Adobe forecasts fiscal 2025 revenue below estimates on slower subscription spending

PHOTOSHOP maker Adobe forecast fiscal 2025 revenue below Wall Street estimates on Wednesday (Dec 11), indicating the company’s investments to weave artificial intelligence (AI) into its software applications were taking longer to bear fruit.

Shares of the San Jose, California-based company fell over 8 per cent in extended trading.

The company forecast revenue between US$23.3 billion and US$23.55 billion compared with estimates of US$23.78 billion, according to data compiled by LSEG.

Adobe expects a headwind of around US$200 million to its fiscal 2025 revenue as a result of foreign exchange volatility and the company’s shift towards subscriptions.

The company is making significant investments in AI-driven image and video generation technologies in response to the growing competition from well-capitalised startups such as Stability AI and Midjourney.

While Adobe projected strong growth for the second half of the year in June, its forecast on Wednesday indicated the company was still struggling to monetise its AI push.

The company forecasts first-quarter revenue between US$5.63 billion and US$5.68 billion, below estimates of US$5.73 billion. REUTERS