Analyst(s): Keith Kirkpatrick, Daniel Newman
Publication Date: June 13, 2025
Adobe Q2 FY 2025 earnings report highlights continuing momentum across Digital Media and Experience segments as AI adoption drives strong customer engagement and supports guidance revisions. Steady demand for AI-powered tools like Firefly and Acrobat AI Assistant is helping Adobe expand its user base across business, creative, and enterprise segments while navigating ongoing competition from new AI entrants.
What is Covered in this Article:
- Adobe’s Q2 FY 2025 financial results
- Continued adoption of Acrobat AI Assistant and Express driving growth
- Firefly platform expansion fueling Creative Cloud Pro adoption and AI monetization
- Strong RPO and CRPO growth reinforcing long-term revenue visibility
- Updated management guidance for FY 2025 and Q3 FY 2025 outlook
The News: Adobe Inc. (NASDAQ: ADBE) reported financial results for its fiscal Q2 FY 2025, with total revenue of $5.87 billion, up 11% year-on-year (YoY) as reported and in constant currency (cc), slightly ahead of consensus estimates of $5.8 billion. Digital Media revenue rose 11% YoY (+12% YoY cc) to $4.35 billion, with annualized recurring revenue (ARR) reaching $18.09 billion, up 12% YoY. Digital Experience revenue grew 10% YoY (at cc) to $1.46 billion, while subscription revenue in this segment rose 11% YoY (at cc) to $1.33 billion.
Non-GAAP operating income stood at $2.67 billion (+3.1% above consensus), reflecting a 9.5% YoY increase. Non-GAAP net income stood at $2.17 billion (Q2 FY 2024: $2 billion) and non-GAAP diluted EPS came in at $5.06 (Q2 FY 2024: $4.48), exceeding consensus of $4.98. Remaining performance obligations (RPO) stood at $19.69 billion, up 10% YoY and close to the consensus estimate of $19.74 billion.
“As a result of us driving strong performance in the first half of the year, we are pleased to raise Adobe’s FY 2025 total revenue and EPS targets,” said Dan Durn, executive vice president and CFO at Adobe. “We continue to invest in AI innovation across our customer groups to enhance value realization and expand the universe of customers we serve.”
Adobe Q2 FY 2025 Earnings Top Estimates With 11% Revenue Growth
Analyst Take: Adobe’s Q2 FY 2025 results reflect solid execution across both Digital Media and Digital Experience segments as the company continues to leverage AI innovation to drive growth and expand its user base. While revenue and earnings slightly exceeded expectations, management’s raised guidance signals confidence in its product momentum and AI monetization roadmap. Investor concerns around AI competition remain, but early traction across Firefly, Acrobat AI Assistant, and GenStudio supports Adobe’s positioning as an AI beneficiary with a multi-pronged approach targeting consumers, creative professionals, and enterprises.
AI Integration Across Business, Professional, and Consumer Segments Driving User Growth
Adobe’s strategy to merge productivity and creativity for business professionals and consumers continues to gain traction, with strong adoption of Acrobat AI Assistant and Express contributing to more than 25% YoY growth in combined monthly active users, which crossed 700 million. The company reported approximately 3x sequential and 11x YoY growth in Express adoption within Acrobat, illustrating cross-product integration’s impact on engagement. Express also added 8,000 new businesses in the quarter, representing nearly 6x growth YoY.
Key enterprise wins include Microsoft, ServiceNow, and Workday, as well as major sports leagues such as the NFL and Premier League. Students remain a strong growth vector, with a 75% YoY increase in adoption for Acrobat AI Assistant and Express Premium plans. The platform’s expanding ecosystem, with integrations from Google Ads, Vimeo, and Bitly, further enhances Express’ functionality and positions Adobe to capture a broader user base. This momentum reflects Adobe’s growing ability to reach new customer segments beyond its core creative base.
Creative Cloud and Firefly Platform Extend Adobe’s AI Monetization Flywheel
In the Creative and Marketing Professionals segment, Adobe is driving adoption through Firefly’s integration into Creative Cloud and the launch of Creative Cloud Pro. Firefly app traffic grew more than 30% sequentially, while paid subscriptions nearly doubled. First-time Adobe subscribers increased by more than 30% sequentially, highlighting Firefly’s role as an on-ramp for new users. Total Firefly generations have now crossed 24 billion, highlighting both user engagement and the scale of AI-driven content creation.
Adobe continues to expand Firefly’s creative flexibility by incorporating third-party models from Google, OpenAI, Black Forest Labs, and others. The newly launched Firefly Image Model 4 Ultra and Firefly Video Model enable users to create high-fidelity images and 4K video from text prompts, further strengthening Adobe’s competitive differentiation in creative AI workflows. This AI strategy is helping Adobe broaden its creative user base while deepening product engagement.
Strong RPO Growth Reinforces Long-Term Revenue Visibility
Adobe’s growing base of committed revenue continues to support multi-year revenue visibility across its subscription businesses. Remaining performance obligations (RPO) exited the quarter at $19.69 billion, growing 10% YoY, while current RPO (CRPO) also expanded 10% YoY, both as reported and in constant currency. Strength in both Digital Media and Digital Experience subscription businesses contributed to this backlog growth, reflecting sustained subscription momentum across creative, business, and enterprise customer segments as AI-powered offerings drive broader adoption and deeper product integration.
The increasing adoption of AI-powered offerings such as Acrobat AI Assistant, Firefly app, GenStudio, and Experience Platform agents is further embedding Adobe’s solutions into customer workflows, contributing to expanding committed revenue duration. Adobe’s balanced mix of short-term and long-term RPO growth provides management with continued visibility to support elevated AI-related R&D investments while sustaining margin discipline.
Solid Execution Supports Raised Guidance Despite Ongoing Competitive Overhang
Adobe raised its full-year FY 2025 revenue and EPS targets, reflecting continued execution across AI-powered growth drivers. Full-year revenue is now expected between $23.50 billion and $23.60 billion (prior: $23.30 billion to $23.55 billion), with non-GAAP EPS projected between $20.50 and $20.70 (prior: $20.20 to $20.50). For Q3 FY 2025, revenue is forecast between $5.88 billion and $5.93 billion (in line with consensus), with Digital Media revenue of $4.37 billion to $4.40 billion, Digital Experience revenue of $1.45 billion to $1.47 billion and non-GAAP EPS between $5.15 and $5.20 (consensus estimate: $5.11).
While some Street commentary points to investor caution around accelerating AI monetization, management emphasized that AI-first products are tracking ahead of its $250 million ARR target for FY 2025. Despite investor concerns over rising competition from AI-native disruptors like Canva, Midjourney, and open-source models, Adobe’s performance highlights resilience across its core businesses. Adobe’s diversified AI monetization layers – spanning business professionals, creatives, and enterprise marketing – provide multiple avenues for sustained growth execution through the remainder of FY 2025.
Adobe has a significant advantage over its competitors when targeting enterprise users – the company’s guardrails around model training and development continue to position the company and its products as the commercially safe, enterprise-grade choice for deploying AI tools. This cannot be overstated or overlooked, as large enterprises are unlikely to invest in AI that cannot be properly governed, given the high financial and reputational costs associated with AI tools that do not adhere respect the intellectual property or copyrights of creators, or fail to train and vet AI models to avoid biased or inappropriate content.
See the complete press release on Adobe’s Q2 FY 2025 financial results on the Adobe website.
Disclosure: Futurum is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
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Author Information
Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
