Adobe (NASDAQ: ADBE) stock fell over 4% in pre-market trading Thursday after the company issued a full-year outlook that underwhelmed investors, even though its first-quarter earnings beat analyst expectations.
The software company reported record quarterly revenue of $5.71 billion, up 10% from the same period a year ago. This figure came in above the consensus estimate from Visible Alpha. Adjusted earnings rose to $2.22 billion ($5.08 per share) from $2.05 billion ($4.48 per share) last year—also ahead of Wall Street estimates.
Growth came largely from Adobe’s Digital Media segment, including Creative Cloud subscriptions. The unit posted $4.23 billion in revenue, an 11% year-over-year increase, beating analyst forecasts.
CEO Shantanu Narayen said Adobe (NASDAQ: ADBE) is “well-positioned to capitalize on the acceleration of the creative economy driven by AI.” The earnings release comes just before next week’s Adobe Summit, where analysts expect the company to share updates on its generative AI progress and metrics.
Adobe’s full-year guidance, however, failed to impress investors. The company maintained its revenue forecast at $23.3 billion to $23.55 billion and adjusted earnings per share (EPS) at $20.20 to $20.50. The midpoint of both ranges fell short of analyst consensus, prompting the after-hours stock decline.
