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Investing.com - Adobe raised its full-year guidance after reporting better-than-expected fiscal second-quarter revenue, as its core digital media business continued to ride an artificial intelligence-led demand wave.
But shares in the company edged slightly lower in premarket trading on Friday. Analysts at Vital Knowledge flagged that while investors "should come away relatively happy" with Adobe (NASDAQ:ADBE)’s returns, its outlook "isn’t nearly as impressive" as cloud-computing group Oracle (NYSE:ORCL), which reported earlier this week.
For its 2025 fiscal year, Adobe upgraded its guidance for adjusted per-share income to between $20.50 to $20.70 on revenue of $23.50 billion to $23.60 billion, up from a prior range for adjusted EPS of $20.20 to $20.50, and revenue of $23.30 billion to $23.55 billion.
Digital media segment revenue is now expected to come in at between $17.45 billion and $17.50 billion, up from $17.25 billion to $17.40 billion previously.
For its fiscal third quarter, adjusted EPS was seen at between $5.15 and $5.20 per share on revenue of $5.875 billion to $5.925 billion, compared with Wall Street estimates for $5.11 and $5.88 billion, respectively.
Meahwhile, the Photoshop-owner reported second-quarter revenue of $5.87 billion, topping analysts’ average estimates of $5.8 billion.
Analysts at Jefferies said in a note to clients that Adobe had displayed "ongoing progress" in its AI ambitions, adding that annual recurring revenues from the business are "on track to beat" the firm’s $250 million target.
"While AI isn’t yet material, the business is trending positively and management remains confident in double-digit growth," the strategists said. Still, they flagged that the outlook may not be "enough to appease" investors with a bearish view of the stock.
(Yasin Ebrahim contributed reporting.)