Adobe CEO Shantanu Narayen speaks during an interview with CNBC on the ground of the New York Stock Exchange on February 20, 2024.
Brendan Mcdermid | Reuters
Adobe Shares fell as much as 11% in prolonged trading on Thursday after the design software maker reported strong first-quarter results but barely missed revenue forecast for the quarter.
Here’s how the corporate performed in comparison with estimates from analysts surveyed by LSEG, formerly often called Refinitiv:
- Earnings per share: $4.48 adjusted vs. $4.38 expected
- Revenue: $5.18 billion versus expected $5.14 billion
Adobe’s revenue rose 11% 12 months over 12 months within the quarter ended March 1, in response to a opinion. Net income fell to $620 million, or $1.36 per share, from $1.25 billion, or $2.71 per share, within the year-ago quarter.
During the quarter, Adobe abandoned its $20 billion acquisition of design software startup Figma after U.K. regulators flagged competition concerns. The company paid Figma a $1 billion termination fee.
Adobe recently announced an early version of a man-made intelligence assistant for its Reader and Acrobat apps.
Meanwhile, OpenAI announced Sora in February, which might create 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 decision.
“You’ll see us obviously develop our own model,” he said. “You will see others develop a model. All of this is a tailwind because the more people create video clips, the more they have to edit that content.”
Adobe expects second-quarter adjusted earnings of $4.35 to $4.40 per share and revenue of $5.25 billion to $5.30 billion. The middle of the range represents 9% growth. Analysts surveyed by LSEG had expected earnings per share of $4.38 and revenue of $5.31 billion.
Product improvements within the Adobe Express app, Firefly Services’ AI offering and the brand new Acrobat Assistant are expected to guide to an acceleration in annualized recurring digital media revenue within the second half of the 12 months, Wadhwani said.
The company said it was committing $25 billion to share buybacks.
Excluding after-hours moves, Adobe shares are down 4% thus far this 12 months, while the S&P 500 index is up 8% over the identical period.
