By Christine Ji
The company exceeded Wall Street’s revenue and earnings estimates, with AI-influenced revenue streams picking up steam
Adobe’s third-quarter earnings exceeded Wall Street’s expectations, while the company raised its guidance.
Adobe Inc.’s third-quarter earnings beat provided a welcome surprise to investors, sending the stock rising over 4% in after-hours trading Thursday.
Adobe (ADBE) has found itself at the heart of the AI-versus-software debate. Although the company remains the primary creative suite among users, it’s facing competition from AI-powered tools such as ChatGPT and Canva.
But today’s results indicate that Adobe is defending its market share and growing its revenue. The company reported a record-breaking $5.99 billion of revenue for the quarter – an 11% year-over-year increase – beating consensus estimates of $5.92 billion, according to analysts tracked by FactSet.
Adobe’s Digital Media segment posted $18.59 billion of annualized recurring revenue (ARR), a 11.7% increase from the same period last year and higher than consensus expectations of $18.55 billion.
Adjusted earnings per share came out to $5.31, beating consensus estimates of $5.18.
Most importantly, the company’s AI adoption is accelerating. “Adobe is the leader in the AI creative-applications category with AI-influenced ARR surpassing $5 billion and AI-first ARR already exceedingour $250 million year-end target,” Chief Executive Shantanu Narayen said in a statement. He added that Adobe’s raised full-year outlook reflects its “customer strategy, AI product innovation and strong go-to-market execution.”
Adobe guided for $6.075 billion to $6.125 billion of total revenue for the current quarter, along with earnings per share of $5.35 to $5.40. Analysts were expecting $6.085 billion and $5.34, respectively. The company anticipates total revenue of $23.65 billion to $23.7 billion for the entirety of fiscal 2025; the prior outlook was for $23.5 billion to $23.6 billion.
Adobe’s earnings beat suggests that the company is increasing its AI momentum. According to Adobe, nearly 90% of the company’s top 50 enterprise accounts have adopted at least one of its AI-first innovations, while over 40% of its top 50 enterprise accounts have doubled their ARR spend since the start of fiscal-year 2023.
-Christine Ji
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
09-11-25 1651ET
Copyright (c) 2025 Dow Jones & Company, Inc.