How has ADBE's earnings surprise trend evolved?

Adobe's earnings surprise trend has shown a pattern of consistent growth, although recent guidance has been more cautious.

1. **Consistent Growth**: Adobe has demonstrated a consistent track record of growth, with earnings per share (EPS) and revenue consistently exceeding market expectations. This trend has been evident over the past four quarters, during which the company has surpassed earnings estimates in each quarter.
2. **Q1FY25 Performance**: In the first quarter of fiscal year 2025, Adobe achieved record revenue of $5.71 billion, surpassing market expectations of $5.66 billion. The company's adjusted EPS was $5.08, slightly higher than the expected $4.97. This performance marked Adobe's sixth consecutive quarter of slowing or flat earnings growth on a year-over-year basis, with sales growth ranging from 10% to 11% for five straight quarters.
3. **Q2FY25 Outlook**: For the second quarter of fiscal year 2025, analysts expect Adobe to report an adjusted EPS of $4.01, reflecting a 10.5% increase from the previous year's quarter. The estimated revenue for the quarter is $5.79 billion. Adobe's guidance for the quarter includes revenue projections ranging from $5.77 billion to $5.82 billion, with consensus among analysts for revenue of $5.80 billion.
4. **Market Sentiment and AI Expectations**: Despite the positive earnings performance, Adobe's stock has experienced declines, reflecting broader market sentiment and expectations around artificial intelligence (AI). Investors have been awaiting significant growth from Adobe's AI initiatives, which have been slow to materialize. However, the company's AI software bookings for the quarter exceeded $125 million, indicating some progress in monetizing AI technologies.

In conclusion, Adobe's earnings surprise trend has been positive, with consistent growth and occasional slight deviations due to market conditions and investor expectations. The company's recent guidance reflects a cautious outlook, particularly regarding the impact of foreign exchange volatility and the transition to subscriptions on fiscal year 2025 revenue.