Q1 2025 Adobe Inc Earnings Call
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Good day and welcome to the Q1 FY 'twenty.
Steve: Five Adobe earnings Conference call. Today's conference is being recorded at this time I'd like to turn the conference over to Steve de S. V. P. D ex CFO and corporate finance interim head of IR. Please go ahead.
Good afternoon, and thank you for joining us.
Sheltering Orion: With me on the call today are sheltering in Orion Adobe's chair and CEO.
Sheltering Orion: David Wadhwani President of digital media.
And they will check rodolphe precedent of digital experience and Bandon executive Vice President and CFO.
Sheltering Orion: On this call, which is being recorded we will discuss adobe's first quarter fiscal year 2025 financial results.
Sheltering Orion: You can find our press release as well as pdfs of our prepared remarks and financial results on the <unk> Investor Relations website.
Sheltering Orion: The information discussed on this call, including our financial targets and product plans is as of today March 12 and <unk>.
Sheltering Orion: Contains forward looking statements that involve risks uncertainty and assumptions.
Sheltering Orion: Actual results may differ materially from those set forth in these statements for more information on those risks. Please review today's earnings release, and Adobe's SEC filings.
On this call, we will discuss GAAP and non-GAAP financial measures.
Sheltering Orion: Our reported results include GAAP growth rates as well as constant currency rates.
Sheltering Orion: During this presentation adobe's executives, we refer to constant currency growth rates unless otherwise stated non.
Sheltering Orion: The non-GAAP reconciliations are available in our earnings release and on the <unk> Investor Relations website.
Sheltering Orion: I will now turn the call over to shelter.
Shelter: Thanks, Steve Good afternoon, and thank you for joining us Adobe.
Speaker Change: Adobe had a record first quarter, we achieved 571 billion in revenue in Q1, representing 11% year over year growth GAAP earnings per share for the quarter was $4.14 and non-GAAP earnings per share was $5.08, representing 13% year over year growth.
Shelter: Yeah.
Our performance reflects the ongoing critical role that Adobe products play empowering the global digital economy.
In addition, given Q1 performance we are pleased to reaffirm our fiscal 'twenty five targets.
Shelter: Next week is Adobe summit, our flagship digital experience conference, where we will unveil the latest innovations across our portfolio.
Shelter: In addition, we will host our annual Investor meeting on March 18th and we wanted to preview what we will share about our growth strategy.
Shelter: Adobe success over the past decade has been driven by the exponential growth of the creative economy and the customer focused innovations we've delivered across creative cloud document cloud and experience cloud.
Shelter: Our groundbreaking solutions are empowering and ever expanding universe of users to imagine create and deliver standout content that drives exceptional experiences.
Shelter: Adobe's mission to change the world through personalized digital experiences is more critical than ever as digital continues to rapidly transform work life education and entertainment.
Shelter: AI represents a generational opportunity to re imagine our technology platforms to serve an increasingly large and diverse customer universe.
With creativity at the core we have been evolving our offerings and routes to market to anticipate the distinct needs of creative professionals and next generation creators.
Shelter: Marketing professionals agencies, and enterprises, and the broader set of consumers and business professionals.
Shelter: We believe this will drive continued growth and profitability.
Shelter: Creative professionals and creators need power and precision to bring their ideas to life across any media type.
Shelter: Next generation of creators want the flexibility of web and mobile tools. In addition to the power of the desktop.
They will benefit from the variety of AI models to Ideate and explore creative possibilities.
Adobe will serve this growing community with the most comprehensive set of web mobile and desktop applications delivered through various subscription tiers.
Shelter: In addition to creative cloud, we will offer new Firefly web app subscriptions that integrate and are an on ramp for our web and mobile products.
Shelter: While Adobe is commercially safe Firefly models will be integral to this offering we will support additional third party models to be part of this creative process.
The Firefly App will be the umbrella destination for new creative categories like ideation.
Shelter: We recently introduced and incorporated our new Firefly video model into this offering adding to the already supported image Victor and design models.
Shelter: In addition to monetizing standalone subscriptions for Firefly, we will introduce multiple creative cloud offerings that include Firefly tearing.
