Not only that, but Adobe reported $2.5 billion in positive free cash flow for the quarter, twice last year's $1.2 billion, and 36% more than reported net income. By these metrics, the quarter looked exceptionally strong, and earnings quality at Adobe was very good.

Adobe’s decline was mainly due to its disappointing forward guidance. Q2 revenue forecast came in at $5.77–$5.82 billion vs. the consensus of $5.8 billion. Investors were likely spooked as the lower end of the guidance still implies a chance of Adobe missing expectations.

Adobe is expected to report fiscal 2025 first-quarter results after the closing bell Wednesday, with analysts mostly bullish leading into the report and next week's Adobe Summit.

What Happened? Shares of creative software maker Adobe (NASDAQ:ADBE) fell 13.2% in the morning session after the company reported underwhelming fourth-quarter (fiscal Q1 2025) results, as remaining performance obligations (RPO - leading growth indicator) fell short of analysts' estimates.

Shares in the creative software company were sliding Thursday. The economic slowdown could hit its bottom line.

Operator Good day, and welcome to the Q1 FY '25 Adobe earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Steve Day, SVP, DX, CFO and corporate finance,