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Mon, Feb. 8, 2:37 PM
- Many tech stocks are seeing 6%+ losses as investors flee to safety yet again. The Nasdaq is down 3.4%, and the S&P 2.7%.
- As was the case on Friday following Tableau and LinkedIn's disappointing guidance, a slew of enterprise tech stocks are seeing big losses, with cloud software and security tech names well-represented on the casualty list.
- Also: Solar stocks are having another brutal day (TAN -6.7%) as energy stocks get routed amid fears Chesapeake Energy is close to bankruptcy. WTI crude oil is once more near $30/barrel.
- Enterprise software decliners: Adobe (ADBE -9.6%), Paylocity (PCTY -19.1%), Salesforce (CRM -9.9%), Workday (WDAY -12%), Guidewire (GWRE -12.5%), ServiceNow (NOW -11.5%), Zendesk (ZEN -13.8%), Paycom (PAYC -13.4%), Marin Software (MRIN -10.3%), Castlight (CSLT -8.4%), Cornerstone OnDemand (CSOD -12.1%), Atlassian (TEAM -13.2%), inContact (SAAS -9.6%), and Bazaarvoice (BV -14.5%).
- Enterprise security decliners: Palo Alto Networks (PANW -12.2%), FireEye (FEYE -9.8%), CyberArk (CYBR -11.5%), Proofpoint (PFPT -12.7%), Qualys (QLYS -8.9%), Imperva (IMPV -9.7%), Rapid7 (RPD -9.4%), and Barracuda (CUDA -8.4%).
- Solar decliners: SunEdison (SUNE -11.3%), SunPower (SPWR -8.8%), JinkoSolar (JKS -7.6%), SolarEdge (SEDG -7.9%), Yingli (YGE -7.1%), TerraForm Power (TERP -10.7%), and TerraForm Global (GLBL -9.2%).
- Other major decliners: Micron (MU -9.1%), Western Digital (WDC -10.5%), Arista (ANET -10.9%), Universal Display (OLED -10.6%), Rackspace (RAX -11.3%), Fitbit (FIT -8.7%), Nimble Storage (NMBL -11.3%), Sierra Wireless (SWIR -9.9%), Rocket Fuel (FUEL -9.8%), Knowles (KN -9%), Mitel (MITL -8.9%), and Alarm.com (ALRM -8.9%).
- Previously covered: Yelp, Cognizant, Tableau, Globant, Ambarella, European tech stocks
Fri, Feb. 5, 11:01 AM
- A long list of enterprise software and security tech names are off sharply after business intelligence/analytics software upstart Tableau (down 45.3%) reported slower-than-expected license revenue growth and issued below-consensus Q1/2016 guidance.
- Also possibly weighing: LinkedIn (down 39.6%), which derives a large % of its revenue from cloud-based recruiting and sales tools for enterprises, issued weak Q1/2016 guidance.
- Given the magnitude of the drops, margin calls and forced selling by funds could be playing a big role. The Nasdaq is down 2.2%.
- Tableau suggested its growth slowdown has to do with softening IT spend and a need to improve sales productivity, but analysts have raised questions about competition from the likes of Microsoft, Amazon, and Qlik. LinkedIn forecast a growth slowdown for its field sales hiring solutions business, while blaming European/Asian macro pressures. The company also noted its display ad business continues declining amid weak industry growth.
- Major enterprise software decliners include Splunk (SPLK -23.7%), Workday (WDAY -15.1%), Adobe (ADBE -7%), Zendesk (ZEN -15.2%), ServiceNow (NOW -13.6%), NetSuite (N -12.4%), Salesforce (CRM -11.2%), Paycom (PAYC -10.6%), Ellie Mae (ELLI -11.5%), Cornerstone OnDemand (CSOD -7.8%), Veeva (VEEV -7.7%), Ultimate Software (ULTI -9%), Luxoft (LXFT -7.5%), Manhattan Associates (MANH -8.5%), Box (BOX -6.6%), Guidewire (GWRE -13.6%), Demandware (DWRE -9.3%), Hortonworks (HDP -9.7%), and Tableau rival Qlik (QLIK -16.6%). The casualty list includes many cloud software firms, as well as several analytics software plays. Previously covered: New Relic, Atlassian.
