Creative software leader Adobe has projected current-quarter revenue slightly below Wall Street expectations, doing little to ease investor concerns about intensifying competition from artificial intelligence startups. Shares slipped in after-hours trading following Thursday's earnings release.

The company forecast sales between $6.8 billion and $6.85 billion for the quarter ending in November, with the midpoint falling just short of the $6.85 billion analyst consensus. Adjusted earnings per share are expected to land between $6.30 and $6.35, compared to the average analyst estimate of $6.30.

Adobe's suite of tools, including Photoshop, has long been a staple for creative and marketing professionals. Yet the rise of generative AI, which has dramatically lowered the barrier to producing visual content, has fueled worries that the company's software business could face disruption.

Heading into the earnings announcement, Adobe's stock had already dropped 29% year-to-date. Last week, the company announced that Anil Chakravarthy will take over as chief executive on December 1.

Analyst Grace Harmon of Emarketer noted that the softer revenue outlook heightens scrutiny on how Adobe intends to stay competitive as AI reshapes the creative software landscape, and what strategic direction the incoming CEO will chart.

Adobe, for its part, maintains that it stands to benefit from the AI transition. The company said annualized recurring revenue from AI-centric products grew more than 150% last quarter, and monthly active users have surpassed 1 billion.

For the quarter ended August 28, Adobe posted revenue of $6.76 billion, up 13% year over year and ahead of the $6.7 billion analysts had expected. Adjusted earnings per share came in at $6.13, also beating the $6.08 consensus forecast.