Adobe predicts that the company's annual sales in 2023 will be lower than expected: exchange rate changes affect growth
On the morning of October 19, Beijing time, Adobe, the world's largest maker of creative design software, reportedly reiterated its forecast for the current quarter, while the company expects revenue in 2023 to be slightly lower than analysts expected, easing some investors' concerns that economic uncertainty will hamper demand.
The company said it expected the exchange rate and a strong dollar to have a 4 per cent impact on sales growth in 2023 and reduced its annual recurrent revenue from digital media by about $700m. More than 40 per cent of Adobe's sales come from overseas. Shantanu Narayen, the company's chief executive, said in a report to analysts on Tuesday that economic conditions had affected the forecast.
"there has been a marked decline in chief executive confidence," Narayen said, citing customer concerns about US inflation, a potential recession and the conflict between Russia and Ukraine.
Adobe said the forecast does not include product design competitor Figma, which Adobe announced last month to buy for $20 billion. Analysts were surprised by the purchase price, the highest ever for a privately owned software company, and a sign that competitors are making a big push, exceeding expectations. Figma's shares have fallen 21% since the deal was announced, closing at $292.98 in new York on Tuesday.
Sales for the current fiscal year will be about $19.2 billion, the company said in a statement. Profits excluding some projects will be as high as $15.45 per share in the period ending November 2023. On average, analysts expect the company to earn $15.53 a share on revenue of $19.8 billion.
The company also confirmed that its fourth-quarter sales and earnings (excluding some items) are expected to be $3.50 per share, or about $4.5 billion. Shares rose about 3.2% in after-hours trading after the news.
The lower-than-expected fiscal year forecast for Adobe's digital media division, including its iconic creative software, reinforced the argument that the acquisition of Figma "shows a sense of urgency to counter the slowing growth of the creative cloud business", the media wrote.
Adobe is looking to expand its web-based product line to attract more leisure users and product designers. In recent years, this market has attracted companies such as Canva, Lightricks and Figma. At Adobe's annual product launch earlier on Tuesday, the company improved its flagship Photoshop image editor, adding more collaboration tools, artificial intelligence and network features.
Narayen promoted the release of Adobe Express, a browser-based solution for fast media editing, at the launch. The company says the service has 20 million registered users since its launch. "We may be a little late," Narayen, "but it's right here, and it's great."