- Major decliners among security tech firms: Palo Alto Networks (PANW -12%), FireEye (FEYE -8.9%), Rapid7 (RPD -8.6%), CyberArk (CYBR -8.3%), Proofpoint (PFPT -8%), Imperva (IMPV -8.3%), Fortinet (FTNT -6.9%), and Vasco (VDSI -5.1%). The selloff comes in spite of an FQ3 beat and in-line FQ4 guidance from Symantec, which has been losing share to various upstarts.
Dec. 11, 2015, 9:16 AM
Dec. 10, 2015, 5:36 PM
Dec. 10, 2015, 4:48 PM
- Adobe (NASDAQ:ADBE) has guided in its earnings presentation (.pdf) for FQ1 revenue of $1.3B-$1.35B and EPS of $0.56-$0.62 vs. a consensus of $1.33B and $0.62. FY16 (ends Nov. '16) guidance for revenue of $5.7B and EPS of $2.70 (issued in October) has been reiterated; consensus is at $5.75B and $2.79.
- However, Adobe has upped its FY16 Digital Media annualized recurring revenue (ARR - driven by subscriptions) growth target to $1B from an earlier implied target of $738M. It now expects to exit FY16 with $3.875B in Digital Media ARR, up from $2.88B (in Dec. 2015 currency rates) at the end of FQ4. Marketing Cloud (ad software/services) revenue and bookings are still respectively forecast to grow 20% and 30%.
- Top-line performance: 833 Creative Cloud subs were added in FQ4, up from FQ3's 684K and FQ2's 639K, and bringing the base to 6.17M. Creative ARR rose 55% Y/Y to $2.5B. Document Cloud ARR rose 45% to $385M, with revenue rising 6% to $208.7M. Marketing Cloud revenue rose 7% to $352.2M, with "record bookings in Q4 that contributed to achieving our annual bookings growth goal of approximately 30 percent." Lifecycle/Web conferencing revenue fell 30% to $30.5M.
Subscriptions made up 69% of total FQ4 revenue, product sales (software licenses) 22%, and services/support 19%. Subscription growth led the deferred revenue balance to rise 29% Y/Y to $1.49B, and the unbilled backlog to grow to $2.89B. 60% of revenue was from the Americas, 27% from EMEA, and 13% from Asia.
- Financials: Boosting EPS: GAAP operating expenses rose a modest 6% Y/Y to $814M (compares with 22% revenue growth) after backing out restructuring/other charges. $409M was spent on sales/marketing, $214M on R&D, and $134M on G&A. $122M was spent to buy back 1.4M shares. Adobe ended FQ4 with $4B in cash and $1.9B in debt.
- Shares have risen to $93.37 after hours, making new highs along the way.
- FQ4 results, earnings release, datasheet (.pdf)
Dec. 10, 2015, 4:08 PM
Dec. 10, 2015, 10:23 AM
- "We believe an acquisition of GoPro (NASDAQ:GPRO) would make sense for Apple (NASDAQ:AAPL); action cameras are uniquely positioned at the intersection of Apple’s smartphone, wearables, and multimedia offerings," writes FBR's Daniel Ives in a note about potential Apple buyout targets.
- Ives: "Additionally, GoPro’s new product cycles could open the door to areas where Apple’s competitors are investing heavily (e.g., drones, VR), and Cupertino has been playing catch-up. We also see strategic value in GoPro being integrated with Apple’s strong multimedia ecosystem (e.g., iTunes, Apple TV, etc.)."
- Media/ad software giant Adobe (ADBE - $44.4B market cap), enterprise cloud storage/file-sharing leader Box (BOX - $1.6B market cap), and EV/battery maker Tesla (TSLA - $30B market cap) are also named as potential Apple targets. "Box would give Apple an avenue into enterprise storage and enable it to expand its product tentacles (hardware/storage) into the enterprise cloud frontier ... Adobe would provide a nice pipeline into the enterprise ... Adobe’s Document Cloud/Marketing Cloud applications are helping enterprises grapple with the growth of digital marketing, proliferation of mobile devices in the enterprise, and IOT."
- The GoPro remarks come with the action camera leader down 82% from its Oct. 2014 high of $98.47, and sporting a $2.4B market cap. In other news, GoPro announced today it has added Apple Watch support for its iOS app.
- Recent GoPro coverage
- Update (11:48AM ET): GoPro is now up 8.9%. Also announced today: GoPro states its drone (due in 1H16) will be known as Karma. A teaser video has been released.
