Adobe Reports Fiscal Year 2024 Results

Adobe wrapped up its fiscal year with its usual solid results, reporting 11% revenue growth, a 3.5% share reduction, and strong free cash generation of $7.9 billion. Creative (Photoshop, etc.), its largest unit at 59% of sales, grew sales by 11% for the year. Digital Experience (marketing creation tools, accounting for 25% of revenue) was up by 10%. Document Cloud (Acrobat and e-signature offerings) saw a strong 18% increase. The backlog ended the year up 16%. While the blowup of the Figma deal certainly crimps Adobe's growth potential in the near term, the firm continues to be an incredible, predictable business that I'm happy to hold. After updating the valuation model and incorporating the latest data, I'm raising the fair value to $648. The shares represent substantial value at current prices.