Adobe shares slid 10% in extended trading on Thursday after the company’s fourth-quarter revenue guidance fell short of Wall Street expectations, despite reporting better-than-expected results for the third quarter.
For the quarter ending in August, Adobe exceeded analyst estimates in both revenue and earnings. Here’s how the company performed:
- Revenue: $5.41 billion, beating the expected $5.37 billion
- Earnings per share (EPS): $4.65 (adjusted), exceeding the $4.53 estimate
However, the stock's decline came after Adobe issued its fourth-quarter guidance, forecasting earnings per share between $4.63 and $4.68 on revenue of $5.5 billion to $5.55 billion. This fell short of analyst predictions, with the consensus expecting $4.67 EPS on $5.61 billion in sales.
For the third quarter, Adobe reported a net income of $1.68 billion, or $3.76 per diluted share, up from $1.40 billion, or $3.05 per share, during the same period last year.
Adobe’s largest business segment, Digital Media, which includes its Creative Cloud suite featuring generative AI tools like Firefly, saw sales rise 11% year-over-year to $4 billion.
In total, subscription revenue for the quarter reached $5.18 billion, reflecting an 11% increase from the previous year.
