Adobe's latest earnings report revealed its annual recurring revenue (ARR) from artificial intelligence (AI) at $125 million, highlighting the company's focus on this emerging technology. CEO Shantanu Narayen announced plans to double this ARR by the financial year-end. Despite a challenging year reflected in a 23% drop in stock value, analysts remain optimistic about Adobe's ability to monetize its generative AI offerings. The company's total quarterly revenue is $5.71 billion, with expectations for increases in the upcoming quarter. Investors remain vigilant about potential returns on AI investments.
"Whether it is innovation, having our own models, integrating it across all of our products, brand new revenue streams like GenStudio in the enterprise and then usage and monetization, I feel really good about it," Narayen said on the call.
"Adobe is unquestionably a frustrating stock in 2024," wrote Gregg Moskowitz, a managing director at Mizuho, predicting optimistic growth despite current challenges.
As AI spending surges, investors are watching closely to see if tech companies can turn big bets into real returns.
Narayen said on the earnings call that future info on AI's ARR would be released "periodically" - not quarterly.
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