Adobe earnings are under pressure due to the strong dollar

Major design software maker Adobe Inc. reaffirmed its forecast for the current quarter, even though expected revenue for 2023 came in below analysts' estimates.

The strong dollar will dampen sales growth by 4% in 2023 and cause the company's annual digital media revenues to fall by about $700 million. In general, Adobe makes more than 40% of its sales overseas. 

Presenting his report to analysts Tuesday, CEO Shantanu Narayen said the projected figures were lowered because of the economic situation.

However, Adobe commented that profits from online service Figma Inc. are not included in this forecast. As we know, last month Adobe bought a rival company for $20 billion. That purchase was the most expensive in the history of Adobe, which certainly caused surprise among analysts. Speculation began to emerge that the competitor was aiming for something more than previously thought.

Sales in fiscal year 2023 will be about $19,2 billion. Earnings, excluding some items, will be $15,45 per share for the period ending in November 2023. Analysts on average forecast earnings of $15,53 per share on revenue of $19,8 billion.

The company also reiterated its sales forecast for the current quarter of about $4,5 billion, and earnings, barring some nuance, will be $3,50 per share.

Adobe's fiscal year outlook for its digital media segment falls short of estimates. According to Bloomberg Intelligence's Anurag Rana, the Figma acquisition demonstrates an urgent need to counter the slowing growth of its Creative Cloud division.

The company also reiterated its sales forecast for the current quarter of about $4,5 billion and earnings, barring some nuance, of $3,50 per share.

Adobe's fiscal year outlook for its digital media segment falls short of estimates. According to Bloomberg Intelligence's Anurag Rana, the Figma acquisition demonstrates an urgent need to counter the slowing growth of its Creative Cloud division.

The company is looking to expand its list of online services to attract more users and product designers. Thus, in recent years, the market has particularly gravitated toward companies such as Canva Inc., Lightricks Ltd. and Figma. During Adobe's annual product conference, the company unveiled changes for their most popular image editor, Photoshop. The new version of their flagship program added more collaboration tools, where they also added artificial intelligence features and many other utilities.

During the event, Narayen promoted the release of Adobe Express, the company's browser-based solution for fast media editing. The company said the service has had 20 million registrations since launch. Nareyen commented that the appearance of their application among other programs may have been overdue, but the fact of launching a new product is still a significant event for Adobe.