Adobe reported results for its fourth-quarter of the fiscal year that exceeded anticipations, yet its guidance for the upcoming fiscal year lagged behind projections. The organization indicated that it is expecting a declaration from the U.S. Department of Justice concerning its pending acquisition of Figma shortly. potential
Shares of Adobe dropped more than 6% in after-hours trading on Wednesday following the software maker's light fiscal 2024 outlook. The company reported fourth-quarter earnings of $4.27 per share, adjusted, which beat consensus estimates from LSEG, formerly known as Refinitiv, of $4.14 per share. Revenue for the quarter totaled $5.05 billion, compared with the expected $5.03 billion, and was up almost 12% from the year-ago period. Net income for the quarter rose to $1.48 billion, or $3.23 per share, from $1.18 billion, or $2.53 per share, in the prior-year period.
Adobe projected earnings per share of $17.60 to $18 and revenue of $21.3 billion to $21.5 billion for the upcoming fiscal year, which failed to meet Wall Street expectations of $18 in adjusted earnings per share and $21.73 billion in revenue. The software maker is being cautious with their spending, according to the company's President of the Experience Business, Anil Chakravarthy. Furthermore, CEO Shantanu Narayen commented on questions about the Creative Cloud subscription services, and said he is very confident about the growth potential of the business, while acknowledging some pricing impacts.
In the quarter, Firefly generative artificial intelligence features were released in Photoshop and Illustrator for Creative Cloud subscribers, while an Enterprise version of the Firefly web app became available. Adobe also announced in September that they are acquiring Figa for a total of $20 billion, though they acknowledge findings from European Commission and U.K. regulators and are in talks with the U.S. Department of Justice as well. The guidance does not factor in an impact from Figma. As previously reported, the company is also working with the Federal Trade Commission on an inquiry related to Restore Online Shoppers’ Confidence Act.
Despite the after-hours dip, Adobe's stock has outpaced the S&P 500 by gaining 86% this year.
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