Adobe’s Second-Quarter Revenue in Line with Expectations, but AI Growth Slows Down
Adobe’s latest earnings report has sparked concerns about the company’s ability to monetize its artificial intelligence (AI) offerings. The technology giant reported second-quarter revenue of $5.77 billion, in line with analyst expectations. However, the growth rate of its AI-related offerings was slower than anticipated.
Shares of Adobe fell more than 4% in extended trading after the report, as investors wait for clarity on when the company will start to see significant revenue from its AI products. The company’s CEO has expressed confidence that it can capitalize on the growing demand for creative economy-driven solutions, but analysts are still questioning whether the AI monetization timeline is too slow.
Adobe’s annual recurring revenue for its AI and add-on offerings was $125 million at the end of the quarter, and management expects to double this figure in the next three quarters. However, some analysts believe that investors will remain cautious until Adobe delivers more concrete results from its AI products.
The company has been investing heavily in AI integration into its software portfolio, including Photoshop, to boost appeal and stay competitive in an increasingly crowded market. Despite this effort, digital media revenue grew only slightly above analyst estimates, which may raise concerns about the impact of competition on Adobe’s bottom line.
Overall, while Adobe’s latest earnings report is in line with expectations, the company still faces challenges in generating significant revenue from its AI offerings. As investors wait for more concrete evidence of AI growth, shares are likely to remain volatile.
Source: https://www.reuters.com/technology/adobe-beats-first-quarter-revenue-estimates-2025-03-12