Adobe predicted fiscal 2025 revenue between $23.30 billion and $23.55 billion, falling short of Wall Street’s $23.78 billion estimate. Shares dropped nearly 9% in extended trading as the company’s AI-driven investments faced slower-than-expected returns.
The San Jose-based firm is battling competition from startups like Stability AI and Midjourney while expanding into AI image and video generation technologies. Despite its efforts, analysts noted a lack of clear AI monetization.
“Adobe’s continued lack of AI monetization makes it increasingly difficult to pick them as a clear AI winner,” said Charlie Miner, an analyst at Third Bridge.
While Adobe’s recent innovations, such as AI-generated image tools, are gaining traction, foreign exchange volatility and a transition to subscription models are expected to trim fiscal 2025 revenue by $200 million.
In Q4, Adobe beat expectations with an 11% revenue increase to $5.61 billion and adjusted earnings of $4.81 per share, surpassing $4.66 estimates.