TMTB EOD: ADBE First Takes; Market Recap

ADBE (-6%) lower as FY24 Guide was below expectations despite Q4 Rev/nnARR and EPS beat.

Q4 nnARR beat at $569M vs street at $530M (but buyside closer to $$580M) but guides are weaker: Digital media NNARR guided to $1.9B vs buyside closer to $2.1-$2.2B. Q1 net new ARR guide only $410M. Total revenue guided to $21.4B at the midpt vs street at $21.7B while EPS also came in below guided to $17.8 vs street at $18….These guides do seem conservative but given heightened expectations, doesn’t look good at first glance.

FORECAST: Q1
Sees ADJ EPS $4.35 to $4.40, EST $4.27

2024 YEAR FORECAST
Sees ADJ EPS $17.60 to $18.00, EST $18.00

RESULTS: Q4
ADJ EPS $4.27 vs. $3.60 y/y, EST $4.14
Revenue $5.05B, +12% y/y, EST $5.02B
Subscription revenue $4.76B, +13% y/y, EST $4.74B
Product revenue $114M, -0.9% y/y, EST $103.4M
R&D expenses $889M, +15% y/y, EST $876.9M
ADJ operating income $2.34B, +16% y/y, EST $2.29B
Services and other revenue $171M, -3.9% y/y, EST $167.2M

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Market Recap

QQQs rallied 1.3% as Fed talked about discussing rate cuts for the first driving investors to continue to move out on the risk curve. ARKK outperformed up 4%, SOX was up 1.5% and BTC was up 4%. Crude finished up 2% and yields fell 15-30bps across the curve, with the 2-year falling 30bps (had to make sure i wasn’t seeing things…) and the 10-year falling 17bps.

In internet, housing names rallied with the fall in rates: OPEN +20% helped by an upgrade at KBW, Z+10% and RDFN +8.5%. W also rallied 10% and other yield sensitive names like CVNA (+15%) outperformed. MTCH was up 4.5% after they filed an 8-K yesterday updating bylaws related to director nominees.