Shelter: Marketing professionals need to create an unprecedented volume of compelling content and optimize it to deliver personalized digital experiences across channels, including mobile applications email social media and advertising platforms.
Shelter: They are looking for agility and self service as well as integrated workflows with their creative teams and agencies.
Shelter: To achieve this enterprises require custom commercially safe models and agents tailored to address the inefficiencies of the content supply chain.
Shelter: With Adobe Gen studio and Firefly services Adobe is transforming how brands and their agency partners collaborate on marketing campaigns unlocking new levels of creativity personalization and efficiency.
Shelter: The combination of the Adobe experience platform and apps and Adobe Gen studio is the most comprehensive marketing platform to deliver on this vision.
Shelter: In addition to our direct sales force, we will leverage an ecosystem of partners and agencies to sell implement operate and deliver business outcomes to companies of all sizes.
We have accelerated one adobe deals by increasingly integrating our creative and marketing products into a single enterprise solution.
Shelter: We will continue to invest in sales capacity to deliver adobe wide offerings across business education and government.
Shelter: Business professionals and consumers want ease of use across web and mobile through a freemium model.
Shelter: They're looking for quick and easy AI first category defining creative applications to help them standout.
Shelter: While the need for creative expression continues to grow exponentially the real value is in integrating creativity and productivity and an all in one solution.
Shelter: Combination of express and acrobat is Adobe has opportunity to make the journey from document creation to consumption smoother than ever.
Shelter: AI assistant and acrobat reader and express will accelerate the delivery of new conversational energetic interfaces to add value to this combined offering.
Shelter: Revenue growth will be driven by distribution across web and mobile app stores.
Shelter: Partnerships with major software providers and focus on SMB and enterprise sales.
Our generative AI innovation is infused across the breadth of our products and its impact is influencing billions of IRR across acquisition retention and value expansion as customers benefit from these new capabilities.
Shelter: This trend is also reflected in our AI first standalone and add on products, such as acrobat AI assistant Firefly, App and services and Jen studio for performance marketing, which have already contributed greater than $125 million book of business exiting Q1 fiscal 'twenty five.
Shelter: And we expect this AI book of business to double by the end of fiscal 'twenty five.
Shelter: In summary by leveraging the breadth of our products and technology platforms in the era of AI and delivering new tailored offerings and solutions by customer groups, We will drive the engine of growth for the next decade.
Shelter: We will win by focusing on business professionals and consumers.
Shelter: And creative and marketing professionals with a unified product strategy and go to market.
We will start to provide financial visibility in these two new groups, starting this quarter and expand on this at our Investor Day at Summit next week.
Shelter: I'll now turn it over to David to discuss the momentum in our digital media business.
David Wadhwani: Thank you <unk> Hello, everyone. In Q1, we achieved revenue of $4 $2 3 billion, which grew 12% year over year.
David Wadhwani: We exited the quarter with $17 six 3 billion of digital media are are growing our ending are our book of business 12, 6% year over year, we continue to see healthy performance in both creative cloud and document cloud <unk>.
David Wadhwani: <unk> growth was driven by broad based adoption across our routes to market and product portfolio with particular strength in new offerings like Firefly services, and increasing number of one adobe deals and a growing base of web and mobile users document cloud continued to see strong organic demand continued optimizations and free.
David Wadhwani: To paid conversion journeys and AI assistant being released and additional languages, we drove strong performance across digital media and emerging markets. The results represent a good start to the fiscal year.
David Wadhwani: Creativity is going mainstream and I want to provide more color on the audiences. We serve we live in a visual first world where creative expression has become pervasive in every facet of life business professionals and consumers alike aimed to produce visually rich engaging content, whether it's presentation birthday invitation or social posts.
David Wadhwani: At the same time creative professionals creators and marketers are competing on the quality of their online presence and the personalized experiences they deliver to customers.
David Wadhwani: Turn to document cloud creative cloud and experience cloud to achieve their content goals.
David Wadhwani: Going forward as a result of AI advancements, we see incredible opportunity to serve customers with audience specific offerings business professionals and consumers are increasingly benefiting from deep integration between acrobat Express and Firefly, while creative professionals creators and marketers are investing and powerful workflows across.
