Shares of Adobe Systems (NASDAQ:ADBE) are down 10 per cent in premarket Thursday trading after the company reported FQ3 earnings and stated it is going to acquire design platform Figma for USD 20 billion in cash and stock.

The company reported Q3 EPS (Earnings per share) of USD 3.40. Revenue came in line at USD 4.43 billion. For this quarter, the company expects to see EPS of USD 3.50 on revenue of USD 4.52 billion.

Moreover, the company announced it would buy Figma, which offers web design products, for USD 20 billion in cash and stock.
Adobe’s chairman and CEO said that the company’s greatness had been ingrained in its ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions.

It is expected that Adobe is spending a lot of money to expand its annual recurring revenue, which now stands at only 3 per cent of the overall revenue. Considering the fact that Figma is one of the more potent competitors facing Adobe, it will be interesting to see how regulators approach this deal.