- Update 2 (2:30PM ET): GoPro is now up 14%. Given a short interest of 31.2M shares (47% of the float) as of Nov. 30, short-covering is likely playing an important role.
Dec. 8, 2015, 3:04 PM
- Pac Crest states its Adobe (ADBE +2.2%) checks came back positive ahead of the media software giant's Thursday FQ4 report. Deutsche has hiked its target by $20 to $110, while reiterating a Buy.
- Adobe is now up 26% YTD. Shares made a new high of $92.88 yesterday before retreating. An October selloff sparked by the company's light FY16 guidance proved short-lived, as bulls focused on Adobe's strong FY15-FY18 CAGR forecasts.
- In other news, Adobe has made both the iOS and Android versions of Lightroom free to use, furthering an effort to boost Creative Cloud subscriptions by luring mobile users with free apps. Lightroom mobile users wanting to sync their files/edits with Lightroom's PC and cloud apps will still need a CC subscription.
Oct. 7, 2015, 6:14 PM
- Adobe (NASDAQ:ADBE) narrowed the initial after-hours losses seen yesterday after the imaging/media software giant provided below-consensus FY16 sales and EPS guidance ahead of an analyst meeting, but nonetheless closed down sharply. Prior to the outlook, Adobe was barely $2 removed from a high of $87.25.
- Several analysts argued Adobe's top-line guidance isn't much to be worried about, given forex pressures, the impact of the cloud/subscription transition, and the fact Adobe expects strong revenue and ARR growth through FY18. On the other hand, some concerns were aired about Adobe's aggressive spending forecast: It expects 15% FY16 opex growth, and also a 15% opex CAGR through FY18.
- RBC's Ross MacMillan (Outperform, $100 target): “[I]mplied opex CAGR of ~15% seems high in a historic and absolute dollar context ... the good news is that we think the market will pay for higher growth and it’s clear that margin optimization is still in play for beyond FY18. Mgmt. is clearly more bullish on the opportunity and we think is trying to calibrate expense expectations to the upper boundaries of what might be required to drive growth."
- Citi's Walter Pritchard (Buy, target cut by $5 to $99): "Long-term guidance suggests 20% top-line growth and 30% EPS growth for FY15-18. We remain slightly above these ranges. As we expect the market to get over impact of FX quickly, the debate that is likely to persist is whether management will grow OpEx at the implied 15%+ rate from FY15-18 ... we note that management has never spent to guidance and we expect profitability still holds upside."
- Wunderlich's Rob Breza (Hold, $90 target) isn't as upbeat. "With approximately 77% of the model transition behind the company, we believe results should be more predictable. However, results continue to disappoint, which will likely have investors pausing. Inconsistent results over the past few quarters combined with a premium valuation and reduced estimates will likely negatively impact near- term performance until a more consistent performance record is established."
- Analyst meeting slides (.pdf)
Oct. 6, 2015, 5:43 PM
Oct. 6, 2015, 4:10 PM
- Ahead of an analyst meeting at its annual Adobe MAX conference, Adobe (NASDAQ:ADBE) has guided for FY16 (ends Nov. '16) revenue of $5.7B and EPS of $2.70, below a consensus of $5.93B and $3.19.
- The company forecasts a 20% revenue CAGR, 25% op. cash flow CAGR, and 30% EPS CAGR from FY15 to FY18.
- Digital Media (Creative Cloud, Document Cloud) and Marketing Cloud (online ad software) revenue are both expected to rise 20% in FY16, with Marketing Cloud bookings rising 30% and Digital Media annualized recurring revenue (ARR) 25%.
- Digital Media revenue, Marketing Cloud revenue, and Digital Media ARR are each expected to see 20%+ CAGRs from FY15 to FY18. Marketing Cloud bookings are expected to see a 30% CAGR.
- Shares have tumbled to $77.97 after hours. The analyst meeting starts at 5PM ET (webcast).
- Update (5:33PM ET): Adobe is now only down 2.5%.
Sep. 18, 2015, 10:59 AM
- Down in after hours trading yesterday after beating FQ3 estimates, providing light FQ4 guidance, reporting healthy Creative Cloud subscriber growth, and announcing a management shakeup, Adobe (NASDAQ:ADBE) has turned positive this morning.
