Adobe Forecast Misses Views, Renewing Fears About AI Impact
TL;DR
Adobe expects fourth-quarter revenue of $6.80 billion to $6.85 billion, with the midpoint narrowly missing the $6.85 billion analysts had forecast. The outlook adds to concerns that AI upstarts are eating into the software maker's business, even though third-quarter results beat estimates and annual recurring revenue from Adobe's AI-first products rose more than 150 percent to over $650 million. Shares fell about 2 percent in after-hours trading.
Nauti's Take
Adobe's AI products are growing fast, and more than $650 million in recurring revenue shows that Firefly and similar tools hold real potential for creative professionals. The problem sits in the core business: cheap AI tools put pressure on pricing for classic creative software, and the guidance hints that growth there is slowing.
For designers and agencies that means more room to negotiate licenses, while investors face the question of whether AI can offset the decline.
Sources