Adobe (ADBE) Q3 2025 Earnings Preview

Adobe recently announced its fiscal third-quarter results, exceeding analysts’ expectations and sending shares higher in after-hours trading. The company’s performance underscores its continued dominance in the design software market, fueled by robust growth in its digital media segment and the strategic integration of artificial intelligence across its product suite.

Here’s a breakdown of the key figures compared to LSEG consensus estimates:

• Earnings per share: $5.31 adjusted vs. $5.18 expected
• Revenue: $5.99 billion vs. $5.91 billion expected

The company’s latest earnings report highlighted an 11% year-over-year increase in revenue, reaching $5.99 billion compared to $5.41 billion in the same quarter last year. Net income also saw a rise, climbing to $1.77 billion, or $4.18 per share, from $1.68 billion, or $3.76 per share, the previous year.

Looking ahead, Adobe anticipates adjusted earnings per share in the fourth quarter to range between $5.35 and $5.40, exceeding the average analyst estimate of $5.34. Revenue guidance for the quarter is set at $6.08 billion to $6.13 billion, aligning with analysts’ expectations of $6.08 billion, according to LSEG.

Adobe projects an 11.3% annualized revenue increase in its digital media business for the fiscal year, surpassing its earlier forecast of 11% growth. The company estimates digital media revenue for the fourth quarter to be between $4.53 billion and $4.56 billion, surpassing the StreetAccount average estimate of $4.51 billion. This growth reflects sustained demand for Adobe’s creative tools and services, particularly among professionals and enterprises.

A significant driver of Adobe’s recent success has been its aggressive adoption of artificial intelligence. The company has been strategically embedding AI capabilities into its core products, enhancing user experience and driving efficiency. This has not only attracted new customers but has also deepened engagement with existing users.

“Our AI-influenced ARR has now surpassed $5 billion, up from over $3.5 billion exiting fiscal year 2024 and we have already surpassed our full year AI-first ending ARR target,” CEO Shantanu Narayen told analysts during the earnings call. This statement signals the increasing impact of AI on Adobe’s revenue streams and its commitment to further investing in AI-driven innovation.

Despite the positive earnings report, Adobe’s stock performance this year has lagged behind its tech peers and the broader Nasdaq index. As of Thursday’s close, Adobe’s stock was down 21% year-to-date, compared to the Nasdaq’s 14% increase. This discrepancy could be attributed to various factors, including investor concerns about competition in the creative software market and the pace of AI adoption. However, with its strong financial performance and continued investment in AI, Adobe remains a formidable force in the industry, poised to capitalize on the growing demand for creative and digital solutions.