![]() allowing them to create a bigger beachhead in the enterprise,” he continued. “While we think the acquisition makes strategic sense, let’s be honest – it feels like Adobe was losing some momentum to Figma and it was better to buy them out and combine forces vs. Jefferies analyst Brent Thill called the deal “pricey,” noting that the $20 billion price for Figma is 50 times its estimated ending annual recurring revenue for 2022.Įvercore ISI’s Kirk Materne said also said that the deal “comes at a price in terms of near-term dilution.” Adobe executives anticipate that the transaction will close in 2023. The company plans for the deal to consist of roughly half cash and half stock, per the release. They see “a massive, fast-growing market opportunity” for the combined entity. He downgraded Adobe’s stock in a Monday note to clients.Īdobe expects that the newly announced deal for San Francisco-based privately held Figma will help it “reimagine the future of creativity and productivity, accelerate creativity on the web, advance product design and inspire global communities of creators, designers and developers,” executives said in a Thursday press release. Mizuho analyst Gregg Moskowitz had written prior to the report that he “wouldn’t be surprised by a guide down for F4Q” given his recent conversations with industry players. ![]() They anticipate adjusted earnings per share of $3.50 for the fiscal fourth quarter, while the FactSet consensus was for $3.47. Adobe executives said in the release that the outlook reflects macroeconomic conditions, foreign-exchange pressures, and the usual “year-end seasonal strength in demand for our offerings.” The FactSet consensus was for $4.44 billion.įor the fiscal fourth quarter, Adobe expects revenue of $4.52 billion, while analysts tracked by FactSet had been modeling $4.60 billion. On an adjusted basis, Adobe reported $3.40 in earnings per share, up from $3.11 in the year-before period, while analysts tracked by FactSet were modeling $3.35.Īdobe’s revenue rose to $4.43 billion from $3.94 billion. 22, 2010, when they fell 19.0%.įor Adobe’s just-reported fiscal third quarter, the company posted net income of $1.16 million, or $2.42 a share, compared with $1.21 million, or $2.52 a share, in the year-earlier quarter. Shares were off 16.9% in Thursday morning trading and on track to log their largest single-day percentage decline since Sept. Adobe’s profit exceeded the consensus view, but the company fell short with its revenue outlook for the ongoing quarter. The Figma news was earlier reported by Bloomberg.The maker of Photoshop, Illustrator, and other creative software tools also delivered a mixed financial report Thursday. Upon the closing of the transaction, Dylan Field, Figma’s co-founder and CEO, will continue to lead the Figma team, reporting to David Wadhwani, president of Adobe’s Digital Media business. In year one and two after closing, the transaction will be dilutive to Adobe’s Non-GAAP EPS, and it's expected to be breakeven in year three and accretive at the end of year three, according to a transcript of Adobe's 3Q earnings call. About 6 million additional restricted stock units will be granted to Figma’s CEO and employees that will vest over four years subsequent to closing.Īdobe expects the cash consideration to be financed through cash on hand and, if necessary, a term loan. The deal is comprised of about half cash and half stock, subject to customary adjustments, according to a statement. Update 8:15am: Adds confirmation of deal.Īdobe ( NASDAQ: ADBE) agreed to buy online design collaboration company Figma for about $20 billion in cash and stock. David Tran/iStock Editorial via Getty Images
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