Investors sent shares of Adobe Inc. into a tailspin today after the maker of Photoshop could offer only a light forecast for the coming quarter and full year.

The company said it’s looking for fiscal first-quarter revenue of between $5.63 billion and $5.68 billion, which is some way below Wall Street’s consensus estimate of $5.72 billion.

In terms of fiscal 2025 revenue, Adobe is guiding for a range of $23.3 billion to $23.6 billion, trailing analysts’ forecast of $23.8 billion.

Adobe’s stock fell more than 9% after-hours, completely erasing a slight gain it had made earlier during the regular trading session.

The soft guidance took the sheen off of what were otherwise some pretty solid results in the company’s fiscal 2024 fourth quarter. The company reported earnings before certain costs such as stock compensation of $4.81 per share, easily beating the Street’s estimate of $4.67 per share. Revenue for the period rose 11%, to $5.61 billion, surpassing expectations of $5.54 billion.

Founded back in 1982, Adobe is an iconic name in the technology industry, best known for its creative software products like Photoshop, Acrobat and Premiere Pro, which are widely used by visual and video artists.

Although it’s one of the world’s most recognizable software companies, it has come under considerable pressure in recent months, with high interest rates and a sluggish global economy forcing enterprises to cut back on software spending.

In addition, Adobe faces growing competition from rivals in the artificial intelligence industry, such as Stability AI Inc., OpenAI and Midjourney Inc., which all provide access to tools that can generate professional-looking images from text prompts.

Adobe has attempted to hit back at those rivals with its own AI tools. It has embedded its proprietary image generating model Firefly into many of its products, including Photoshop. The company also announced a new, AI-powered video creation tool during its annual user conference in October, which comes with its Premiere video editing application.

Third Bridge analyst Charlie Miner said the problem is not so much the lack of AI offerings on Adobe’s side, but rather its seeming inability to make money from them effectively.

“The market’s initial fears about AI disruption have subsided, but Adobe’s continue lack of AI monetization makes it increasingly difficult to pick the company as a clear AI winner,” Miner said. “Investors are increasingly frustrated with its ‘adopt-first, monetize-later’ AI strategy. With significant capital already invested and limited returns, it’s hard not to be concerned that it’s falling behind.”

In a conference call with analysts today, David Wadhwani, president of Adobe’s digital media business, appeared to respond to those concerns, saying the company is planning to launch a new, “higher-priced Firefly offering” that includes video models. But he didn’t say when that offering will become available.

The digital media segment is Adobe’s largest business unit, and it generated $4.2 billion in sales during the quarter, up 12% from a year earlier. Within the segment, Document Cloud revenue surged 17%, to $843 million, while Creative revenue rose 10%, to $3.3 billion.

Looking to the new fiscal year, Adobe said it’s expecting net new annual recurring revenue in the digital media business to grow 11%, in-line with Wall Street’s targets. Adobe Chief Financial Officer Dan Durn said the company’s “ongoing strategy to introduce new, tiered subscription offerings and add-ons” has been factored into that guidance.

Adobe’s other main business segment, Digital Experience, saw revenue increase 10%, to $1.4 billion.

Adobe Chair and Chief Executive Shantanu Narayen (pictured) hailed the company’s record-breaking revenue in fiscal 2024, saying this highlights the critical role its software is playing in fueling the AI economy. “Our highly differentiated technology platforms, rapid pace of innovation and the integration of our cloud positions us for a great year ahead,” he insisted.

Investors are less than optimistic, however. With today’s after-hours drop, Adobe’s stock is down 8% in the year to date, lagging behind many of its peers and also industry benchmarks.

Photo: Fortune Live Media/Flickr