• Total Revenue: $5.71 billion, 11% year-over-year growth.
• GAAP Earnings Per Share (EPS): $4.14.
• Non-GAAP Earnings Per Share (EPS): $5.08, 13% year-over-year growth.
• Digital Media Revenue: $4.23 billion, 12% year-over-year growth.
• Digital Media Annual Recurring Revenue (ARR): $17.63 billion, 12.6% year-over-year growth.
• Digital Experience Revenue: $1.41 billion, 11% year-over-year growth.
• Cash Flows from Operations: $2.48 billion.
• Remaining Performance Obligations (RPO): $19.69 billion, 12% year-over-year growth.
• Ending Cash and Short-term Investments: $7.44 billion.
• Share Repurchase Agreements: $3.25 billion entered, $14.4 billion remaining authorization.

Release Date: March 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Adobe Inc (NASDAQ:ADBE) reported a record first quarter with $5.71 billion in revenue, representing 11% year-over-year growth.
• The company achieved a GAAP earnings per share of $4.14 and a non-GAAP earnings per share of $5.08, reflecting 13% year-over-year growth.
• Adobe Inc (NASDAQ:ADBE) reaffirmed its fiscal 2025 targets, indicating confidence in its growth strategy.
• The introduction of new AI-driven products like Firefly Services and GenStudio has contributed significantly to the company's growth, with a $125 million book of business expected to double by the end of fiscal 2025.
• Strong performance in Digital Media with $4.23 billion in revenue and a 12.6% year-over-year growth in Digital Media ARR, driven by broad-based adoption across Creative Cloud and Document Cloud.

Negative Points

• The AI book of business, while promising, currently represents a low single-digit percentage of total revenue, indicating it is still in early stages of material impact.
• There is a potential risk of market skepticism regarding the monetization of AI, as it is seen as a cost of staying relevant rather than a growth driver.
• The company's growth in the creative and marketing professionals segment is slightly behind the business professionals and consumer group, which may indicate longer sales cycles and adoption challenges.
• Macroeconomic conditions, including trade wars and tariffs, could impact customer behavior and spending, posing a risk to Adobe Inc (NASDAQ:ADBE)'s growth projections.
• The transition to new revenue categorization and the removal of historical Document Cloud and Creative Cloud metrics may create initial confusion among investors and analysts.

Q & A Highlights

Q: Shantanu, if you took the AI book of business, it would be low single-digit percent of your total revenue for the year. When does this become more material? A: Shantanu Narayen, CEO: We've always talked about the AI journey as three parts: innovation, tracking usage, and monetization. We're pleased with our progress across these areas. AI monetization is happening through attracting subscriptions and driving higher-value price SKUs. The $125 million AI book of business we mentioned relates to new products like Acrobat AI Assistant and Firefly. We expect this to double by the end of fiscal '25.

Q: Could you provide more color on trends you saw in the quarter across Creative and Document Cloud? A: David Wadhwani, President of Digital Media: Digital Media ARR grew 12.6% year-over-year, consistent with expectations. We saw broad-based demand, particularly in Acrobat and Express, with Acrobat's monthly active users up 23% year-over-year. AI Assistant usage doubled quarter-over-quarter, and Express has seen strong growth in partnerships and student access.

Q: The business professionals and consumer group has a stronger growth rate than the creative and marketing professionals. Could the latter catch up? A: Shantanu Narayen, CEO: The creative and marketing professionals group addresses the entire content supply chain, and with new subscriptions like Firefly app and GenStudio, we see a large untapped opportunity. The investments in Acrobat and Express are reflected in the business professionals and consumer group, showing strong growth potential.

Q: How do you view AI's potential to expand Adobe's TAM and accelerate growth? A: Shantanu Narayen, CEO: AI presents a massive opportunity to bring billions into creativity and productivity. With products like Photoshop on web and mobile and Firefly app, we aim to attract next-generation creators. In the enterprise, AI will drive more content production and personalization, expanding our TAM and accelerating growth.

Q: Can you explain the change in revenue categorization, removing Document Cloud and Creative Cloud? A: Daniel Durn, CFO: We're increasingly driving cross-cloud offerings, and the new categorization reflects our strategy of serving business professionals and consumers, and creative and marketing professionals. This provides better insight into our execution and highlights the intersections of productivity, creativity, and marketing.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.