ADBE: Adobe Stock Falls 9.2% as Weak Guidance Outweighs Earnings and Revenue Beat

For the November quarter, Adobe issued guidance that disappointed investors who had hoped to see more AI thrown into the mix.

• Adobe stock ADBE tumbled 9.2% in after-hours trading Thursday following the company’s earnings report that contained weak forward-looking guidance. For the August quarter, the software maker picked up a satisfactory profit of $4.65 a share, going above the forecast of $4.53. Revenue also beat expectations with $5.4 billion against estimates for $5.37 billion.
• The creator of Photoshop rained on its own parade by issuing forward guidance, which failed to uphold the optimistic narrative. For the November quarter, Adobe predicts revenue of $5.50 billion to $5.55 billion with earnings per share of $4.63 to $4.68. These numbers undershot Wall Street’s projections of $5.6 billion in revenue and $4.67 in earnings per share.
• Investors were hoping to get more clues into the software giant’s AI plans. Adobe is set to roll out its gen AI-powered video creation tool Adobe Firefly Video Model, which would initially be available in a limited series. Shares of Adobe are up a mere 1% on the year, largely missing out on the powerful AI run that has swept technology stocks.