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Business News/ Companies / News/  Adobe embroiled in anti-trust issues, forecasts revenue below estimates
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Adobe embroiled in anti-trust issues, forecasts revenue below estimates

The San Jose, California-based company said in a regulatory filing that since June 2022 it has been cooperating with the FTC in response to a civil investigative demand seeking information regarding its disclosure and subscription cancellation practices.

Adobe logo is seen on a smartphone in this illustration (REUTERS/Dado Ruvic/Illustration/File Photo)Premium
Adobe logo is seen on a smartphone in this illustration (REUTERS/Dado Ruvic/Illustration/File Photo)

Photoshop maker Adobe said on Wednesday it was facing regulatory scrutiny over its subscription models and forecast annual and quarterly revenue below estimates, sending its shares down more than 5% in after-hours trading.

The San Jose, California-based company said in a regulatory filing that since June 2022 it has been cooperating with the Federal Trade Commission (FTC) in response to a civil investigative demand seeking information regarding its disclosure and subscription cancellation practices.

"In November 2023, the FTC staff asserted that they had the authority to enter into consent negotiations to determine if a settlement regarding their investigation of these issues could be reached," Adobe said, adding that it is currently holding discussions with the FTC.

The company added that this matter could involve significant monetary costs or penalties and could have a material impact on its financial results and operations.

Adobe's $20 billion buyout of cloud-based designer platform Figma has also been probed by Britain's competition regulator.

The company said on Wednesday the European Commission has provided a preliminary statement of objections and the Competition and Markets Authority has issued provisional findings of competition concerns.

"We strongly disagree with these findings and are responding to the respective regulators," Adobe said.

The company forecast revenue in the range of $5.10 billion to $5.15 billion for the current quarter. Analysts on average were expecting $5.19 billion, according to LSEG data.

Its revenue forecast for fiscal 2024 was in the range of $21.30 billion to $21.50 billion, which also came in below estimates.

Individuals and firms have cut down on spending as they grapple with sticky inflation and higher interest rates.

The company hiked prices for some of its offerings starting in November, further hurting demand.

The company reported a fourth-quarter adjusted profit of $4.27 per share, compared with estimates of $4.14.

Its revenue for the three months ended Dec. 1 was marginally above estimates.

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This story has been published from a wire agency feed without modifications to the text.

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Published: 14 Dec 2023, 06:40 AM IST
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