David Wadhwani: Creative cloud, our new web and mobile creative applications, Firefly and Jen studio.
PDF continues to be the global standard for digital documents for business professionals.
David Wadhwani: Adobe Acrobat is revolutionizing the way people engage with them across mobile web and desktop.
David Wadhwani: Features like AI assistant and acrobat reader had been a game changer for everyone from sales teams to students looking for faster insights and smarter document editing and the ability to share links and collect comment has increased document productivity and helped drive additional adoption.
David Wadhwani: These new capabilities and our cross surface investments have paid off with acrobat and reader monthly active usage growing 23% year over year.
David Wadhwani: Our success with Acrobat has also shown us that weather for a sales presentation, a school project or a social media post business professionals and consumers are looking for an easy to use solution that helps them create visually compelling content that stands out from the crowd of generic templates in fact, a significant number of all documents created.
David Wadhwani: In acrobat, our original documents things like marketing content sales pitches presentations info graphics and cover pages.
David Wadhwani: We're making good progress in addressing this need by embedding express capabilities as a native experience in acrobat with a goal of boosting productivity and making the journey from document consumption to content creation smoother than ever.
David Wadhwani: Integration of Adobe Express features in acrobat allows users to create richer pdfs with AI generated cover pages embedded info graphics, and customized images and empowers users to create fully formed animated videos and other rich digital output.
David Wadhwani: We see numerous early indicators of user demand as express usage through acrobat has grown 10 X year over year.
David Wadhwani: Other highlights for business professionals and consumers include acrobat.
David Wadhwani: Acrobat AI assistance support for languages now includes English, French German Italian and Portuguese Spanish and Japanese acrobat AI assistant support for legal workflows with contract specific features.
David Wadhwani: New AI capabilities in express like clip maker for auto generation of video highlights and tax rewrite to help produce more effective copy.
David Wadhwani: Expanded acrobat integrations with Microsoft edge, Google Chrome, Gmail, and Google drive and strong adoption of linked sharing for Richard collaborative experiences have led to approximately 50% year over year growth in acrobat web monthly active usage.
David Wadhwani: Expanded express integrations now include Miro box slack web flow and hub spot. The express ecosystem also expanded to 225 plug ins more than doubling in the last year.
David Wadhwani: <unk> business and student adoption Express Onboarding, nearly 6000, new businesses in Q1, representing approximately 50% quarter over quarter growth students with access to express premium grew 85% year over year.
David Wadhwani: Key global customer wins include AT&T Delta Airlines, Disney Ernst and young IBM, Jpmorgan Chase, Microsoft Paramount and Qatar Airlines.
David Wadhwani: Creative professionals and the next generation of creators who make their living by designing and producing content are focused on standing out and bringing their unique creative visions to life with pixel perfect precision as we mark the 35th anniversary of Photoshop Adobe creative applications remain the solutions of choice for the world's creative <unk>.
<unk> across imaging design photography video illustration and three D.
David Wadhwani: We also see increasing demand from the next generation of creators who are looking for premium web and mobile applications as they begin their creative journeys.
David Wadhwani: To better serve these users we launched a new Photoshop mobile app and an expanded web experience delivering photoshops iconic image editing and design capabilities on the iPhone.
David Wadhwani: The mobile App and all new web experience are also included in current Photoshop plans offering established photoshop customers, a flexible ecosystem to create and edit across surfaces. The launch garnered over 30 million social engagements in just two weeks.
David Wadhwani: The release of the Adobe Firefly video model in February a commercially safe generative AI video model has been very positively received by brands and creative professionals, who have already started using it to create production ready content.
Speaker Change: <unk> can generate video clips from a tax prompt or image used camera angles to control shots create distinct scenes with three D sketches craft atmospheric elements and develop custom motion design elements, we're thrilled to see creative professionals and enterprises and agencies, including Dentsu, Pepsico and stacked Goldstein.
Speaker Change: <unk> success with the video model. Additionally, we recently launched an all new Firefly application. The most comprehensive destination to generate images vectors and now videos with unmatched creative control and direct integration with our industry, leading creative apps to seamlessly move from ideation to production.
Speaker Change: In addition to generating images videos and designs from text. The App lets you generate videos from key frames <unk> designs to precisely direct generations and translate audio and video into multiple languages.
