Adobe expects $440 million in new recurring creative business in the current quarter, below the $459 million expected by analysts. This likely disappointed investors who were hoping for a greater financial impact from the new AI features. The company's shares hit a low of $503.80 in extended trading after closing at $570.45 in New York. Despite a 77% jump in 2023, the stock has dipped 4.4% since the start of the year, due to fears about competition from startups like OpenAI and established rivals like Canva Inc.
Key takeaways:
- Adobe Inc. shares dropped about 10% in extended trading due to a weak sales outlook for the current quarter, with revenue projected to be between $5.25 billion and $5.3 billion, slightly below analysts' expectations.
- The company is facing competition from new AI-focused startups, but has responded by integrating its proprietary AI model, Firefly, into top products like Photoshop and Illustrator.
- Adobe expects $440 million in new recurring creative business in the current quarter, below the $459 million expected by analysts, which has disappointed investors looking for a greater financial impact from the new AI features.
- The company announced a new $25 billion share buyback program and is beginning to monetize new AI features, with plans to increase these efforts in the second half of the year.