Adobe’s getting lassoed down by a weak outlook and disappointing AI monetization progress

Adobe has put a lot of time and effort into monetizing its AI product lineup in recent years, but investors still aren’t liking what they’re seeing.

Shares of the creative software giant were down more than 10% in Thursday morning trading following its earnings report, filed after the bell on Wednesday. It’s Adobe shares’ worst day of the year and since — would you look at that — its last earnings report in December.

Wall Street was bummed out by news that the company pulled in just $125 million in annual recurring revenue from AI. Though Adobe says it expects that number to double by the end of the fiscal year, it currently makes up just 2% of the company’s overall revenue of $5.71 billion.

If the stock price is any indication, it appears that cash isn’t generating fast enough for investors, who were also let down by a mediocre revenue outlook and quarterly earnings guidance that fell below expectations.

Last month, the Photoshop maker pushed out new paid subscriptions tied specifically to Firefly, its generative-AI tool that it says has been used to generate more than 20 billion images and assets. After reportedly paying up to $3 per minute for videos to train its AI, the company now charges about $0.50 per AI video, according to Bloomberg reporting.