Speaker Change: We also launched two new plans as part of this release Firefly standard and Firefly Pro and began the rollout of our third plant Firefly premium yesterday.
Speaker Change: Our engagement has been strong with over 90% of paid users generating videos.
Speaker Change: The launch of Photoshop on web and mobile and the release of the new Firefly application expands our growing family of web and mobile products, which now includes photoshop for creative imaging lightroom for photography expressed for design and Firefly for ideation and early production.
Speaker Change: These app serve as value added capabilities to our existing paid subscribers and as a frictionless premium onboarding experience to attract and monetize next generation creators. We're delighted with the early interest in these new offerings.
Other creative professional and creator highlights include continued strong adoption of <unk> and our products with Photoshop, Jenny I monthly active users at approximately 35% and lightroom Gen. AI monthly active users at 30% users have generated over 20 billion assets with Firefly the.
Speaker Change: The introduction of new features and premiere pro beta and after effects beta are helping editors and motion designer stay ahead of deadlines with AI features like media intelligence, which helps users find footage faster using natural language and capturing translation for 17 languages, which effortlessly expand video to global audience.
Speaker Change: We're honored to see visionary film makers around the world telling the season's most acclaimed stories using Adobe creative applications, including Academy Award winners of Nora and due in part to the.
Speaker Change: The launch of adaptive profiles, and distraction removal and Adobe lightroom, and Adobe camera, raw, which reduced tedious and repetitive tasks.
Japan broader community together and served as an opportunity for us to launch a number of new innovations, including performance improvements and Adobe illustrator, which accelerate features like pan and zoom and loading large files up to 10 X faster.
We had another great quarter in the enterprise with more customers turning to Firefly services and custom models to scale on brand content production for marketing use cases, including leading brands such as Deloitte digital IBM IPG health Martel and tapestry.
Speaker Change: <unk> for example has implemented a new and highly productive digital twin workflow using custom models and Firefly Youll hear more on how the combination of creativity and marketing is powering personalization at scale and enterprises.
Speaker Change: Adobe is incredibly well setup to take advantage of AI across creativity, we're rapidly delivering tailored innovations to serve the full continuum of content creation for business professionals and consumers creative professionals and creators and marketing professionals.
Speaker Change: Our expanding breadth of offerings is reaching a broader universe of customers and our incredible go to market strength and proven data driven operating model are propelling the growth of both flagship and new offerings, we will be unveiling more exciting product capabilities at Adobe Summit, and Max London and April I'll now pass it to Aneel.
Aneel: Thanks, David Hello, everyone.
Speaker Change: <unk> cloud had a strong Q1, achieving revenue of 1.41 billion for the quarter.
Aneel: Subscription revenue in the quarter was $1 3 billion reps.
Speaker Change: Representing 11% year over year growth.
Speaker Change: Our leading solutions spanning content data and customer journeys enable enterprises around the world to deliver personalized experiences at scale, helping customers drive both top line growth and productivity gains.
Speaker Change: In Q1, we delivered typical seasonal bookings and advanced our pipeline as enterprise customers initiated the execution of their critical 2025 priorities.
Speaker Change: Adobe experience platform and apps play a pivotal role in enabling unified customer experiences.
Speaker Change: With the addition of AEP, a assistant we extended the value and impact of experience platform by empowering more functions across the business with conversational interfaces for data ingestion insight generation audience segmentation and experienced delivery.
Speaker Change: We're now building on these advances and expanding AEP to enable intelligent orchestration of customer experiences with AI agents natively built in.
Speaker Change: We're empowering customers to make better use of their first party data and to drive more relevant AD experiences based on direct customer relationships.
Our portfolio spans the entire content supply chain from creation and production workflow and planning asset management delivery and activation through to reporting and insights.
Speaker Change: Now, we are bringing together creativity and marketing with the AI to help our customers realize the full potential of personalization at scale.
After now marketing professionals have been constrained by the number of content variations that can create and the number of journeys they can deploy.
Speaker Change: With Adobe didn't studio brands around the globe have been working with Adobe to bring creative and marketing teams closer together simplify their creation to activation process and unlock new levels of creativity insights and efficiency in marketing campaigns.
