Live: Will Adobe Beat Earnings Tonight
Key Points
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Street expects ~9% revenue growth and double-digit EPS growth as Adobe guides Q4 and FY25 targets.
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Investors will watch AI monetization: Acrobat AI Assistant, Firefly app/services, and GenStudio ARR tracking ahead of plan.
Live Updates
My Take On The Quarter
Consensus Pre-Earnings: Rev $5.92B | EPS $5.18
Actuals: Rev $5.99B | EPS $5.31
Takeaway Bullets:
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Bullish: Broad-based beat, raised FY25 outlook, AI ARR well ahead of goal.
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Bearish: Valuation still high, AI monetization trajectory will need to keep accelerating.
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Neutral: Subscription growth steady; margin profile unchanged.
Key Operating Metrics
| Metric | Q3 2025 | Q3 2024 | YoY Δ |
|---|---|---|---|
| Digital Media Rev | $4.46B | $3.99B | +12% |
| Digital Media ARR | $18.59B | $16.64B | +11.7% |
| Digital Experience Rev | $1.48B | $1.36B | +9% |
| Digital Exp. Subscriptions | $1.37B | $1.23B | +11% |
| RPO | $20.44B | $18.08B | +13% |
Guidance Update
Q4 FY2025 (New):
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Revenue: $6.075–$6.125B
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Non-GAAP EPS: $5.35–$5.40
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GAAP EPS: $4.27–$4.32
Full Year FY2025 (Raised):
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Revenue: $23.65–$23.70B (prev. $23.3–$23.55B)
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Non-GAAP EPS: $20.80–$20.85 (prev. $20.20–$20.50)
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GAAP EPS: $16.53–$16.58
Guidance stance: Raised across revenue, ARR, and EPS.
Management Commentary
CEO Shantanu Narayen:
“AI-influenced ARR has now surpassed $5 billion, with AI-first ARR already exceeding our $250M year-end target. We’re raising FY25 revenue and EPS targets given strong innovation and execution.”
CFO Dan Durn added that subscription revenue strength across both Digital Media and Digital Experience underpinned the record quarter.
Stock Rising After Earnings
Adobe delivered another solid quarter: revenue $5.99B (+11% YoY) vs. Street at ~$5.92B (✅ beat), and non-GAAP EPS $5.31 vs. ~$5.18 consensus (✅ beat). GAAP EPS came in at $4.18. Operating cash flow was $2.2B. RPO hit $20.4B (+13% YoY), signaling durable forward growth.
| Metric | Actual | Estimate | Beat/Miss |
|---|---|---|---|
| Revenue | $5.99B | $5.92B | ✅ Beat |
| Non-GAAP EPS | $5.31 | $5.18 | ✅ Beat |
| GAAP EPS | $4.18 | ~$4.00 | ✅ Beat |
| Cash from Ops | $2.20B | N/A | — |
Shares are up ~4% after hours, as investors reward the beat and raised guidance despite high AI expectations already priced in.
Stock is jumping after-hours
No release on the Adobe site yet but the stock is now jumping higher after-hours.
Adobe reports after the close with consensus looking for high-single-digit revenue growth and 11% EPS growth, keeping the focus on how AI products translate to ARR and guidance. Management last quarter raised FY25 revenue/EPS targets and framed Q3 revenue at $5.875–$5.925B. This print matters for evidence that AI-first offerings (Acrobat AI Assistant, Firefly, GenStudio) are scaling beyond usage into durable ARR while Creative Cloud Pro stratification proceeds smoothly.
What to Expect — Estimates (Consensus)
- Revenue: $5.91 billion
- EPS (Normalized): $5.18
- Cash from Ops: N/A in snapshot
- FY 2025 Revenue: $23.57 billion
- FY 2025 EPS: $20.58
- FY 2026 Revenue: $25.78 billion
- FY 2026 EPS: $23.10
Key Areas to Watch
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AI monetization run-rate
Management said AI-influenced revenue is already “in the billions” and the AI-first book is tracking ahead of the $250M FY25 exit target; look for ARR disclosure and attach to paid tiers. -
Creative Cloud Pro rollout
CC Pro is positioned as the “sweet spot” for pros, rolling in on renewals by region; watch for commentary on upgrade rates and regional timelines. -
Third-party models in Firefly
Support for Google/OpenAI/Black Forest Labs within Firefly could widen funnel while preserving enterprise IP safety; adoption signals matter. -
DX momentum & agents
AEP + apps >40% YoY subscription growth last quarter; any update on agentic AI and GenStudio adoption informs H2 trajectory.
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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