Adobe (ADBE) Stock: Jumps 9% as Company Crushes Earnings

TLDR

Table of Contents

Adobe stock rose 9% after hours following Q3 revenue of $5.99 billion that beat Wall Street estimates of $5.91 billion
Company raised full-year guidance with revenue targets of $23.65-$23.70 billion and EPS of $20.80-$20.85
AI-influenced annual recurring revenue surpassed $5 billion, up from $3.5 billion at end of fiscal 2024
Adjusted earnings per share hit $5.31, topping consensus estimates of $5.18 for the quarter
Despite stock being down 21% year-to-date, results showed concrete AI monetization progress

Adobe stock climbed 3.07% to $361.32 in after-hours trading Thursday after reporting third-quarter results that topped Wall Street expectations. The creative software company delivered both revenue and earnings beats while raising full-year guidance.

The company posted adjusted earnings per share of $5.31, beating consensus estimates of $5.18. Revenue reached $5.99 billion, above the $5.91 billion analysts projected according to LSEG data.

Revenue for the quarter ending August 29 marked an 11% year-over-year increase from $5.41 billion. Net income rose to $1.77 billion, or $4.18 per share, compared to $1.68 billion, or $3.76 per share, in the prior year quarter.

Adobe, $ADBE, Q3-25. Results:
📊 Adj. EPS: $5.31 🟢
💰 Revenue: $5.99B 🟢
📈 Net Income: $1.77B
🔎 AI-influenced ARR surpassed $5B, and Adobe raised FY25 revenue and EPS targets amid strong demand across Digital Media and Experience segments. pic.twitter.com/TQs5pB60SS
— EarningsTime (@Earnings_Time) September 11, 2025

The earnings beat provided a boost for Adobe stock, which has fallen 21% year-to-date while the Nasdaq gained 14%. Thursday’s rally signaled renewed investor confidence in the company’s direction.

At the regular close, Adobe shares finished at $350.55, up 0.11% on the day. The after-hours surge came as investors welcomed proof of AI monetization efforts.

Guidance Exceeds Expectations

Adobe issued fourth-quarter guidance that exceeded analyst forecasts. The company expects adjusted EPS between $5.35 and $5.40, above Wall Street’s $5.34 estimate.

Projected Q4 revenue was set between $6.08 billion and $6.13 billion. This compared to consensus forecasts of $6.08 billion.

Adobe raised its full-year guidance to $23.65-$23.70 billion in revenue. Full-year adjusted EPS guidance increased to $20.80-$20.85.

These figures compare favorably to average analyst estimates of $23.57 billion in revenue and $20.58 in EPS. The upbeat outlook extended to Adobe’s Digital Media division, its primary revenue driver.

The firm forecast digital media revenue between $4.53 billion and $4.56 billion for Q4. This topped the $4.51 billion StreetAccount estimate.

AI Revenue Reaches New Milestone

Adobe’s AI-influenced annual recurring revenue surpassed $5 billion, up from $3.5 billion at the end of fiscal 2024. This milestone shows accelerating demand for AI-powered tools across Adobe’s customer base.

CEO Shantanu Narayen emphasized that AI innovation is delivering returns. “Adobe is the leader in the AI creative applications category with AI-influenced ARR surpassing $5 billion,” he said.

The company noted that 99% of Fortune 100 companies have used AI in an Adobe product. More than 40% of its top 50 enterprise clients have doubled ARR spending since the start of fiscal 2023.

“Given our customer strategy, AI product innovation, and strong go-to-market execution, we’re pleased to once again raise our FY25 total revenue and EPS targets,” Narayen told analysts. The AI-first ARR already exceeded Adobe’s $250 million year-end target.

Adobe faces competition from rivals like OpenAI and Canva introducing generative AI features. However, Thursday’s earnings provided concrete evidence that Adobe is converting AI demand into revenue growth.

Anil Chakravarthy, president of Adobe’s Digital Experience division, highlighted the company’s approach to AI. “Our focus on protecting customer intellectual property makes us the logical partner for enterprises transforming their marketing and customer experiences,” he said.

Retail sentiment toward Adobe stock remained “extremely bullish” at 98/100 on Stocktwits following the earnings report. Message volume was “extremely high” as traders discussed the quarterly results and guidance raise.

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