Key Takeaways

• Adobe reported fiscal third-quarter earnings and revenue that topped expectations.

• However, its outlook for the fourth quarter missed analysts' estimates.

• Adobe shares tumbled in extended trading Thursday following the company's earnings release.
  

Adobe (ADBE) shares tumbled in extended trading Thursday after the company’s fiscal fourth-quarter outlook fell short of analysts' expectations.

The software company said it anticipates revenue of between $5.50 billion and $5.55 billion for the fourth quarter, below estimates compiled by Visible Alpha. It projected diluted earnings per share (EPS) of $3.58 to $3.63, with analysts expecting the higher end of that range.

Outlook Overshadows Strong Q3 Results

Adobe's weaker-than-expected outlook overshadowed an otherwise strong report, with third-quarter results that topped estimates. Adobe posted third-quarter revenue of $5.41 billion, an 11% jump year-over-year, and EPS of $3.76, up from $3.05 a year earlier.

Adobe’s Digital Media arm, which includes Creative Cloud subscriptions, posted record net-new annualized recurring revenue (ARR) of $504 million, an 8% year-over-year rise and also above analysts' projections.

"Adobe's record Q3 performance is a testament to our relentless innovation and commitment to delivering value to our customers,” Adobe CEO Shantanu Narayen said in a release, noting Adobe's “advancements in AI across Creative Cloud, Document Cloud and Experience Cloud.”

Adobe shares fell more than 9% in extended trading Thursday following the company's earnings report.

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