Speaker Change: Other highlights include strong demand for Adobe experience platform native applications with Q1 subscription revenue growing nearly 50% year on year.
Speaker Change: Please or real time, CDP collaboration delivering a secure environment for advertisers and publishers to jointly discover activated measured high value audiences for more relevant campaigns.
Speaker Change: Built on AEP real time CDP collaboration is purpose built for brands to connect and collaborate on first party data.
Speaker Change: Users can now measure the AD effectiveness directly with publishers, including NBC, Universal and Warner Brothers Discovery.
Speaker Change: Advertisers and agencies, including Alterra Mountain Company Group MMA maker Major League baseball and the Coca Cola company piloted the solution to deliver personalized and performance edge.
Speaker Change: Launch of the AAM cloud service accelerated with Publicis, sapient, which can reduce the labor cost of migration up to 35%.
Speaker Change: Industry analyst recognition in major analyst reports, including the Gartner Magic quadrant for digital experience platforms, and Gartner Magic quadrant for personalization engines.
Speaker Change: Strong demand for Firefly services and custom models as part of the <unk> solution with over 1400 custom model since launch.
Speaker Change: Jen <unk> for performance marketing wins at leading brands, including AT&T, Lenovo, Lenovo Lumen, Nebraska furniture Mart Redhead, Thai Airways and University of Phoenix.
Speaker Change: Strong partnership momentum a density of our performance marketing supporting AD creation and activation for Google's meta, Microsoft ads snap and ticker and several partners, including Accenture E Y IPG multiple and pwc offering vertical extension apps.
Speaker Change: Partnership with Dentsu to bring Jenny I from playground to production for our joint customers with Adobe dense studio that surplus.
Speaker Change: Key global customer wins, including Delta Airlines for IBM, MH, Australia, Microsoft PNC financial services and Tyson Foods.
Speaker Change: These customer wins addressed the ongoing evolution of the requirements of global brands for an integrated workflow spanning creativity and marketing.
Speaker Change: This success is driven by product integration and innovation across creative cloud and experience cloud increasingly delivered to Adobe Gen studio.
Speaker Change: Our one Adobe enterprise go to market engine enables customers to deliver personalized and on brand content at scale the.
Speaker Change: The combination of our integrated enterprise solutions across creativity, and marketing is a unique strength for adobe.
Speaker Change: Next week, we're excited to host Adobe Summit, our flagship digital experience conference in Las Vegas, where we will be joined by thousands of customers partners and developers from around the world.
Speaker Change: We will share our vision for how brands can apply the power of generative AI and agenda technology to achieve personalization at scale and look forward to highlighting a number of product innovations.
Speaker Change: I'll now pass it to dead.
Thanks Danielle.
Adobe's business has grown over the last decade by delivering world class products grouped within three clouds creative cloud document cloud and experience cloud in parallel we've continued to expand cross cloud offerings to better serve different customer groups. Examples include acrobat, which is reflected in creative cloud and <unk>.
Speaker Change: Document cloud.
Speaker Change: Jen studio, which includes creative cloud Xpress Firefly services and experience cloud.
Speaker Change: Enterprises, who want to engage with one adobe and combined creative seats with marketing automation and increasingly acrobat and express.
Speaker Change: We believe Adobe success will be driven by innovation and service of both business professionals and consumers and creative and marketing professionals.
Speaker Change: Reporting insights and the financial performance across these customer groups will provide a clear view of adobe's execution against our strategy.
Speaker Change: We will therefore provide overall adobe revenue digital media and digital experience segment revenue digital experience subscription revenue and digital media ending IRR in aggregate rather than by cloud as well as subscription revenue for business professionals, and consumers and creative and marketing professionals.
Speaker Change: Subscription revenue provider will primarily include revenue from SaaS managed services and term offerings.
Speaker Change: Business professionals and consumers group will consist of all subscription revenue from document cloud acrobat subscription revenue in creative cloud.
Speaker Change: And Adobe Express subscription revenue in creative cloud.
Speaker Change: All of which are a part of digital media.
Speaker Change: Creative and marketing professionals group will consist of all subscription revenue from digital experience as well as all of the remaining subscription revenue from creative cloud in digital media.
