Adobe shares slip 10% on soft sales forecast


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Adobe CEO Shantanu Narayen speaks during an interview with CNBC on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., February 20, 2024. 
Brendan Mcdermid | Reuters

Adobe shares tumbled as much as 9% in extended trading on Thursday after the design software maker issued strong fiscal first-quarter results but came up slightly short on quarterly revenue guidance.
Here’s how the company did, compared with estimates from analysts polled by LSEG:

  • Earnings per share: $4.48, adjusted, vs. $4.38 expected
  • Revenue: $5.18 billion, vs. $5.14 billion expected

Adobe’s revenue grew 11% year over year in the quarter, which ended on March 1, according to a statement. Net income decreased to $620 million, or $1.36 per share, from $1.25 billion, or $2.71 per share, in the same quarter a year ago.

During the quarter Adobe abandoned its $20 billion acquisition of design software startup Figma after United Kingdom regulators found competitive concerns. The company paid Figma a $1 billion termination fee. And Adobe announced an early version of an artificial intelligence assistant for its Reader and Acrobat apps.

Adobe sees fiscal second-quarter earnings of 4.35 to $4.40 per share on an adjusted basis, with $5.25 billion to $5.30 billion in revenue. The middle of the range implies 9% growth. Analysts polled by LSEG had been looking for $4.38 per share and $5.31 billion in revenue.

The company said it was setting aside $25 billion for share buybacks.

Leaving out the after-hours movement, Adobe shares have fallen 4% so far this year, while the S&P 500 index has gained 8% over the same time period.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

WATCH: Adobe CEO Shantanu Narayen on new AI tools: For us, it’s about driving ‘responsible’ innovation

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