- No upgrades or downgrades have arrived. Analyst reactions to Adobe's numbers have been fairly positive, with many backing up Adobe's argument that subscription growth (both for Creative Cloud and other products) is depressing near-term quarterly numbers by pushing out revenue recognition. RBC (Outperform, $105 target) still sees FY17 (ends Nov. '17) revenue beating expectations.
- On the earnings call (transcript), Adobe stated it still expects Marketing Cloud bookings to rise 30% or more in FY16, and that it expects to end FY16 with a total deferred revenue + unbilled backlog balance of more than $3.5B. 54% of Creative Cloud subscriptions are said to be for the full suite, and 46% for individual apps.
- Adobe's FQ3 results, guidance/details
Sep. 17, 2015, 5:37 PM
Sep. 17, 2015, 4:45 PM
- Along with the results, Adobe (NASDAQ:ADBE) states Digital Media chief David Wadhwani is leaving to "pursue a CEO opportunity." Document Cloud chief Bryan Lamkin will assume his responsibilities. In addition, CTO Abhay Parasnis will now take responsibility for Adobe's security and research teams, and "drive the overall technology strategy, architecture, and innovation and integration roadmap for Adobe's cloud services." CFO Mark Garrett will now also be responsible for corporate/M&A strategy.
- Continuing a recent trend of light guidance, Adobe expects FQ4 revenue of $1.275B-$1.325B and EPS of $0.56-$0.62 vs. a consensus of $1.36B to $0.64. Adobe reiterates the transition from up-front licenses to Creative/Document Cloud subscriptions is pushing out revenue recognition, and states "larger engagements and longer implementation cycles" are pushing Marketing Cloud revenue into the deferred revenue balance and unbilled backlog.
- Adobe added 684K Creative Cloud subs in FQ3, up slightly from FQ2's 639K and bringing the total base to 5.33M. Creative annual recurring revenue (ARR) grew by $262M Q/Q to $2.29B. Document Cloud ARR rose by $28M to $357M.
- Adobe: "We are migrating existing customers to Creative Cloud, and are attracting large numbers of first-time customers. In addition, we are now migrating significant numbers of hobbyist customers who previously used Photoshop Elements and Lightroom on a perpetual basis to the Creative Cloud Photography subscription offering."
- Top-line/regional data: Digital Media revenue +24% Y/Y to $769.7M. Digital Marketing +20% to $402.5M, with $368.4M from Marketing Cloud (ad software). Print & Publishing -4% to $45.6M. Subscription revenue ($829.1M) now accounts for 68% of total revenue. The Americas were 57% of revenue, EMEA 29%, and Asia-Pac 14%.
- Financials: Thanks to lower G&A spend, GAAP operating expenses rose just 1% Y/Y to $780.7M. Also lifting EPS: $132M was spent on buybacks. The deferred revenue balance rose by ~$80M Q/Q to $1.31B. Adobe ended FQ3 with $3.7B in cash/short-term investments, and $1.9B in debt.
- Shares have fallen to $77.75 after hours.
- Adobe's FQ3 beat, PR, datasheet (.pdf), earnings slides (.pdf)
Sep. 17, 2015, 4:04 PM
- Adobe Systems (NASDAQ:ADBE): FQ3 EPS of $0.54 beats by $0.04.
- Revenue of $1.22B (+20.8% Y/Y) beats by $10M.
- Shares +2%.
Aug. 25, 2015, 9:37 AM
- "We are now into the foothills of the revenue and margin reacceleration which should gain momentum going forward," writes Baird's Steven Ashley, upgrading Adobe (NASDAQ:ADBE) to Outperform while maintaining an $85 target.
- Much like RBC's Ross MacMillan, Ashley is optimistic about the ability of Creative Cloud to expand Adobe's addressable market. "The Adobe business model transition not only enhances customer lifetime value, it also expands the market by attracting new paying-customers, and perhaps most importantly is transformational from a customer point of view."
- He adds Adobe's Creative Cloud mobile apps "incentivize legacy CS6/CS5 customers to adopt CC," as well as bring more content to the cloud, bring in new customers, and boost renewal rates. ARPU (recently pressured by subscription discounts) is expected to bottom soon, before rising over the next 18 months.
- Shares are up strongly as the Nasdaq posts a 2.9% gain.
Adobe Systems Inc offers a line of software and services used by creative professionals, marketers, developers, enterprises and consumers for creating, managing, delivering, measuring, optimizing and engaging with compelling operating systems.
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