FILE PHOTO: Adobe logo is seen in this illustration created on February 16, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
Dec 10 (Reuters) - Adobe forecast fiscal 2026 revenue and profit above Wall Street expectations on Wednesday, signaling strong demand for the Photoshop maker's design tools and increasing monetization for its artificial intelligence offerings.
Since the launch of ChatGPT in 2022, Adobe has made heavy bets on generative AI with its Firefly tool, which can be integrated across the company's Creative Cloudsuite to create images and videos, in an attempt to draw users in.
While Adobe's products have become a staple for students, creatives and enterprises, the company is grappling with rising competition in the industry it dominates, with AI proliferation allowing rivals to rapidly grow their businesses and win contracts.
Adobe is seeing strong growth in AI adoption, with monthly active users for its freemium offerings increasing 35% year over year to over 70 million, CFO Dan Durn told Reuters.
"We're seeing significant strength in Creative Cloud Pro, Photoshop, Lightroom," he said, adding that natively embedding generative AI into these products is paying off.
In its push into the ad market, last month, Adobe said it would acquire Semrush for $1.9 billion to help marketers better understand how their brands are seen by online consumers through searches on websites and GenAI bots such as ChatGPT and Gemini.
Adobe also said that from fiscal 2026, it would rejig some forecast and reporting segments to focus on subscription revenue from various customer groups as well as year-ending annual recurring revenue.
The company expectsannual revenue between $25.90 billion and $26.10 billion, compared with estimates of $25.87 billion, according to data compiled by LSEG.
On an adjusted basis, Adobe expects annual earnings per share of between $23.30 and $23.50, above estimates of $23.34 per share.
It reported fourth-quarter revenue of $6.19 billion, beating estimates of $6.11 billion.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Alan Barona)
