Adobe Inc (NASDAQ:ADBE) stock fell 5.51% (As on December 14, 11:25:00 AM UTC-4, Source: Google Finance) after the company posted a lighter-than-expected forecast for 2024. Net income increased 26% to $1.48 billion, up from $1.18 billion, in the year-ago quarter. Also in the quarter, Adobe’s Firefly generative artificial intelligence features became available in the Photoshop and Illustrator programs for Creative Cloud subscribers. An enterprise version of the Firefly web app that can create images based on a few words of human input also became available. Adobe remains focused on closing the $20 billion Figma acquisition it announced in September 2022. The company said it disagrees with findings from regulators in the European Commission and the U.K. and that it’s responding to regulators. The U.S. Department of Justice has also been looking into the planned deal.
In addition, Adobe said in a separate regulatory filing that it has been working with the U.S. Federal Trade Commission on an inquiry over cancellation and subscription practices in connection with the Restore Online Shoppers’ Confidence Act. The FTC told the company in November that it had the authority to enter into consent negotiations to see if a settlement could be reached, according to the filing. Adobe sees its past behavior as lawful and said the matter might have a material effect on financial performance.
ADBE in the fourth quarter of FY 23 has reported the adjusted earnings per share of $4.27, beating the analysts’ estimates for the adjusted earnings per share of $4.14, according to consensus estimates from LSEG, formerly known as Refinitiv. The company had reported the adjusted revenue growth of 12 percent to $5.05 billion in the fourth quarter of FY 23, beating the analysts’ estimates for revenue of $5.03 billion. Cash flows from operations were $1.60 billion. Remaining Performance Obligations (“RPO”) exiting the quarter were $17.22 billion.
Moreover, Digital Media segment revenue was $3.72 billion, which represents 13 percent year-over-year growth or 14 percent in constant currency. Creative revenue grew to $3.00 billion, representing 12 percent year-over-year growth or 14 percent in constant currency. Document Cloud revenue was $721 million, representing 16 percent year-over-year growth or 17 percent in constant currency.
Adobe called for fiscal 2024 earnings per share to be in the range of $17.60 to $18 on $ $21.3 billion to $21.5 billion in revenue. Analysts polled by LSEG had expected $18 in adjusted earnings per share and $21.73 billion in revenue.