Sales in the period ending in May will be $5.77 billion to $5.82 billion, the company said Wednesday in a statement. Analysts, on average, estimated $5.8 billion. Profit, excluding some items, will be $4.95 a share to $5 a share, compared with the average projection of $5.
Adobe, the top maker of software for creative professionals, has been incorporating its AI model, Firefly, into apps like Photoshop and Premiere. Investors have debated whether generative AI will make the products more lucrative and indispensable, or fuel the rise of AI-native competitors. During the quarter, Adobe announced it would charge about 50 cents per AI-generated video and separately announced price increases for some of its applications.
Shares declined about 5% in extended trading after closing at $438.60 in New York. Adobe’s stock has slipped 24% over the past 12 months. Investor sentiment has primarily been driven by views of Adobe’s AI, “which has become increasingly interconnected with concerns around competition,” wrote Matthew Swanson, an analyst at RBC Capital Markets.
Adobe is scheduled to host an event for investors next week in which the company is expected to provide additional long-range financial information and more details of its AI strategy.
Fiscal first-quarter revenue increased 10% to $5.71 billion, topping the $5.66 billion anticipated by Wall Street. Remaining performance obligations, a metric of future sales, were $19.7 billion, compared with analysts’ average estimate of $19.8 billion, according to data compiled by Bloomberg.
The digital media unit, which includes Adobe’s flagship creative and document-processing software, posted a 11% increase in sales to $4.23 billion. Revenue from the unit that includes marketing and analytics software rose 10% to $1.41 billion.
“Adobe’s success over the next decade will be driven by customer-focused innovation and new offerings for creators, marketing professionals, business professionals and consumers,” Chief Executive Officer Shantanu Narayen said in the statement. “Adobe is well-positioned to capitalize on the acceleration of the creative economy driven by AI and we are reaffirming our FY2025 financial targets.”
In December, Adobe gave a fiscal year outlook for revenue of $23.3 billion to $23.6 billion and adjusted profit of $20.20 a share to $20.50 a share.
The company also said it would change the way it reports subscription revenue, and would now announce the data in two groups: “business professionals and consumers” and “creative and marketing professionals.”
