Adobe Inc. is set to announce its fiscal third-quarter earnings, with expectations of earnings per share between $4.63 and $4.68 and revenue between $5.5 billion and $5.55 billion.

For the quarter ending August 30, Adobe reported a record revenue of $5.41 billion, surpassing the consensus estimate of $5.37 billion.

CEO Shantanu Narayen credited this strong performance to Adobe's commitment to innovation and delivering customer value.

The company anticipates a 12% increase in net income for the third quarter, projecting it to reach $1.57 billion, or $3.51 per share.

Despite a positive outlook for the second half of 2024 driven by generative AI monetization, Adobe's stock fell over 9% in after-hours trading due to a weaker-than-expected forecast.

Adobe has consistently exceeded revenue estimates for six consecutive quarters and earnings estimates for ten consecutive quarters.

The company attributes its growth to strong demand for artificial intelligence and other factors.

However, concerns have arisen from decelerating subscription growth and soft guidance for future performance.

Operating expenses for the third quarter increased to $2.86 billion, up from $2.61 billion in the previous year.

Adobe anticipates exceeding its expectations for annual net new annual recurring revenue (NNARR), indicating healthy subscription sign-ups.

Analysts remain cautiously optimistic, with Jefferies maintaining a Buy rating and highlighting strong fiscal third-quarter performance despite concerns about the fourth quarter outlook.

Overall, while Adobe's recent performance has been strong, the market's reaction reflects underlying concerns about future growth and profitability.