Adobe Inc. (ADBE) - Get Report posted stronger-than expected fourth quarter sales Thursday said 2019 revenues would top $11 billion as the Photoshop maker continues to challenge VMware (VMW) - Get Report and Salesforce (CRM) - Get Report in the global cloud computing business.
Adobe said adjusted earnings for the three months ended on November 30, the company's fourth quarter, came in at $1.88 per share, up 45% from the same period last year but just shy of the Street consensus of $1.88. Group sales, Adobe said, were pegged at $2.46 billion, up 23% year-on-year and ahead of analysts' forecasts. Adobe also said its sees non-GAAP earnings for its 2019 fiscal year at around $7.75 and revenues of $11.15 billion
"Adobe achieved record revenue of greater than $9 billion and delivered outstanding earnings performance in fiscal 2018," said CEO Shantanu Narayen. "In 2018 we made significant investments across our product portfolio, entered new markets, and made strategic acquisitions which we believe will fuel continued top and bottom-line performance."
Adobe shares fell 4.2% on Friday to $237.58.
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Adobe closed its $4.75 billion acquisition of Marketo, a business-to-business marketing applications group from private equity investors Vista Equity on October 31 and the company said it added around $21 million in revenues over the fourth quarter. It also bought Magento Commerce from Permira, another private equity group, for $1.7 billion in May.
"We're excited to add Marketo and the expanded market opportunity it provides. We look forward to delivering strong revenue growth, accelerating earnings growth and healthy margin expansion during fiscal 2019."
Adobe said it sees digital media segment revenue rising around 20% over 2019, while digital experience segment sales grow by around 30%.
"Adobe expects revenue in each quarter to grow by approximately the same year-over-year growth percentage implied in its targeted revenue for the year," the company said, and expects net new digital media annual recurring revenue in each quarter next year "to be sequentially similar as that achieved in past fiscal years from quarter to quarter."
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