BENGALURU - Adobe forecast second-quarter revenue below analysts’ estimates on March 14 following stiff competition and weak demand for its artificial intelligence-integrated photography, illustration and video software.

Companies and individuals have shifted focus to cutting costs amid high interest rates and a tough economy, pressuring growth at the software maker that has been investing in AI tools to attract more users.

Adobe has incorporated AI features into its offerings such as document reader Acrobat, Photoshop and Premiere Pro.

The company said in February it has introduced a new AI assistant for Reader and Acrobat.

The company also faces competition from start-ups such as Stability AI and Midjourney, which offer AI services similar to Adobe such as generating images using text prompts.

Adobe forecast second-quarter revenue between US$5.25 billion (S$7.02 billion) and US$5.3 billion, below analysts’ estimates of US$5.31 billion, according to London Stock Exchange Group data.

For the first quarter, the company’s revenue rose more than 11 per cent to US$5.18 billion, beating estimates of US$5.14 billion.

Adobe also announced a new US$25 billion stock repurchase programme on March 14.

On an adjusted basis, the company forecast second-quarter earnings per share between US$4.35 and US$4.40, the midpoint of which was in line with expectations.

Adobe had terminated its US$20 billion deal for cloud-based designer platform Figma in December after hitting several regulatory roadblocks.

Adobe’s first-quarter operating expenses, which included a termination fee of US$1 billion related to the Figma deal, increased to about US$3.69 billion. REUTERS