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The stock of Adobe (ADBE) is down 11% after the maker of creative software products issued forward guidance that disappointed analysts and investors.
The Silicon Valley-based company whose products include Photoshop, Illustrator, and PDF documents, reported fiscal fourth-quarter earnings per share (EPS) of $4.81 U.S., which beat Wall Street estimates of $4.67 U.S. a share.
Revenue in the quarter totaled $5.61 billion U.S., which also beat Wall Street forecasts that called for $5.54 billion U.S.
Digital media at Adobe, the company’s biggest business unit, generated revenue of $4.20 billion U.S. in the quarter, an increase of 12% from the previous year.
Additionally, Adobe’s monthly active users grew 25% year-over-year to about 650 million in the quarter.
However, despite beating expectations on the top and bottom lines, Adobe’s stock is sinking after the company issued lacklustre forward guidance.
For its current fiscal first quarter, Adobe forecast revenue of $5.63 billion U.S. to $5.68 billion U.S., which was below the consensus outlook of $5.72 billion U.S.
The company also said that it expects full-year sales of $23.3 billion U.S. to $23.6 billion U.S., which is also below the $23.8 billion U.S. forecast on Wall Street.
Analysts and investors remain concerned about the competitive threats Adobe faces, particularly from generative artificial intelligence (A.I.) which can produce many of the images created by the company’s suite of software products.
Prior to today (Dec. 12), Adobe’s stock had declined 5% this year to trade at $549.93 U.S. per share.
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