Adobe projected its second-quarter revenue to range between $5.77 billion and $5.82 billion, aligning with Wall Street estimates, according to data from LSEG. Despite this, the company’s stock declined by over 4% in after-hours trading as investors weighed concerns about the slower monetization of its artificial intelligence offerings in an increasingly competitive landscape.
Reaffirming its annual revenue outlook, Adobe’s CEO expressed confidence in the company’s ability to leverage AI-driven growth within the creative economy. The company has been actively incorporating AI enhancements into its software suite, including Photoshop, to differentiate itself from emerging competitors.
Adobe reported an annual recurring revenue (ARR) of $125 million for its AI and add-on services by the end of the quarter. CFO Dan Durn stated that this figure is expected to double by the conclusion of fiscal 2025. Analysts remain focused on how quickly Adobe can capitalize on AI, with DA Davidson’s Gil Luria noting that while concerns persist over AI-driven transitions, continued innovation could shift investor sentiment positively.
For the first quarter, Adobe posted revenue of $5.71 billion, surpassing the projected $5.66 billion. Digital media revenue reached $4.23 billion, exceeding analyst expectations of $4.19 billion. On an adjusted basis, earnings per share stood at $5.08, outperforming forecasts of $4.97.
