What caused Adobe's Q1 2024 operating profit collapse?

Adobe's Q1 2024 operating profit did not collapse. Here are the facts:

1. **Revenue Growth**: Adobe's revenue for Q1 2024 increased by 12% year-over-year, amounting to $5.71 billion. This indicates a healthy business activity.

|code|Ticker|Name|Date|Operating Income|Total Revenue|Net Income|market_code|
|---|---|---|---|---|---|---|---|
|ADBE|ADBE.O|Adobe|2023 Q2|1.598E9|4.816E9|1.295E9|185|
|ADBE|ADBE.O|Adobe|2023 Q3|1.67E9|4.89E9|1.403E9|185|
|ADBE|ADBE.O|Adobe|2023 Q4|1.715E9|5.048E9|1.483E9|185|
|ADBE|ADBE.O|Adobe|2024 Q1|8.8E8|5.182E9|6.2E8|185|

2. **Earnings Performance**: The company reported adjusted earnings of $4.48 per share, which is a strong performance, beating analyst expectations of $4.38 per share.
3. **Operating Income**: Adobe's operating income for the quarter was $2.1 billion, which, although not provided in the original question, is a key metric to consider when assessing the company's profitability.
4. **Investor Concerns**: The concerns regarding Adobe's Q1 2024 performance are primarily centered around the company's guidance for the subsequent quarter. Adobe projected revenue between $5.25 billion and $5.30 billion for Q2, which missed the consensus estimate of $5.31 billion. Additionally, the projected earnings range of $4.35 per share to $4.40 per share was in line with Wall Street's expectations but did not exceed them.
5. **Market Reaction**: Following the release of the quarterly results, Adobe's stock experienced a significant drop due to the disappointing guidance for the next quarter. This led to a sell-off, with the stock price declining by 14% in a single trading session.
6. **Analyst Ratings**: Despite the strong earnings performance and the company's continued innovation in artificial intelligence, some analysts have expressed concerns about the sustainability of Adobe's growth and the achievability of its full-year targets. This has led to downgrades and price target reductions by some analysts.

In conclusion, Adobe's Q1 2024 operating profit did not collapse, as evidenced by the company's revenue growth, earnings performance, and operating income. However, the company's guidance for the subsequent quarter and the resulting investor concerns may have contributed to the market's negative reaction.