Adobe signals delay in AI earnings boost, impacting annual outlook

The news: Adobe has posted a weaker than anticipated outlook for 2024, out of step with expectations that its AI investments would boost results.

The numbers: Adobe’s outlook for fiscal 2024 earnings per share is USD17.60 to USD18 ($26.30 to $26.90), on USD21.3 billion to USD21.5 billion in revenue. Analysts previously polled by LSEG had expected a higher USD18 in adjusted earnings per share and USD21.73 billion in revenue.

The context: Adobe has been focusing on its AI strategy during 2023, launching its updated AI model, Firefly, and completing a USD20 billion acquisition of Figma to bolster its AI plans in October. Investors had anticipated a stronger performance outlook in 2024 on the back of these moves, and shares in the company slid over 6% during trading Thursday.

The company is also shouldering an investigation from the US Federal Trade Commission into its subscription cancellation practices, which could result in a settlement requiring significant monetary costs or penalties.