Watch out for two software companies trading lower this morning. Adobe (ADBE), which makes Photoshop and Acrobat PDF software, reported strong revenue and earnings. However, investors did not like the outlook.
ADBE stock may fall by around 4% at the open. It earned $5.08 a share (non-GAAP). Revenue increased by 10.2% Y/Y to $5.71 billion. In Q2, revenue of $5.82 billion is not enough.
Unfortunately, the firm’s generous bid for Figma, whose deal fell through, hurts the company’s reputation. Adobe had to pay $1 billion to Figma when European regulators indicated it would not allow the deal to close.
SentinelOne, a cybersecurity software company, will open down by around 12%. It lost $0.22 a share. Although revenue grew by 29.5% Y/Y, the cash flow margin was negative 2%. The firm is forecasting a non-GAAP operating margin of only 3-4% this fiscal year.
iRobot (IRBT), which makes robotic vacuums, is under severe business duress. The firm will likely file for bankruptcy eventually. It lost $2.06 a share as revenue plunged by 44.1% Y/Y to $172 million. Chinese firms are taking their market share.
After the government denied Amazon (AMZN) from buying this firm, its survival is questionable. iRobot canceled its conference call scheduled for yesterday. It also suspended its FY2025 outlook.
