{"slug": "canva-cuts-growth-forecast-after-revealing-high-cost-of-ai", "title": "Canva cuts growth forecast after revealing high cost of AI", "summary": "Canva cut its annual revenue forecast to about 20% growth after revealing the high cost of running its AI suite, with CEO Melanie Perkins saying the average cost of serving an AI task was too high. The company, valued at US$42bn, reported a 25% revenue increase to US$921.9m in the June quarter but missed its initial 30% growth target, and has since reduced AI serving costs by nearly 90% by building its own models.", "body_md": "# Canva cuts growth forecast after revealing high cost of AI\n\n[ Canva](https://www.theaustralian.com.au/business/canvas-financial-accounts-reveal-1bn-losses-over-three-years-amid-claims-of-cashflow-profitability/news-story/d69bea26817baa8da1f4c6c53258515a) has cut its annual revenue forecast after conceding it could not afford to run\n\n**it spent the year building.**\n\n[the artificial intelligence suite](https://www.theaustralian.com.au/business/technology/inside-canvas-biggest-evolution-as-it-bets-its-future-on-artificial-intelligence/news-story/92ec2b20e2276568e716cdfb0b372239)The Sydney-based visual communications darling’s revenue soared 25% to US$921.9m ($1.32bn) in the June quarter but says it will miss the full year guidance it set at the beginning of the year.\n\nCanva, which is valued at $US42bn, now expects growth of about 20% for the full year. It had previously expected 30% growth.\n\n“While this is strong growth at our scale, we want to acknowledge it is below the ambitious goal we set at the beginning of the year,” chief executive and co-founder Melanie Perkins wrote in a letter to shareholders.\n\nPerkins attributed the miss to a “deliberate decision to get the economics right for Canva’s unique scale before broadly distributing Canva AI”.\n\n“Rather than broadly rolling out a product before the underlying economics were ready, we decided to slow the rollout while we rebuilt the architecture, reduced unit costs and strengthened the business model,” Perkins wrote.\n\n“This slowed our distribution and impacted our near-term growth, but it also enabled some of the most important technical advances in Canva’s history and put us in a much stronger position to scale AI sustainably.”\n\nThe downgrade is the first material growth reversal disclosed by one of Australia’s most valuable private technology companies, and arrives while investors ** await a much-hyped public listing**.\n\n**Building its own model**\n\nThe company ** launched Canva AI 2.0 in April** and Perkins said that the “average cost of serving an AI task was too high”, saying it was relying too much on other companies’ models. For the past three months it has been improving its own models to lower that cost.\n\nCanva AI 2.0 introduced a new architecture layer with intelligent workflows designed to streamline the creative process. These new features allow users to start with a simple idea and have the AI generate a fully layered, editable, and on-brand campaign by pulling in data from connected external apps such as Slack and Gmail.\n\n“We were relying too heavily on frontier models,” Perkins said.\n\n“Several of our first-party models were not yet ready for release, and our pricing, consumption model and usage controls had not caught up with the outsized demand we were seeing,” she said.\n\nPerkins said since April, the company had cut the cost of serving a single AI task by nearly 90%.\n\nCanva has built its own models and now routes work between them and the frontier labs depending on the task. Perkins said the company’s style-transfer model runs 23 times cheaper than frontier alternatives, its image model 30 times cheaper and its video model 17 times cheaper.\n\nCanva users create more than one billion designs every month, and Perkins said that across that volume “a variation of even a few cents makes an enormous difference”.\n\nMore than 200 researchers, engineers and platform specialists now work on artificial intelligence at Canva, including more than 140 in a dedicated research lab.\n\nThe company has also started answering prompts with material it already owns, drawing on a library of more than 165 million templates and assets “wherever possible before generating new content”.\n\nThe company has also begun rolling out a successor, Canva AI 2.1, and Perkins told investors it is the first version built “on an economic foundation designed for Canva’s proven freemium growth engine”.\n\nThe rollout will be staged while the company watches quality, engagement and unit economics.\n\n“Canva AI 2.1 helps people research, brainstorm, write, analyse, design and publish through a single connected conversation, while preserving the editability, collaboration and creative control that have always distinguished Canva from other tools,” Perkins said.\n\n“We’ll roll out Canva AI 2.1 thoughtfully, expanding access as we continue to monitor quality, engagement and unit economics.”\n\n## Strong quarter for enterprise arm\n\nElsewhere, ** Canva’s enterprise arm** recorded its strongest quarter. Business and enterprise tiers now account for 41.1% of paid seats, up from 39.8%, and the business-to-business division has passed $US500m in annual recurring revenue.\n\nIt ended the quarter with $US1.47bn in cash and remains profitable for a ninth consecutive year, a record Perkins has repeatedly presented as the discipline that separates the company from loss-making rivals.\n\nRick Baker, partner at Canva investor Blackbird Ventures, supported the strategy.\n\n“Canva is transforming to an AI platform built from the ground up, it’s not just a bolt-on. They’re building their own models and agents to deliver the best AI aided design in the world,” he said.\n\n“Importantly, Canva’s focus is to do this at a unit economic cost that makes sense for their huge scale freemium business. This is a period for setting up the next decade of growth.\n\n“What’s really exciting is that Canva has now built the platform to deliver AI at an almost unprecedented scale and at a cost that makes sense commercially. This is a huge breakthrough. We’re excited for the next phase as they begin to roll out the full AI product and set up for long term growth.”\n\n*This article first appeared in The Australian as **Canva forced to slash growth forecast after revealing high cost of new AI**.*\n\n## Related Topics\n\n### UNLOCK INSIGHTS\n\nDiscover the untold stories of emerging ASX stocks.\n\nDaily news and expert analysis, it's free to subscribe.\n\nBy proceeding, you confirm you understand that we handle personal information in accordance with our\n[Privacy Policy](https://stockhead.com.au/privacy-policy/).", "url": "https://wpnews.pro/news/canva-cuts-growth-forecast-after-revealing-high-cost-of-ai", "canonical_source": "https://stockhead.com.au/tech/canva-cuts-growth-forecast-after-revealing-high-cost-of-ai/", "published_at": "2026-08-07 01:34:03+00:00", "updated_at": "2026-08-09 12:22:54.536229+00:00", "lang": "en", "topics": ["generative-ai", "ai-products", "ai-infrastructure"], "entities": ["Canva", "Melanie Perkins", "Canva AI 2.0", "Canva AI 2.1"], "alternates": {"html": "https://wpnews.pro/news/canva-cuts-growth-forecast-after-revealing-high-cost-of-ai", "markdown": "https://wpnews.pro/news/canva-cuts-growth-forecast-after-revealing-high-cost-of-ai.md", "text": "https://wpnews.pro/news/canva-cuts-growth-forecast-after-revealing-high-cost-of-ai.txt", "jsonld": "https://wpnews.pro/news/canva-cuts-growth-forecast-after-revealing-high-cost-of-ai.jsonld"}}