Adobe Stock Falls as Revenue Forecast Misses Expectations

Adobe Stock Falls as Revenue Forecast Misses Expectations

Adobe (ADBE) shares dropped 8% in after-hours trading on Wednesday after the company issued revenue forecasts that fell short of analyst expectations.

The software giant projected 2025 revenue of $23.3 billion to $23.55 billion, below the $23.77 billion consensus estimate from Visible Alpha. Its forecast for first-quarter revenue, between $5.63 billion and $5.68 billion, also missed expectations.

For the fiscal fourth quarter, Adobe reported revenue of $5.61 billion, an 11% increase year-over-year and slightly ahead of analyst predictions. Net income rose to $1.68 billion, or $3.79 per share, compared to $1.48 billion, or $3.23 per share, a year ago, exceeding projections.

Adobe’s Digital Media segment, which includes its Creative Cloud subscriptions, added $578 million in net-new annualized recurring revenue, a 2% increase year-over-year and above analyst forecasts.

Despite the strong quarterly performance, the weaker-than-expected outlook weighed heavily on investor sentiment. Adobe’s shares have declined nearly 8% year-to-date as of Wednesday’s close.