Adobe CEO Shantanu Narayen speaks during an interview with CNBC on the ground of the Recent York Stock Exchange on Feb. 20, 2024.
Brendan Mcdermid | Reuters
Adobe shares tumbled as much as 11% in prolonged trading Thursday after the design software maker issued strong fiscal first-quarter results but got here up barely short on quarterly revenue guidance.
Here’s how the corporate did, compared with estimates from analysts polled by LSEG, formerly often known as Refinitiv:
- Earnings per share:Â $4.48 adjusted vs. $4.38 expected
- Revenue:Â $5.18 billion vs. $5.14 billion expected
Adobe’s revenue grew 11% 12 months over 12 months within the quarter, which ended March 1, in line with a statement. Net income decreased to $620 million, or $1.36 per share, from $1.25 billion, or $2.71 per share, in the identical quarter a 12 months ago.
Throughout the quarter, Adobe abandoned its $20 billion acquisition of design software startup Figma after U.K. regulators found competitive concerns. The corporate paid Figma a $1 billion termination fee.
Adobe announced an early version of a man-made intelligence assistant for its Reader and Acrobat apps.
Meanwhile, in February, OpenAI announced Sora, which might generate a video based on an individual’s written description. Adobe will work with OpenAI around Sora, David Wadhwani, president of Adobe’s digital media business, said on the earnings call.
“You are going to see us obviously developing our own model,” he said. “You are going to see others developing a model. All that creates a tailwind, since the more people generate video clips, the more they should edit that content.”
Adobe sees fiscal second-quarter earnings of $4.35 to $4.40 per share on an adjusted basis, with $5.25 billion to $5.30 billion in revenue. The center of the range implies 9% growth. Analysts polled by LSEG had been on the lookout for $4.38 in earnings per share and $5.31 billion in revenue.
Product enhancements within the Adobe Express app, the Firefly Services AI offering and the brand new Acrobat assistant should result in acceleration in digital media annualized recurring revenue within the second half of the 12 months, Wadhwani said.
The corporate said it was setting aside $25 billion for share buybacks.
Leaving out the after-hours movement, Adobe shares have fallen 4% thus far this 12 months, while the S&P 500 index has gained 8% in the course of the same period.
