Adobe Reports Revenue, Shares Effects Of Russia-Ukraine War On Business

Adobe on Tuesday reported Q1 FY22 financial results, reporting record revenue of $4.26 billion -- up 9% year-over-year. First-quarter profit rose to $1.266 billion.

Revenue from its Digital Media segment came in at $3.11 billion. Digital Media annualized recurring revenue (ARR) rose $418 million, quarter-over-quarter, to $12.57 billion.

The company’s investment in products, marketing and a data-driven operating model continue to drive Adobe’s growth, the company reported.

“Adobe’s Q1 results reflect the company’s strong execution and resilience through unprecedented circumstances,” stated Dan Durn, executive vice president and CFO, Adobe. “Our momentum, product innovation and immense market opportunity position us for success in 2022 and beyond.”

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Creative revenue rose to $2.55 billion, representing 7% year on year (YoY) growth, 16% adjusted; and Creative ARR grew to $10.54 billion. Document Cloud revenue came in at $562 million, representing 17% YoY growth, and Digital Experience segment revenue generated $1.06 billion, representing 13% YoY growth.

The war in Ukraine continues to have an impact on Adobe, and could contribute to a weaker outlook for Q2 2022. On March 4, 2022, the company announced it would stop new sales of its products and services in Russia and Belarus. Today, it saw a reduction of its Digital Media ARR balance by $75 million, which represents all ARR for existing business in Russia and Belarus.

While Adobe will continue to provide Digital Media services in Ukraine, the company reduced ARR by an additional $12 million, which represents its entire Digital Media business in Ukraine. This result -- a total ARR reduction of $87 million -- should impact revenue by $75 million for fiscal year 2022, the company said.

The company provided its Q2 2022 outlook, expecting EPS of $3.30 compared with the analysts’ consensus of $3.35 -- and revenue of $4.34 billion, compared with consensus of $4.41 billion.

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