Adobe Increases FY25 Guidance Amid Strong ARR Growth

Adobe has reported stronger-than-expected results for Q3 FY2025, leading to an increase in its full-year revenue and EPS guidance. The total revenue is now projected to be between $23.65 billion and $23.70 billion.

Digital Media ARR has grown by 11.7% year-over-year, reaching $18.59 billion, driven by Creative Cloud, Document Cloud, and the adoption of new AI-enabled features. The Digital Media segment grew approximately 12%, while Digital Experience subscriptions advanced by 11%.

Adobe revealed that AI-influenced ARR has surpassed $5 billion, significantly exceeding its $250 million incremental target for the year. Features such as Acrobat AI Assistant and Firefly are attracting new subscribers and expanding existing contracts.

The company highlighted strong remaining performance obligations (RPO), indicating committed future revenues and reinforcing the durability of its subscription contracts.

Adobe serves as a prime example of a mature subscription business, achieving double-digit recurring revenue growth even at scale. Its results highlight several trends and strategic lessons relevant across the subscription economy.