Adobe Surpasses Forecasts with Impressive Quarterly Performance Fueled by AI Adoption

On Thursday, Adobe Inc exceeded the expectations of Wall Street for its quarterly results and forecast, thanks to the successful implementation of generative artificial intelligence (AI) integrations aimed at boosting demand.

Shares of the San Jose, Calif.-based company rose more than 5% in aftermarket trading.

Adobe’s drive to drive AI innovation has manifested itself in the AI features included in Acrobat, Express, Photoshop, and Premiere Pro.

Earlier this month, Adobe announced that it would offer Firefly, its artificial intelligence tool for image creation, financial compensation to its large enterprise customers for copyright challenges related to content made with the tool.

“Users have now created more than half a billion assets on the Firefly website and Photoshop, making these two of our most successful beta releases in the company’s history,” Adobe CFO Dan Durn told Reuters.

Analysts see generative AI as a short- and long-term benefit for both creative and experiential businesses, which could be a catalyst for 2024 revenue growth.

The company forecast current-quarter revenue of $4.83 billion to $4.87 billion and raised fiscal 2023 revenue to $19.25 billion to $19.35 billion, both above analysts’ estimates, according to Refinitiv data.

The focus remains on the effects of generative AI and the pending closure of the Figma store. Adobe has been waiting to complete its $20 billion acquisition of the cloud-based designer platform, with management expecting a tentative decision this month.

The deal would give Adobe a stake in the company, whose web-based design and brainstorming platform is widely popular among tech companies including Zoom Video Communications, Airbnb Inc and Coinbase.

Revenue was $4.82 billion for the quarter ended June 2, compared with analysts’ estimates of $4.77 billion, while adjusted earnings were $3.91 per share, topping estimates of $3.79 per share.