Adobe (NASDAQ:ADBE) shares edged higher after reporting its third quarter fiscal 2025 financial results that surpassed estimates across the board post-market on Thursday.
The company reported annual recurring revenue related to artificial intelligence applications had surpassed $5B.
For the quarter ended August 29, the design software company reported adjusted earnings per share of $5.31, which was more than the consensus estimate of $5.18. GAAP EPS was $4.18 compared to the $4.05 estimate.
Revenue for the quarter increased 11% year over year to $5.99B versus the consensus of $5.91B. On a segment basis, digital experience revenue grew 9.6% to $1.48B, subscription revenue climbed 12% to $5.79B and product revenue slipped 17% to $68M.
Remaining performance obligations jumped 13% to $20.44B, which was nearly half a billion more than the estimate.
Looking ahead, Adobe expects its fourth quarter revenue to range from $6.08B to $6.13B with a midpoint of $6.105B more than the estimate of $6.08B. Adjusted EPS is projected to range from $5.35 to $5.40, which is completely above the $5.33 estimate.
For the full year, Adobe increased its revenue outlook to range from $23.65B to $23.7B. The prior outlook was $23.5B to $23.6B.
“Adobe is the leader in the AI creative applications category with AI-influenced ARR surpassing $5 billion and AI-first ARR already exceeding our $250 million year-end target,” said Shantanu Narayen, chair and CEO, Adobe. “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.”