Adobe Gives Sales Outlook That Fails to Convince AI Skeptics
(Bloomberg) -- Adobe Inc. gave a sales outlook for the current quarter that topped analysts' estimates, but investors remain skeptical that the leader in creative software can outduel AI-focused upstarts.
Sales will be about $5.88 billion to $5.93 billion in the period ending in August, the company said Thursday in a statement. Analysts, on average, estimated $5.88 billion. Profit, excluding some items, will be $5.15 a share to $5.20 a share, compared with the average projection of $5.11.
Adobe has become a central focus of investors debating whether artificial intelligence tools will disrupt traditional software industry leaders. The company's quarterly results have served as a report card every three months on the competition. Design applications like those from Canva Inc. and image-creation tools from AI firm Midjourney Inc. have gained steam while Adobe has weaved generative AI tools through its products like Photoshop. In February, it introduced separate subscriptions for its AI video generator, trying to compete with similar tools from rivals including OpenAI and Runway.
'Somehow Adobe has been snagged as an AI loser,' said Gil Luria, an analyst at DA Davidson, in an interview on Bloomberg TV. 'We think that's a misunderstanding of the technology,' he added.
Adobe's family of AI models, called Firefly, has been used to generate more than 24 billion pieces of content, Chief Financial Officer Dan Durn said in remarks prepared for a conference call after the results. That's up from 20 billion in March. Adobe had said then that it expected $250 million in annual recurring revenue from AI products.
The shares were little changed in extended trading after closing at $413.68 in New York. The stock has dropped 7% this year.
Fiscal second-quarter revenue increased 11% to $5.87 billion, compared with an average analyst estimate of $5.8 billion. Profit, excluding some items, was $5.06 per share, while Wall Street anticipated $4.98.
The digital media unit, which includes Adobe's flagship creative and document-processing software, posted an 11% increase in sales to $4.35 billion. Annual recurring revenue for the closely watched segment was $18.1 billion, in line with estimates. Revenue from the unit that includes marketing and analytics software rose 10% to $1.46 billion.
'Adobe's AI innovation is transforming industries enabling individuals and enterprises to achieve unprecedented levels of creativity,' Adobe Chief Executive Shantanu Narayen said in the statement.
(Updates with comments from analyst in the fourth paragraph.)
More stories like this are available on bloomberg.com
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
an hour ago
- Time of India
Microsoft's Copilot Vision brings Google's Circle to Search-like functionality to Windows users
Microsoft has launched Copilot Vision for Windows, bringing screen-reading AI capabilities, much similar to Google's Circle to Search feature. The new tool, available free to all US users on Windows 10 and 11, can analyze any app or window you share with it, offering real-time guidance and insights. Tired of too many ads? go ad free now Unlike previous versions that only worked within web browsers, Copilot Vision now works with any app, file, or window you choose to share. Users can share up to two apps simultaneously, letting the AI connect information between different programs. Whether you're stuck in a game, editing photos in Photoshop, or planning events from your calendar, Copilot Vision acts as your digital assistant. The standout feature called "Highlights" goes beyond basic screen reading. Ask Copilot "show me how" for any task, and it will literally highlight where to click and what steps to follow within your apps. Imagine having a personal tutor pointing out exactly which buttons to press in complex software. Microsoft learned from past controversies with features like Recall. Copilot Vision requires explicit permission for each app you want to share – it's completely opt-in. The AI can only see what you actively choose to show it, putting users firmly in control of their privacy. Getting started is simple: open the Copilot app, click the glasses icon, select which windows to share, and start asking questions. The AI can summarize documents, explain error messages, or even help draft email replies based on what's on your screen. The feature is currently limited to the US, with plans to expand to other non-European countries soon.
Economic Times
2 hours ago
- Economic Times
Adobe shares slump 7% as investors skeptical of quicker AI-adoption returns
Adobe's stock experienced a 7% drop due to investor apprehension regarding the timeline for AI integration to yield profits, despite an increased annual revenue forecast. Concerns about competitive pressures and the monetization of AI initiatives have led to lowered price targets from several brokerages. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Adobe's shares dropped 7% in early trading on Friday as investors' concern that the company's AI adoption into its software tools could take longer to fetch returns, overshadowed a raised annual revenue forecast "(We see) increasing concerns surrounding competitive pressures and a longer time horizon to reach notable AI monetization," said Angelo Zino, senior equity analyst at CFRA San Jose, California-based creative software veteran is relied on by creatives for its tools including Photoshop and Premiere Pro The company said in April that it would add AI models from OpenAI and Google to Firefly, its generative AI tool allows users to create and edit images and videos for commercial purposes through basic text prompts without facing copyright challenges."While guidance was raised and management remains positive around demand generation, it feels like it will take more time to prove out these (AI) initiatives and quiet concerns of competition around GenAI," RBC analysts said in a now expects full-year 2025 revenue between $23.50 billion and $23.60 billion, up from its prior estimates of $23.30 billion to $23.55 least five brokerages cut their price target on the Adobe stock following the second-quarter session's losses, the stock has fallen around 13% so far this company's 12-month forward price-to-earnings ratio stands at 18.88, compared with Autodesk's 29.16.
Time of India
2 hours ago
- Time of India
Adobe shares slump 7% as investors skeptical of quicker AI-adoption returns
Adobe's shares dropped 7% in early trading on Friday as investors' concern that the company's AI adoption into its software tools could take longer to fetch returns, overshadowed a raised annual revenue forecast . "(We see) increasing concerns surrounding competitive pressures and a longer time horizon to reach notable AI monetization," said Angelo Zino, senior equity analyst at CFRA Research. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Bank Owned Properties For Sale In Gunung Batu (Prices May Surprise You) Foreclosed Homes | Search ads Search Now Undo The San Jose, California-based creative software veteran is relied on by creatives for its tools including Photoshop and Premiere Pro . Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. The company said in April that it would add AI models from OpenAI and Google to Firefly, its generative AI tool. The tool allows users to create and edit images and videos for commercial purposes through basic text prompts without facing copyright challenges. Live Events "While guidance was raised and management remains positive around demand generation, it feels like it will take more time to prove out these (AI) initiatives and quiet concerns of competition around GenAI," RBC analysts said in a note. Adobe now expects full-year 2025 revenue between $23.50 billion and $23.60 billion, up from its prior estimates of $23.30 billion to $23.55 billion. At least five brokerages cut their price target on the Adobe stock following the second-quarter results. Including session's losses, the stock has fallen around 13% so far this year. The company's 12-month forward price-to-earnings ratio stands at 18.88, compared with Autodesk's 29.16.
