Adobe Inc (NASDAQ:ADBE) reported record fourth-quarter results for fiscal 2024, delivering strong revenue growth and exceeding Wall Street expectations, but shares fell about 8% in after-hours trading as the company issued a fiscal 2025 revenue forecast below analyst estimates.
Revenue for the quarter rose 11% year-over-year to $5.6 billion, beating consensus estimates by $70 million, while non-GAAP earnings per share were $4.81, surpassing expectations by $0.14.
The company highlighted a 16% increase in remaining performance obligations to $20 billion, signaling robust demand for its cloud-based services.
Adobe’s subscription-driven business continues to deliver, with Creative Cloud annualized recurring revenue growing 10% to $13.9 billion and Document Cloud ARR surging 23% to $3.5 billion.
CEO Shantanu Narayen said the results reflected strong demand across its product suite, noting, “Adobe delivered record FY24 revenue, demonstrating strong demand and the mission-critical role Creative Cloud, Document Cloud, and Experience Cloud play in fueling the AI economy.”
Despite its strong performance, Adobe’s fiscal 2025 guidance disappointed investors. The company expects revenue of approximately $23.4 billion for the year, below analysts’ expectations of $23.8 billion. Management attributed the softer outlook to a $200 million foreign exchange headwind and challenges tied to its subscription transition.
Narayen sought to reassure investors about Adobe’s long-term growth prospects, pointing to the impact of artificial intelligence on its products. “Our AI-driven innovation across Creative Cloud, Document Cloud, and Experience Cloud continues to fuel the digital economy and position Adobe for sustainable growth,” he said.
Adobe closed fiscal 2024 with record annual revenue of $21.51 billion and noted strong cash flow performance. However, the combination of a cautious outlook and macroeconomic pressures weighed on investor sentiment, pushing shares sharply lower in extended trading.