Speaker Change: In today's call I'll cover three main areas.
Speaker Change: Our Q1, FY 'twenty five results focusing on key growth drivers financial.
Speaker Change: Target and our supplemental disclosures.
Speaker Change: Now turning to the quarter.
Speaker Change: In the first quarter of FY 'twenty five Adobe achieved revenue of $5 71 billion, which represents 10% year over year growth or 11% in constant currency.
Speaker Change: GAAP diluted earnings per share in Q1 was $4.14 and non-GAAP diluted earnings per share was $5.08.
Speaker Change: Q1 business and financial highlights included digital media revenue of $4 $2 3 billion.
Speaker Change: Digital media ending IRR of $17 63 billion growing 12, 6% year over year.
Speaker Change: Digital experience revenue of one for $1 billion cash flows from operations of $2 four 8 billion.
Speaker Change: And exiting the quarter remaining performance obligations were $19 69 billion growing 12% year over year and <unk> growing 11%.
Speaker Change: In our digital media segment, we achieved Q1 revenue of $4 3 billion, which represents 11% year over year growth or 12% in constant currency.
Speaker Change: We exited the quarter was $17 six 3 billion of digital media <unk> growing our ending <unk> book of business 12, 6% year over year in constant currency.
Speaker Change: First quarter digital media growth drivers included <unk>.
Speaker Change: Strong growth for acrobat across all routes to market and geographies.
Speaker Change: Acrobat web and mobile growth driven by freemium funnel and App store optimizations.
Speaker Change: Growth in Adobe Express fueled by top of funnel improvements P. L. G journeys across acrobat and express and B to B customer Onboarding.
Speaker Change: Strength in user adoption and engagement of acrobat AI assistant driven by expansion of features including support for additional languages and contract intelligence capabilities.
Speaker Change: Growth of creative flagship offerings, driven by all apps stock imaging and photography.
Speaker Change: Continued momentum in accretive web and mobile offerings with 35% year over year ending paid subscription growth.
Speaker Change: And strong momentum in the enterprise driven by Firefly services and the continued benefit from the upsell motion of generative AI enabled offerings.
Speaker Change: Turning to our digital experience segment in Q1, we achieved revenue of 141 billion, which represents 10% year over year growth as reported and in constant currency.
Digital experience subscription revenue was 130 billion growing 11% year over year as reported and in constant currency.
Speaker Change: First quarter digital experience growth drivers included.
Speaker Change: Momentum for product offerings across content data and journeys.
Speaker Change: AEP in App subscription revenue growing nearly 50% year on year.
Speaker Change: Jen studio solutions, surpassing 1 billion and ending year, our book of business.
Speaker Change: Early momentum in Gen studio for performance marketing and adoption and pipeline.
Speaker Change: And improvements in overall enterprise retention.
Speaker Change: Turning now to our customer group performance.
Creative and marketing professionals group subscription revenue was $3 92 billion, which represents 10% year over year growth as reported.
Speaker Change: Business professionals and consumers groups subscription revenue was 153 billion, which represents 15% year over year growth as reported.
Adobe's effective tax rate in Q1 was 17.0% on a GAAP basis, and 18, 5% on a non-GAAP basis <unk> exiting the quarter was $19 69 billion growing 12% year over year or 13% in constant currency and CRP O growing 11%.
Speaker Change: Rent year over year or 12% in constant currency.
Speaker Change: Our cash flows from operations in the quarter were a Q1 record $2 four 8 billion and ending cash and short term investment position exiting Q1 was 744 billion.
Speaker Change: In Q1, we entered into share repurchase agreements totaling $3 to $5 billion and we currently have 14 4 billion remaining of our 25 billion authorization granted in March 2024.
Speaker Change: Let me now turn to our Q2, FY 'twenty five financial targets.
Speaker Change: For Q2, FY 'twenty five we are targeting total adobe revenue.
Speaker Change: $5 77 to 582 billion.
Digital media segment revenue of $4, two seven to $4 three zero billion Digi.
Speaker Change: Digital experience segment revenue of 143 to 145 billion.
Digital experience subscription revenue of $1 315 to 132 5 billion.
