The US software company Adobe has missed expectations for its artificial intelligence (AI) programs with its plans for the new financial year.
The Californians are planning an increase in sales to around 21.4 billion US dollars (19.8 billion euros) for the current 2023/24 financial year, as they announced on Wednesday after the US stock market closed. Analysts had hoped for more here. In addition, the group could face high penalties in connection with the cancellation of subscriptions. The news was poorly received on the financial market.
In US trading on Thursday, Adobe shares temporarily lost 5.92 percent to $587.32. However, the stock had gained almost 86 percent in the year to date by Wednesday evening.
Analysts were somewhat more optimistic not only in terms of sales, but also in terms of profits. Adobe management expects adjusted earnings per share of $17.60 to $18. Analysts had previously assumed an average of $18.
However, CEO Shantanu Narayen wanted nothing to do with the gloomy outlook. There is nothing on the horizon “that would tell us that we are not in for another great year,” the manager said in a conference call with analysts. According to CFO Dan Durn, Adobe sets its business forecasts cautiously – then there is a chance to do better. Several industry experts also pointed out that Adobe is known for its conservative annual targets.
Investors hope that the software company can benefit early from the hype surrounding the new AI technology with its generative AI functions such as automatically generated image and media content. In the Adobe programs popular with media designers and graphic artists, users can use text instructions to create or change certain content. The company has released new versions of its software and raised prices in recent months.
In the last fiscal year that ended December 1, Adobe increased sales by ten percent to $19.4 billion. The bottom line was that the company made a profit of $5.4 billion, an increase of 14 percent compared to the previous year.
Meanwhile, Adobe faces potentially costly trouble with the United States Consumer Protection Agency. According to another statement from the company, the Federal Trade Commission has been investigating Adobe’s subscription cancellation practices for more than a year. Settlement of this matter could result in significant costs or penalties and could have a material impact on the Company’s financial results and operations, it said.
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