Adobe’s (ADBE) latest financial results beat Wall Street forecasts on both the top and bottom lines and were issued days after the software company introduced a new suite of generative artificial intelligence (A.I.) products.
The Silicon Valley-based company announced revenue of $4.89 billion U.S., up 10% from a year earlier and ahead of analysts’ consensus forecast at $4.87 billion U.S.
In terms of profit, Adobe said it earned $4.09 U.S. a share during its fiscal third quarter, beating Wall Street expectations for $3.98 U.S. per share.
The company said its digital media segment saw revenue increase 11% from a year earlier to $3.59 billion U.S., while its digital experience revenue grew 10% to $1.23 billion U.S. in the quarter ended September 1.
Adobe, which is known for products such as Photoshop, Illustrator and PDF, earlier this week introduced new A.I. tools and enhancements for consumers to take advantage of.
This past spring, Adobe launched its Firefly suite of A.I. tools that includes a popular text-to-image feature. The company said that, so far in 2023, its customers have produced more than two billion images using its A.I. products.
Executives at Adobe say the company is now looking to raise prices on its A.I. features and planning to increase prices by 8% to 10% for its creative cloud plans starting on November 1.
Adobe also raised its forward guidance. For the current quarter, the company is forecasting revenue of between $4.975 billion U.S. and $5.025 billion U.S., with profits of $4.10 U.S. to $4.15 U.S. per share.
That guidance is above Wall Street consensus estimates of $5 billion U.S. in revenue and profits of $4.06 U.S. per share.
RBC Capital Markets currently has a “buy” equivalent rating on Adobe’s stock and a $615 U.S. price target.
Adobe’s share price has risen 80% over the last 12 months and currently trades at $552.16 U.S. per share.
