How Adobe Benefit From AI?
$Adobe(ADBE)$ in the Outperformed in the second quarter of fiscal 2024, delivering record revenues of $531 million, up 11% year-over-year, GAAP EPS of $3.49, up 24% year-over-year, and non-GAAP EPS of $4.48, up 15% year-over-year, both of which exceeded expectations.
Business sector performance
Digital media division is Adobe's main source of revenue, revenue of 3.91 billion U.S. dollars in the quarter, an increase of 11% year-on-year. Among them, Creative Cloud revenue of 3.13 billion U.S. dollars, Document Cloud revenue growth of 19% year-on-year, growth rate than the Creative Cloud. digital experience division revenue of 1.33 billion U.S. dollars, an increase of 9% year-on-year.
Financial guidelines
Adobe raised its financial guidance for fiscal year 2024. For the third quarter, the company expects total revenues in the range of $5.33 billion to $5.38 billion; net new annualized recurring revenue (ARR) from digital media of approximately $460 million. For the full year, total revenue is expected to be in the range of $21.4 billion to $21.5 billion, with non-GAAP earnings per share in the range of $18 to $18.20.
AI progress
Adobe attaches great importance to the development and application of AI. The company has been in the flagship products such as Photoshop, Illustrator, etc. integrated Firefly series of creative generation AI model, Firefly has been used to generate more than 9 billion images.
Firefly Creative Generation AI Model
Adobe continues to increase investment in its Firefly creative generation AI model. Financial results show that Firefly has been used to generate more than 9 billion images, becoming an important channel for the company's AI monetization.Adobe is integrating Firefly into its flagship products, such as Photoshop, Illustrator, etc., in order to improve the efficiency of creative work.
Launched Acrobat AI Assistant subscription add-ons
Adobe launched the Acrobat AI assistant subscription add-ons for enterprise customers, applying AI technology to the document processing field. This initiative helps the company in the enterprise AI services market to obtain more revenue.
Integration of third-party large language models
Adobe is integrating third-party-trained multimodal large language models into its applications to enhance the AI capabilities of its products. This indicates that the company is adopting an open AI ecosystem strategy.
Strong AI demand and use
According to the report, Adobe saw strong demand and use of AI capabilities across all customer segments, and AI not only helped attract new customers, but also created more value for existing customers. This reflects the success of the company's AI strategy. Overall, Adobe is fully advancing the use of AI technology in its products and services, and monetizing AI through multiple channels. The company is confident that AI will drive future growth.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
