(Bloomberg) — Adobe Inc. raised its annual profit outlook, and projected strong future sales for its creative products, suggesting its customers are adopting the company’s new artificial intelligence-based tools. The shares jumped more than 14% in extended trading.
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Profit, excluding some items, will be as much as $18.20 a share in the fiscal year ending in January, the company said Thursday in a statement. Analysts, on average, estimated $18.02. Adobe previously gave a fiscal-year profit forecast of as much as $18 a share.
A closely watched metric of new creative software business — digital media net new annual recurring revenue — will be $460 million in the current quarter, compared with the average estimate of $435.2 million.
The company expects an acceleration in new creative business through the rest of the fiscal year, said Chief Financial Officer Dan Durn in prepared remarks.
The longtime leader in software for creative arts has faced a fresh wave of investor anxiety that generative AI will cut into its market. Application software peers like Salesforce Inc., Workday Inc. and ServiceNow Inc. have confronted similar concerns in recent weeks after reporting slowing demand. The results signal that Adobe’s efforts to incorporate AI features into its products are gaining support among customers as the company battles smaller rivals, including startups focused on the emerging technology.
The shares hit a high of $528.56 after closing at $458.74 in New York. After gaining 77% in 2023, the stock has dipped 23% since the start of the year.
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