by 2% and 7%, respectively. The acceleration of digital transformation led to record-breaking results. The guidance for the fourth quarter projects revenue growth of 12% to $3.35 billion and a 15% increase in non-GAAP EPS to $2.64, in line with consensus.

By business segment, the Digital Media division recorded $2.3 billion, up 19% year-over-year; the Digital Experience division posted $800 million, up 2%; and Publishing declined 2% to $50 million. The Digital Media division, which drove the results, saw Creative Cloud and Document Cloud revenues of $2 billion and $400 million, respectively. On the 19th, analyst Yongmin Cho of Shinhan Financial Investment noted in a report, “Growth was driven by expanding demand for digital content and remote work,” adding, “Adobe Sign, an electronic signature solution, stood out with a 200% increase in enterprise contracts.”

Adobe’s benefits from digital transformation are expected to continue beyond the COVID-19 pandemic. Analyst Cho stated, “Digital transformation is not a temporary phenomenon caused by COVID-19 but a structural change that will persist,” forecasting, “Consumers’ increased use of digital channels and companies’ strengthening of digital capabilities will continue.” He added, “Adobe possesses many essential services for digital transformation, making it easy to expand spending from existing customers and acquire new ones,” and emphasized, “Especially, companies forced to enter the online market due to the absence of digital channels are expected to benefit from aggressive investments.”