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Adobe Posts $5.71B Revenue and $5.08 EPS in Q1, Shares Drop 5% on Weak Q2 Outlook and AI Concerns

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Updated Mar 13, 2025, 03:17 AM

Adobe Inc. reported its first-quarter fiscal year 2025 earnings, surpassing Wall Street's expectations with revenue of $5.71 billion, up 10% year-over-year, and adjusted earnings per share of $5.08, beating the consensus estimate of $4.97. The company's digital media unit, which includes its flagship creative and document-processing software, saw an 11% increase in sales to $4.23 billion, while the digital experience unit, encompassing marketing and analytics software, reported a 10% rise in revenue to $1.41 billion. Adobe has been incorporating its AI model, Firefly, into apps like Photoshop and Premiere, and announced it would charge about 50 cents per AI-generated video and separately announced price increases for some of its applications. Despite the strong first-quarter performance, Adobe provided a disappointing outlook for the second quarter, forecasting revenue between $5.77 billion and $5.82 billion, slightly below the average analyst estimate of $5.8 billion. Adjusted earnings per share for the second quarter are expected to be between $4.95 and $5.00, compared to the consensus of $5.00. Adobe's shares fell about 5% in extended trading following the announcement, reflecting investor concerns over the company's growth prospects and its ability to monetize new generative artificial intelligence features. The company's stock has slipped 24% over the past 12 months. Adobe is scheduled to host an event for investors next week to provide additional long-range financial information and more details of its AI strategy. 'Adobe’s success over the next decade will be driven by customer-focused innovation and new offerings for creators, marketing professionals, business professionals and consumers,' said Chief Executive Officer Shantanu Narayen. The company reaffirmed its fiscal year 2025 targets, projecting revenue between $23.3 billion and $23.55 billion and adjusted profit between $20.20 and $20.50 per share.

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Sources

techmeme.com(2)bloomberg.com(2)russellrhoads.substack.com(2)marketwatch.com

Techmeme

@Techmeme

UiPath shares fell over 15% after the company projected FY 2026 sales of $1.525B to $1.53B, vs. $1.58B estimates; PATH is down 51.6% over the past 12 months (@billwpeters / MarketWatch) https://t.co/0qnpnlb01B https://t.co/0n9Z8RdtOm https://t.co/ZOzeer2dpR

CNBC-TV18

@CNBCTV18Live

#Adobe shares fall 5% in extended trade on tepid revenue outlook, focus on #AI tools https://t.co/W53VRre0kE

Markets Today

@marketsday

$ADBE #Adobe Q1'25 Earnings Highlights 🔹 Adj. EPS: $5.08 (Est. $4.97) 🟢 🔹 Revenue: $5.71B (Est. $5.66B) 🟢 +10% YoY Q2'25 Guidance 🔹 Revenue: $5.77B - $5.82B (Est. $5.80B) 😑 🔹 Adj. EPS: $4.95 - $5.00 (Est. $5.00) 😑 FY25 Guidance (Reaffirmed) 🔹 Revenue: $23.3B - $23.55B…