06:29 AM EDT, 06/14/2024 (MT Newswires) -- Adobe (ADBE) shares climbed early Friday after the computer software company raised its full-year earnings outlook, as customers drawn in by its artificial intelligence offerings drove fiscal second-quarter results above market estimates.

Adjusted earnings are now set to come in between $18 and $18.20 per share for fiscal 2024, the company said late Thursday, up from its prior forecast of $17.60 to $18. The consensus on Capital IQ is for normalized EPS of $18.08. The stock popped 15% in recent premarket activity.

Revenue is pegged at $21.4 billion to $21.5 billion versus the previous guidance of $21.3 billion to $21.5 billion, while the Street is looking for $21.46 billion. The company projects net new annualized recurring revenue, or ARR, for its digital media segment of about $1.95 billion, up from the prior outlook of roughly $1.9 billion.

"We're driving strong usage, value and demand for our AI solutions across all customer segments and seeing early success monetizing new AI technologies across our digital media and digital experience businesses," Chief Executive Shantanu Narayen said during an earnings call, according to a Capital IQ transcript.

Adobe reported adjusted EPS of $4.48 for the May quarter, up from $3.49 the year before, topping the Street's view for $4.40. Revenue gained 10% to $5.31 billion, ahead of analysts' $5.29 billion estimate.

Digital media revenue rose 11% to $3.91 billion, driven by creative and document cloud sales growth of 10% and 19%, respectively. The division's net new ARR was $487 million. Digital experience saw a 9% increase in revenue to $1.33 billion, with subscription inclining 13% to $1.2 billion. Remaining performance obligations exiting the quarter were $17.86 billion, according to the company.

"Our highly differentiated approach to AI and innovative product delivery are attracting an expanding universe of customers and providing more value to existing users," Narayen said in a statement.

For the ongoing three-month period, Adobe expects adjusted EPS to be in a range of $4.50 to $4.55 and revenue of $5.33 billion to $5.38 billion. The current market consensus is for normalized EPS of $4.53 on revenue of $5.37 billion. The company also anticipates digital media net new ARR to be about $460 million for the quarter.

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