Adobe delivered-getter-than-expected first quarter earnings and said it is focused on taking advantage of AI and taking the "opportunity to reimagine our technology platforms to serve an increasingly large and diverse customer universe," said CEO Shantanu Narayen.
The company reported first quarter net income of $1.81 billion, or $4.14 share, on revenue of $5.71 billion, 10% from a year ago. Non-GAAP earnings in the quarter was $5.08 a share.
Wall Street was expecting Adobe to report first quarter earnings of $4.97 a share on revenue of $5.66 billion.
The company reaffirmed its outlook for the fiscal year. Adobe has a bevy of releases on tap at Adobe Summit next week as well as an Investor Day.
In prepared remarks, Narayen said Adobe is using its platform to give creative professionals access to a variety of models. These AI features will include new Firefly web app subscriptions.
Digital Media revenue in the first quarter was $4.23 billion, up 11% from a year ago. Digital Experience revenue was $1.41 billion in the first quarter, up 10%.
Narayen said:
"While Adobe’s commercially safe Firefly models will be integral to this offering, we will support additional third-party models to be part of this creative process. The Firefly app will be the umbrella destination for new creative categories like ideation. We recently introduced and incorporated our new Firefly video model into this offering, adding to the already supported image, vector and design models. In addition to monetizing standalone subscriptions for Firefly, we will introduce multiple Creative Cloud offerings that include Firefly tiering."
Adobe is also refining how it will report results from its primary audiences--business professionals and consumers and creative and marketing professionals. "We will win by focusing on “Business Professionals and Consumers” and “Creative and Marketing Professionals” with a unified product strategy and go-to-market. We will start to provide financial visibility into these two new groups starting this quarter and expand on this at our Investor Day at Summit next week," said Narayen.
As for the outlook, Adobe projected fiscal second quarter revenue of $5.77 billion to $5.82 billion with non-GAAP earnings of $4.95 a share to $5 a share. For fiscal 2025, Adobe said revenue will be $23.3 billion to $23.55 billion with non-GAAP earnings of $20.20 a share to $20.50 a share.
