Adobe Stock Tumbles Despite Record Q1 Growth, Outlook Falls Short

Adobe's Q1 Beat Fails to Lift Stock, Soft Guidance Overshadows Q1 Beat

Mar 13, 2025

Summary

Adobe shares fell 5% pre-market after strong Q1 results were overshadowed by a cautionary forward outlook.

Adobe (ADBE, Financial) shares lost 5% of its value in pre‑market trading on Thursday after the San Jose-based software giant posted first‑quarter fiscal 2025 results that beat estimates but offered an outlook slightly below market expectations.

For the quarter ended Feb. 28, 2025, Adobe reported adjusted EPS of $5.08, surpassing the consensus estimate of $4.97. Revenue reached $5.71 billion, a 10% year‑over‑year increase, slightly above the $5.66 billion forecast. Despite these strong figures, investor sentiment soured due to softer forward guidance.

CFO Dan Durn stated, "Our continued innovation, particularly with our AI‑first add‑on solutions, drove a record Q1 with over $125 million in ending ARR."

Regarding Q2, Adobe projects EPS around 4.95 to $5.00 and revenue ranging from $5.77 billion to $5.82 billion. Guidance for the full fiscal year expects EPS of $20.20 - $20.50 and revenue of $23.3 billion—$23.55 billion.

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