Adobe, a leading developer of applications for image, video, and document processing, has issued a reserved revenue forecast for the current quarter. Investors had higher expectations, anticipating that the company’s advancements in artificial intelligence would drive stronger growth.
By the end of May, Adobe expects revenue to range between $5.77 billion and $5.82 billion, slightly below analysts’ projection of $5.8 billion. The company forecasts earnings per share (EPS) between $4.95 and $5.00, also falling short of the $5.00 consensus estimate. Following this announcement, Adobe’s stock declined by approximately 3% in after-hours trading. Over the past year, its share price has dropped by 24%, largely due to investor concerns about rising competition in AI-driven image and video processing software.
AI Integration and Financial Performance
Adobe continues to integrate its Firefly AI model into flagship applications like Photoshop and Premiere. Recently, the company introduced a fee of 50 cents per AI-generated video and increased subscription prices for certain applications. Despite these changes, Adobe’s quarterly revenue grew 10% to $5.71 billion, surpassing analysts’ expectations. The company reported a backlog of $19.7 billion, just shy of the anticipated $19.8 billion.
Revenue from Adobe’s digital content segment increased by 11% to $4.23 billion, while marketing and analytics software revenue grew 10% to $1.41 billion. For the full fiscal year, Adobe projects revenue between $23.3 billion and $23.6 billion, with adjusted EPS between $20.2 billion and $20.5 billion. NIX Solutions adds that the company will adjust its reporting structure for subscription revenue, dividing it into corporate and individual segments.
While Adobe remains a key player in creative software, competition in AI-powered tools continues to shape its market position. We’ll keep you updated as more developments unfold.