By Angela Palumbo and Nate Wolf
Adobe reported better-than-expected financial results as demand for its artificial-intelligence products grows.
Adjusted earnings were $5.50 a share from revenue of $6.19 billion in the software company's fiscal fourth quarter. Analysts surveyed by FactSet were expecting earnings of $5.40 a share from revenue of $6.11 billion.
"Adobe's record FY2025 results reflect our growing importance in the global AI ecosystem and the rapid adoption of our AI-driven tools," CEO Shantanu Narayen said in the earnings release.
Adobe also said it expects fiscal first-quarter revenue to be between $6.25 billion and $6.3 billion, which is above Wall Street estimates of $6.23 billion. For the full fiscal year, Adobe is expecting revenue to be between $25.9 billion to $26.1 billion, while analysts expected revenue of $25.89 billion.
Shares of Adobe rose 3.5% to $355.28 on Thursday after initially falling in premarket trading. Stockholders may have hoped for a more sizable bump, given the company's record quarter and what has been a brutal 2025 for the stock.
Shares of Adobe have dropped 23% this year as of Wednesday's close, far underperforming the 17% rise of the S&P 500. Investors want to see monetization of AI, but there are ongoing concerns about competition in the creative space as AI grows.
Adobe said on Wednesday that total new AI-influenced annual recurring revenue now exceeds one-third of its overall business "as we integrate AI deeply into our solutions and continue to launch new AI-first offerings."
Adobe has also made some recent announcements that could help address some investor concerns.
The company said on Nov. 19 that it reached a deal to acquire search engine marketing company Semrush Holdings in an all-cash transaction that values Semrush at roughly $1.9 billion.
Adobe also announced on Wednesday that it has officially launched Photoshop, Express, and Acrobat in ChatGPT, which will be free to ChatGPT users globally. Users will now be able to access Adobe's apps in the AI chatbot by typing the name of the app they want to use, followed by an instruction, the company said.
"Adobe apps for ChatGPT build upon the company's innovation in agentic AI, enabling everyone to easily enhance vacation photos, design event invitations and create polished, professional documents simply by describing what they want to achieve with their words," Adobe said.
Still, the earnings report and guidance, which implied slower growth in 2026 than in 2025, did little to settle the debate around Adobe stock.
"Bulls see a cheap stock while bears see a weakening moat during the AI transition," wrote Oppenheimer analyst Brian Schwartz, adding that the print was unlikely to change anyone's opinion.
Oppenheimer reiterated an Outperform rating for Adobe shares, but lowered its price target to $430 from $460 in a research note Thursday.
Analysts at D.A. Davidson argued in a Thursday note that Adobe's tag as an "AI-loser" would continue to weigh on shares until investors had a better idea of how AI tools impact creative workflows. That dynamic creates an opportunity for long-term investors betting on the company's durable growth, the firm said.
D.A. Davidson reiterated a Buy rating and a $500 price target.
Write to Angela Palumbo at angela.palumbo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 11, 2025 14:54 ET (19:54 GMT)
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