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Adobe Shares Drop as AI Monetisation Concerns Grow

  • tech360.tv
  • Mar 13
  • 2 min read

Adobe forecasted second-quarter revenue in line with Wall Street expectations on Wednesday, raising concerns about the slower monetisation of its artificial intelligence offerings. Shares fell more than 4% in extended trading.


White "Adobe" logo on a vibrant red background, presenting a bold and modern design.
Credit: ADOBE

The company expects revenue between USD 5.77 billion and USD 5.82 billion for the quarter, aligning with analyst estimates compiled by LSEG. Adobe reaffirmed its annual revenue forecast, with its CEO stating that the company is well positioned to benefit from the AI-driven creative economy.


Investors and analysts are closely monitoring Adobe’s ability to accelerate the monetisation of its generative AI products. The company has been investing heavily in AI-powered editing tools to differentiate itself from competitors.


"I think guidance is rough, and I think people are questioning, is the AI monetisation quick enough?" said Parker Snook, senior research analyst at M Science.


Adobe has been integrating AI into its software to enhance products such as Photoshop, which is widely used by professionals. The company reported USD 125 million in annual recurring revenue (ARR) from AI and add-on offerings at the end of the quarter. CFO Dan Durn stated that Adobe expects to double this ARR figure within the next three quarters as it exits fiscal 2025.


"While investors are still concerned about the transition to AI, as Adobe continues to deliver new products, we expect those concerns to be replaced by excitement," said DA Davidson analyst Gil Luria.


Adobe reported first-quarter revenue of USD 5.71 billion, surpassing estimates of USD 5.66 billion. Digital media revenue reached USD 4.23 billion, exceeding analyst expectations of USD 4.19 billion.


On an adjusted basis, Adobe earned USD 5.08 per share, higher than the estimated USD 4.97 per share.

 

  • Adobe forecasted second-quarter revenue between USD 5.77 billion and USD 5.82 billion.

  • Shares fell more than 4% due to concerns over AI monetisation.

  • The company aims to double its AI-related annual recurring revenue by fiscal 2025.


Source: REUTERS

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