Adobe (Nasdaq: ADBE) is showing that AI isn’t just a buzzword—it’s a revenue engine. The software giant reported record third-quarter revenue of $5.99 billion, up 11% year-over-year, fueled by strong subscription growth across its Digital Media and Digital Experience segments.
AI Is Paying Off
CEO Shantanu Narayen highlighted Adobe’s leadership in AI-driven creative tools, noting that AI-influenced ARR surpassed $5 billion, while AI-first ARR already exceeds the company’s $250 million year-end target. “Given our customer strategy, AI product innovation, and strong go-to-market execution, we’re pleased to once again raise our FY25 total revenue and EPS targets,” he said.
CFO Dan Durn added that Adobe’s subscription revenue strength underscores the company’s ability to combine traditional creative software with AI enhancements, delivering both scale and innovation.
Segment Performance
- Digital Media: $4.46B revenue, +12% YoY, with ARR reaching $18.59B.
- Digital Experience: $1.48B revenue, +9% YoY, subscription revenue $1.37B, +11% YoY.
- Customer Groups: Business Professionals and Consumers grew 15% YoY; Creative and Marketing Professionals grew 11% YoY.
Cash flow from operations hit $2.20B, while Adobe repurchased 8 million shares during the quarter. Remaining Performance Obligations (RPO) stood at $20.44B, with 67% classified as current.
Looking Ahead
Adobe raised its FY25 revenue guidance:
- Total revenue: $23.65B–$23.70B
- Digital Media revenue: $17.56B–$17.59B
- Digital Experience revenue: $5.84B–$5.86B
- EPS: GAAP $16.53–$16.58, non-GAAP $20.80–$20.85
For Q4 FY25, Adobe expects revenue of $6.075B–$6.125B, with Digital Media projected at $4.53B–$4.56B and Digital Experience at $1.495B–$1.515B.
Why It Matters
Adobe’s results underscore a broader trend in software: AI is no longer optional—it’s a revenue driver. By embedding AI across its Creative Cloud and Experience Cloud products, Adobe not only enhances customer value but also locks in recurring revenue, giving investors confidence in continued growth.
In a competitive market where Microsoft, Canva, and others are aggressively building AI features into creative and marketing software, Adobe’s scale, ARR momentum, and AI-first positioning keep it at the forefront.
The Bottom Line
Adobe’s Q3 performance reflects a company successfully leveraging AI to fuel growth across subscriptions and segments, hitting ambitious ARR milestones while boosting guidance. For investors and B2B tech buyers alike, it’s a clear sign that AI integration is now core to corporate strategy—not just a shiny feature.
