Adobe forecasts second-quarter sales lower than analysts’ expectations, blaming stiff competition and poor demand for its artificial intelligence-integrated photography, illustration, and video apps.
Adobe (ADBE.O), which opened a new tab, predicted second-quarter sales lower than analysts’ projections on Thursday, citing fierce competition and lackluster demand for its artificial intelligence-integrated photography, illustration, and video applications in a harsh economy.
The company’s stock dropped more than 10% after the bell.
Companies and people have moved their focus to cost-cutting amid rising interest rates and a challenging economy, putting pressure on growth at the Photoshop software producer, which has been investing in AI tools to entice new customers.
Adobe has integrated AI technologies into its products, including the document reader Acrobat, Photoshop, and Premiere Pro. The business said last month that it has released a new AI helper for Reader and Acrobat.
The company also faces competition from startups such as Stability AI and Midjourney, which provide AI services comparable to Adobe, such as image generation via text inputs.
According to LSEG data, Adobe expects second-quarter revenue of $5.25 billion to $5.30 billion, which is lower than analysts’ expectations of $5.31 billion.
The company’s first-quarter revenue increased by more than 11% to $5.18 billion, exceeding expectations of $5.14 billion.
On Thursday, Adobe unveiled a fresh stock repurchase program for $25 billion.
On an adjusted basis, the business expected second-quarter earnings per share to range between $4.35 and $4.40, with the midpoint meeting forecasts.
Adobe halted its $20 billion bid for cloud-based designer platform Figma in December after encountering multiple regulatory obstacles.
Adobe’s first-quarter operating expenses grew to over $3.69 billion, including a $1 billion termination fee related to the Figma deal.
Also read: Women in the technology industry is constantly increasing, says Rajita Bhatnagar
Do Follow: CIO News LinkedIn Account | CIO News Facebook | CIO News Youtube | CIO News Twitter
About us:
CIO News, a proprietary of Mercadeo, produces award-winning content and resources for IT leaders across any industry through print articles and recorded video interviews on topics in the technology sector such as Digital Transformation, Artificial Intelligence (AI), Machine Learning (ML), Cloud, Robotics, Cyber-security, Data, Analytics, SOC, SASE, among other technology topics.
