Adobe (ADBE) Earnings Note

This highly-profitable “creative” software company announced record revenue and operating income on Thursday (the shares are up significantly Friday in a declining market), and it’s well-positioned to keep driving profitable growth for the decade ahead. Its products benefit from strong moats (high switching costs), increasing subscription revenue and lots of cash flow to fund growth and buy back shares. This is a business that is positioned to weather the economic cycle well, and it trades at very reasonable valuation multiples, especially considering profit margins and revenue growth guidance both remain robust.

Fiscal year 2022 revenue was $17.61 billion (+12% yoy growth), and fiscal year 2023 revenue is expected to grow at 9% (or 13% in constant currency).

Adobe press release

Adobe conference call transcript

We own shares of Adobe in our Disciplined Growth Portfolio.