Adobe (ADBE) is expected to post solid fiscal Q2 results on June 13, but focus will also be on the company’s fiscal H2 guidance, RBC Capital Markets said in a note sent Wednesday.
The software company has issued a lower-than-expected guidance for Q2 revenue of $5.25 billion to $5.30 billion, likely creating a “more attractive setup,” the investment bank said.
“Outside of headline results, we expect the focus will be on guidance and particularly the drivers to H2 estimates including the monetary GenAI benefits from document cloud as well as increased color on the timing of potential consumption revenue,” it said.
Generative artificial intelligence is seen as both a near- and long-term benefit to the company’s creative and experience businesses, and a potential catalyst to 2024 revenue growth, it said.
The pricing headwinds should reach peak in Q3, the firm said, and become tailwind in the last fiscal quarter, “while GenAI monetization should start to show up in numbers in [the second half].”
RBC reiterated its outperform rating for Adobe, while lowering the price target to $600 from $630.