Adobe forecasts downbeat quarterly earnings on cautious tech spending
Sept 12 (Reuters) -Photoshop maker Adobe ADBE.O forecast fourth-quarter earnings below analysts' estimates on Thursday, signaling stiff competition and soft demand for its AI-integrated editing tools amid challenging economic conditions.
Shares of the company fell 9.2% in extended trading.
High interest rates and a tough economy have led enterprises and individuals to focus on cutting costs, putting pressure on Adobe's growth.
Founded in 1982, Adobe is one of the largest suppliers of software for visual and video artists, which include household names such as Acrobat, Photoshop and Premiere Pro.
The San Jose, California-based company also faces competition from startups such as Stability AI and Midjourney, which provide similar AI services - including generating images from text prompts.
Adobe expects revenue for the fourth quarter to be between $5.50 billion and $5.55 billion, compared with LSEG estimates of $5.61 billion.
Excluding items, it expects quarterly profit to be between $4.63 and $4.68 per share, compared with estimates of $4.67 per share.
Adobe is set to launch a new generative AI-powered video creation tool called Adobe Firefly Video Model in a limited series later this year, which is expected to garner the attention of creative professionals.
Revenue for the quarter ended Aug. 30 was $5.41 billion, above LSEG estimates of $5.37 billion.
Operating expenses for the third quarter were $2.86 billion, compared with $2.61 billion a year earlier.
Reporting by Harshita Mary Varghese in Bengaluru; Editing by Krishna Chandra Eluri
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
