Adobe has once again revised its outlook for the current fiscal year upward after strong results for the third quarter of fiscal 2025.
Revenue grew to $5.99 billion, up 11% from a year earlier, or 10% at constant currency. Earnings per share came in at $4.18 according to GAAP and $5.31 non-GAAP. Both figures exceeded analysts’ average expectations, causing the stock to rise in value in after-hours trading following the IPO.
CEO Shantanu Narayen highlighted the role of artificial intelligence within the product range. Adobe’s generative AI model Firefly, which powers features such as generative fill in Photoshop, is, according to him, the basis for a new growth path. He emphasized that recurring revenue influenced by AI now exceeds $5 billion and that the target for AI-first revenue has already been exceeded this year.
CFO Dan Durn said the record figures are mainly due to strong subscription revenues in both Digital Media and Digital Experience. According to him, the results confirm that the strategy of deeply integrating AI into all solutions is working.
The Digital Media division saw revenue increase by 12% to $4.46 billion, while annual recurring revenue from this segment reached nearly $18.6 billion. Digital Experience recorded revenue of $1.48 billion, a growth of 9%, with the subscription component increasing by 11%.
Further rollout of AI strategy
In addition to Firefly, Adobe is now expanding its offering with AI agents that can automate routine tasks such as customer journeys and target group segmentation. Analysts view this move as an indication that Adobe aims to further roll out its AI strategy for productivity and automation, thereby distinguishing itself more strongly in the market.
The company also emphasizes that it is developing AI functionality in a way that allows it to be directly applied to existing creative processes. In doing so, Adobe is attempting to take a practical and reliable approach in a landscape where many competitors are experimenting with new models without direct integration into workflows.
For the fourth quarter, Adobe expects revenue of between $6.075 billion and $6.125 billion. Earnings per share are estimated at $4.27 to $4.32 according to GAAP and between $5.35 and $5.40 on a non-GAAP basis. For the full fiscal year 2025, the company expects revenue of $23.65 to $23.70 billion and earnings per share of $16.53 to $16.58 (GAAP) or $20.80 to $20.85 (non-GAAP).