On Thursday, Adobe’s stock lost more than 10% of its value after the company announced its fiscal first-quarter and full-year 2022 revenue projections, which were lower than analysts’ estimates. The drop marks the second time the creative design software company has suffered such a monumental one-day loss in more than ten years.
The only other drop that surpasses this one happened in March last year when the COVID-19 pandemic was just kicking in and sending shockwaves across public markets.
Adobe’s Q4 was decent, to say the least, as it reported $3.20 per share on revenue of $4.11 billion, a 20% increase from the previous year.
A finicky time
The company’s net profit from the quarter only hit $1.23 billion. On the other hand, Wall Street has been expecting earnings of $3.20 per share on sales of $4.09 billion. It was a better-than-expected outcome, though.
Adobe reported that its growth drivers are primarily the Digital Media unit, where sales went up 21% from a year ago to reach $3.01 billion.
However, concerns about inflation and interest rates translate to investors putting this year behind them to focus more on 2022, which meant Adobe doesn’t have good news on that front either.
The company reported that it expects Q1 revenue to reach just $4.23 billion, behind the Wall Street forecast of $4.34 billion by a considerable margin.
The full-year forecast was not any better. The company announced an expected $17.9 billion in sales, compared to analyst expectations of $18.16 billion.
Adobe may be doing well in digital design software but faces stiff competition in its other businesses, as many alternative tools crop up.