"Yesterday, Adobe (Nasdaq: ADBE) reported its quarterly results that were ahead of market expectations. The stock has not had a good run so far this year, having dropped 21% so far on worries that " AI is eating software". Analysts believe that AI will make the infrastructure companies more valuable and SaaS companies will suffer. Adobe is addressing the concern by aggressively integrating AI features into its Creative Cloud products, developing its own generative AI platform called Firefly, and expanding into enterprise AI solutions."
"Adobe's third quarter revenues grew 11% to $5.99 billion, ahead of the market's estimates of $5.91 billion. Adjusted EPS of $5.31 also beat analyst estimates of $5.18. During the quarter, Digital Media segment revenues grew 12% over the year to $4.46 billion. Digital Media Annualized Recurring Revenue grew 11.7% to $18.59 billion. Digital Experience segment revenue grew 9% to $1.48 billion."
"Earlier this year, Adobe announced the general availability of AI agents to improve how organizations build, deliver, and optimize customer experiences and marketing campaigns. Powered by the Adobe Experience Platform (AEP) Agent Orchestrator, Adobe is also creating an AI platform for businesses to manage and customize agents both from Adobe and across third-party ecosystems. The platform will help agents understand context, plan multi-step actions, refine responses, and perform higher end processes."
Adobe's third-quarter revenue rose 11% to $5.99 billion and adjusted EPS was $5.31, both beating estimates. Digital Media revenue increased 12% to $4.46 billion and Digital Media ARR rose 11.7% to $18.59 billion. Digital Experience revenue grew 9% to $1.48 billion with subscription revenue up 11% to $1.37 billion. The company projects fourth-quarter revenue of $6.08–$6.13 billion and EPS of $5.35–$5.40, slightly above market expectations. Adobe is integrating generative AI into Creative Cloud, building Firefly, and deploying the Adobe Experience Platform Agent Orchestrator to enable enterprise AI agents that understand context and plan multi-step actions.
Read at TalkMarkets
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