Adobe Inc (NASDAQ:ADBE) eported better-than-expected FY25 Q3 results, beating revenue and earnings estimates and raising full-year guidance for both. The company also reached its $250 million ARR goal for AI-first products in fiscal 2025 far earlier than planned.
AI remains the headline growth driver, and adoption is spreading across Adobe’s user base. The Firefly family of models continues to post large usage figures, with service consumption up more than 30% per quarter and over 29 billion generations to date. Yet these gaudy numbers should be taken with caution. The entire AI space is expanding at a similar pace, and despite management’s enthusiasm, Adobe’s overall revenue growth barely pushes past the low double digits. The gap between the flashy metrics and the modest financial impact is hard to ignore.
The bigger issue is product leadership. Adobe’s AI tools may not viewed as best-in-class, and management seems to recognize this. The emerging strategy is to position Creative Cloud as a multi-model platform where users can choose between Firefly, Nano Banana (Google), DALL-E (OpenAI), and others. That raises fundamental questions: if Adobe is no longer leading with its own innovation, what is its future value proposition?
For more details, key highlights, and commentary, check out the high-level earnings summary.
