Canva Cuts Revenue Growth Forecast Due to AI Costs

Canva reduced its expected revenue growth rate by one-third to 20% following unexpectedly high costs associated with delivering generative AI features. CEO Melanie Perkins reported that while user demand for AI tools significantly exceeded expectations, the underlying economics required adjustment to support a broad rollout.

Since the April launch of Canva AI 2.0, the company has reduced the cost per task by nearly 90%. However, these gains were offset by user behavior, as customers are creating three times as many designs, continuing to pressure the business model. In response, the company slowed its AI rollout to rebuild architecture and reduce unit costs.

Analysts suggest Canva's decision to limit the AI rollout is an effort to protect profitability as the company evaluates a potential initial public offering, which may occur next year.