Adobe Reports Earnings: Strong User Growth but Missed Guidance
Adobe (NASDAQ:ADBE) reported third-quarter earnings after the market close on Sept. 10, showing strong user growth driven by its freemium AI tools like Adobe Firefly and Express. Monthly active users of creative products reached over 100 million in Q3, up 70% year-over-year. Revenue came in at $6.76 billion, a 13% increase from the prior year, with diluted earnings per share at $4.62. However, Adobe's fourth-quarter revenue guidance of $6.8 to $6.85 billion fell short of analyst expectations, leading to an after-hours stock drop of nearly 5%. The company emphasized its long-term strategy of acquiring users through free tools before monetizing them later — a model similar to Facebook’s early growth approach. Despite strong AI product adoption and ARR (annualized recurring revenue) reaching $27.5 billion with over 150% year-over-year growth in AI-first products, investors remain skeptical due to the guidance miss.
Topics: Adobe AI Creative Cloud generative AI stock performance