Oracle, Adobe, Arm, and Unity: Stock Market Weekly Digest (11-15 September)
15.09.2023
4 minutes for reading
Oracle Corporation, Adobe Systems Incorporated, Arm Holdings, and Unity Software Inc. were in the spotlight this week. Let’s find out how their stocks reacted to the latest developments.
Oracle Q1 fiscal 2024 report sent its stock price plunging by 13%
Oracle Corporation, one of the world’s largest software manufacturers, reported its Q1 fiscal 2024 results on Monday 11 September. Revenue for June to August increased by 8.81% from the corresponding period of last year, reaching 12.45 billion USD, and net profit surged 56.33% to 2.42 billion USD or 0.86 USD per share.
The allocation of Oracle Corporation's revenues for Q1 fiscal 2024 by business segment was as follows:
- Cloud services and license support: +13.43% to 9.55 billion USD (market forecast: 9.43 billion USD)
- Cloud license and on-premise license: −10.51%, down to 0.81 billion USD (market forecast: 0.97 billion USD)
- Hardware: −6.42%, down to 0.71 billion USD (market forecast: 0.75 billion USD)
- Services: +1.62% to 1.38 billion USD (market forecast: 1.43 billion USD)
Oracle Corporation expects adjusted earnings for Q2 fiscal 2024 to be 1.30-1.34 USD per share and revenue to reach 12.89-13.13 billion USD. Analysts surveyed by FactSet estimate adjusted EPS at an average of 1.34 USD and revenue at 13.28 billion USD.
On the day following the release of the quarterly earnings report and forecast, Oracle Corporation (NYSE: ORCL) stock lost 13.50%, dropping to 109.61 USD per share. The quotes changed the direction of movement and added 2.03% on Wednesday, rising to 111.84 USD, and another 1.63% on Thursday to 113.66 USD.
Unity’s announcement of developer fees spurred its stock decline
On Tuesday 12 September, Unity Software Inc., which owns a cross-platform engine for video game development, announced plans to introduce developer fees. Starting from 1 January 2024, the Unity Runtime Fee will be charged when a project achieves a certain revenue threshold in the last twelve months and exceeds a certain number of game installs.
Thresholds for Unity Personal and Unity Plus:
- game revenue in the last 12 months – from 0.2 million USD
- lifetime game installs – from 0.2 million
Thresholds for Unity Pro and Unity Enterprise:
- game revenue in the last 12 months – from 1 million USD
- lifetime game installs – from 1 million
Following this news, the technology corporation faced a barrage of criticism from developers, which resulted in Unity Software Inc. (NYSE: U) shares tumbling 5.52% on 13 September, down to 36.82 USD per unit. The next day, the figure dropped by an additional 3.01% to 35.71 USD.
Adobe’s Q3 2023 fiscal report: profit surged by 24%
The US large software developer Adobe Systems Incorporated released its Q3 fiscal 2023 results on Thursday 14 September.
Revenue for June to August increased by 10.31% to 4.89 billion USD, and net profit was up 23.50%, rising to 1.40 billion USD or 3.07 USD per share. Subscription segment revenue added 12.19%, reaching 4.63 billion USD, Product segment revenue decreased by 23.81% to 96 million USD, and Services and other segment revenue decreased by 8.94% to 163 million USD.
The corporation’s management expects Q4 fiscal 2023 revenue to reach 4.98-5.03 billion USD with EPS standing at 3.10-3.15 USD. Adobe Systems Incorporated (NASDAQ: ADBE) stock plunged 0.25% to 552.16 USD at the close of trading on 14 September, falling by another 1.48% in after-hours trading to 544.00 USD.
Arm Holdings IPO was the largest in 2023
On 14 September, British semiconductor manufacturer Arm Holdings listed 95.5 million ADRs on the NASDAQ at a price of 51 USD per share. The company was valued at 54.5 billion USD in the initial public offering, raising 4.87 billion USD, making it the largest IPO in 2023.
Debut trading of Arm Holdings (NASDAQ: ARM) shares opened at 56.1 USD per share, 10% higher than the price of the initial public offering. At the close of the trading session, the quotes reached 63.59 USD, exceeding the IPO price by 24.69%.
Participants of Arm Holdings IPO included the company’s major clients such as Intel Corporation (NASDAQ: INTC), Apple Inc. (NASDAQ: AAPL), NVIDIA Corporation (NASDAQ: NVDA), Samsung Electronics Co., and Taiwan Semiconductor Manufacturing Company (NYSE: TSM). SoftBank Group Corp. retained 90% of Arm Holdings shares after the company went public on the US exchange.
Summing up
This week, Oracle Corporation and Adobe Systems Incorporated reported their results for the previous quarter, and the stocks of both corporations responded to the released financial statistics with a drop.
Unity Software Inc. announced plans to introduce developer fees, which caused a barrage of criticism and a decline in the company’s stock prices.
Arm Holdings conducted the largest IPO in 2023. At the time of writing, the company's market capitalisation reached 65.25 billion USD.
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