ADBE: Adobe Shares Jump After Record Revenue and AI Breakthroughs

Sep 12 - Adobe Inc ADBE shares surged about 4% on early Friday trading after the company reported record third-quarter revenue and expanded AI-driven offerings.

Adobe posted revenue of $5.99 billion, up 10% year over year, with GAAP EPS of $4.18 and non-GAAP EPS of $5.31, reflecting double-digit growth. Digital Media revenue climbed to $4.46 billion while Digital Media ARR rose to $18.59 billion. Digital Experience revenue reached $1.48 billion.

Cash flow from operations hit a Q3 record of $2.20 billion, and Adobe said AI-influenced ARR topped $5 billion, underscoring growing enterprise adoption of its generative tools. The firm repurchased $2.5 billion and has about $8.4 billion left under its buyback.

Management set Q4 revenue guidance to $6.075 billion$6.125 billion and raised fiscal 2025 revenue outlook to $23.65 billion$23.70 billion.

Analysts had listed threats such as the possibility of competitive actions by ad platforms incorporating diffusion models, intellectual property noise under AI, and pressure on the margins with increasing scale of investments. Nevertheless, the performance of Adobe indicates that the demand in creative and marketing products is not going away fast as monetization speeds up with AI capabilities.