What to Expect From Adobe’s Upcoming Q3 Earnings?

RBC Capital analysts provided their outlook on Adobe Inc. (NASDAQ:ADBE) ahead of the upcoming Q3 earnings announcement.

Year-to-date, results have been above expectations but investor sentiment has remained more muted around the macro with questions focusing around the strength of the implied Q4 guide.

The analysts believe the macro environment remains top of mind with investors as they note on-quarter software companies missing ARR/billings by 0.4%, despite beating revenue by 2% on average, pointing to challenges around duration in an uneven macro.

The analysts expect slight CC upside to growth relative to consensus estimates: (1) Digital new media ARR vs. Street estimate of $432 million and guidance of $430 million, (2) total revenue vs. Street estimate of $4.443 billion, up 13% year-over-year, and guidance of $4.430 billion, (3) Digital media revenue vs. Street estimate of $3.247 billion, (4) EPS vs. Street estimate of $3.34.