On Thursday evening after the U.S. stock market closed, there was excitement at Adobe as the creative software company presented its results for the third fiscal quarter of 2024. Despite solid figures and record revenue of $5.41 billion, surpassing analysts' expectations of $5.37 billion, the subdued outlook for the fourth quarter caused a tempered mood among investors.

The earnings per share of $4.65 exceeded the estimated $4.53, highlighting Adobe's operational strength. However, operating expenses rose to $2.86 billion compared to $2.61 billion in the previous year, indicating that the company is also facing higher costs amid rising demand.

For the upcoming fourth quarter, Adobe expects revenue between $5.50 billion and $5.55 billion, below the forecast of $5.61 billion. The anticipated earnings per share is expected to be between $4.63 and $4.68, reflecting market uncertainties. Analysts had an average expectation of $4.67 per share.

The modest expectations reflect the impact of current economic uncertainties and high interest rates, which force businesses and consumers to reduce their spending. Above all, the weak demand for Adobe's AI-integrated editing tools, such as image and video processing, dampens growth potential.

Additionally, the pressure from new competitors such as Stability AI and Midjourney, which also offer AI-based tools for creative editing, is increasing. While Adobe hopes to attract creative professionals with the introduction of the new Firefly Video Model - an AI-powered video creation tool - it remains to be seen how significantly these innovations will impact revenue.