Adobe Drops on Weak Forecast Fueled by AI Competition Fears
Adobe's stock dropped 10.5% in extended trading after giving a weak outlook for sales in the current quarter. The market is concerned about increasing competition from AI-focused startups, which poses a competitive threat to Adobe.
The following is a summary of the Adobe Inc. (ADBE) Q1 2024 Earnings:
Financial Performance
*Adobe reported Q1 revenue of $5.18 billion, a 12% increase YoY
*GAAP earnings per share for the quarter was $1.36, and non-GAAP earnings per share was $4.48, representing 18% YoY growth.
*Adobe achieved a net new Digital Media ARR of $432 million and revenue of $3.82 billion in Q1, marking a 13% growth YoY.
*Adobe achieved $3.07 billion in revenue for Creative Cloud, 12% growth YoY with net new Creative Cloud ARR of $289 million.
*The Experience Cloud business generated subscription revenue of $1.16 billion, representing YoY growth of 12%.
*The company delivered Q1 record revenue of $5.18 billion, representing an 11% YoY growth, achieved Digital Media revenue of $3.82 billion, Digital Experience revenue of $1.29 billion.
Business Progress
*Adobe continued to focus on creativity for document productivity, and powering digital businesses through Adobe Creative Cloud, Document Cloud, and Experience Cloud.
*Adobe is expanding its range of AI services and products, with notable updates to Adobe Photoshop, Illustrator, Express, Acrobat, and the Experience Cloud.
*Adobe announced the release of Acrobat AI Assistant, integrating generative AI into Reader and Acrobat workflows to enhance document interaction.
*The introduction of Behance Pro empowers members to build their brand and find opportunities, driving ARR acceleration.
*Adobe GenStudio, a generative AI-first application, will allow marketers to plan, create, store, deliver, and measure marketing content more effectively.
*Adobe plans to showcase product innovations at the Adobe Summit in Las Vegas and expects continued business momentum and leadership into Q2 and beyond.
*The company announced a new $25 billion share repurchase program, showing its confidence and commitment to returning capital to its shareholders.
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