Speaker Change: GAAP earnings per share of $3 80 to $3 85.
Speaker Change: And non-GAAP earnings per share of $4 95.
Speaker Change: To $5.
Speaker Change: For Q2, we expect non-GAAP operating margin of approximately 45% and a non-GAAP tax rate of approximately 18, 5%.
Speaker Change: The year is off to a good start and assuming current macroeconomic conditions I am pleased to reaffirm our full year guidance for fiscal year 2025.
Speaker Change: This quarter's strong performance reflects adobe's long standing focus on innovation and meeting the growing needs of our broad customer base as.
As businesses increasingly prioritized digital transformation, we're uniquely positioned to deliver value through our highly differentiated solutions and proven go to market execution to unleash the power of creativity.
Speaker Change: Looking ahead, we're excited about the opportunities to drive growth for our customers as we continue to shape the future in the era of AI.
Speaker Change: We look forward to seeing you next week at our Investor meeting at Summit 2025, Thank you and we will now take questions operator.
Speaker Change: Thank you.
Speaker Change: I would like to signal with questions. Please press star one on your Touchtone telephone if you're joining US today, you say speaker phone. Please make sure mute function is turned off to allow your signal to reach our equipment.
Speaker Change: Again that is star one if you would like to signal with questions. The first question will come from Brent Thill with Jefferies.
Speaker Change: Good afternoon <unk>.
Took the AI book of business.
It would be low single digit percent of your total revenue for the year I guess many are asking when does this become more material how long does it take what what is required maybe just help us walk through the AI journey and and how that translates to revenue.
Speaker Change: Happy to brand if you take a step back and think about it we've always talked about the AI journey is three parts. The first is ensuring that we innovate. The second is all about tracking usage and ensuring value and monetization and I would say, we're really pleased across all.
Speaker Change: Three of those journeys.
Speaker Change: As you know we've had conversations with you folks as well in the past our cigna.
Speaker Change: A significant amount of the AI monetization is also happening in terms of attracting people to our subscription, making sure they're reading and having them drive higher value price.
Speaker Change: Skus, so when somebody buys creative cloud or when somebody buys document cloud in effect. They are actually monetizing AI, but in addition to that brand and what we wanted to do was give you a flavor for the new.
Speaker Change: Standalone products that we have when we talk about introducing acrobat AI assistant and rolling that out in different languages, Firefly and making sure that we have a new subscription model associated with that on the web Firefly services for the enterprise and Jen studio. So the 120.
Speaker Change: $5 million book of business that we talked about exiting Q1 only relates.
Speaker Change: To that new book of business and that's again stuff that we said, we would double but I think in terms of the impact also on the overall business that has had a material part, but if you play this out a little bit more and you talk about what investors can expect I think with the new fire.
Speaker Change: Fly App that's come out this is a web product with a new subscription ability to have the video model ability to have ideation is part of it think of it as then integrating Photoshop Web Express web and all of the other products. All of that is also upside and you know we really owe you.
Speaker Change: See a lot more innovation in that area and you'll see a lot more monetization in that area and again the last thing I'd, probably say Brian is that the whole idea was to start to tee. It up and then again at the FA meeting in order to continue to expand on how that is but net net I would say, whether it's innovation, having our own <unk>.
Speaker Change: <unk> integrating it across all of our products brand new revenue streams like Gen studio in the enterprise.
Speaker Change: And then usage and monetization I feel really good about it.
Speaker Change: Great. Thanks Shannon.
Brent Bracelet: And the next question will come from Brent bracelet with Piper Sandler.
Brent Bracelet: Thanks for taking the question good afternoon wanted to double click into the demand linearity you saw in the quarter I appreciate the commentary reaffirming 11 percentage will mitigate.
Brent Bracelet: Growth guide for the full year, but could you provide more color on trends you saw in the quarter across creative and document clouds here. Thanks.
Brent Bracelet: Yeah happy to do that.
Brent Bracelet: So again just to add digital media <unk> was at 12, 6%.
Brent Bracelet: Growth, which is in line with our expectation and also the mix.
Brent Bracelet: <unk> was inline with our expectations.
If you take a step back and you look at the demand and sort of the way the business played out this quarter.
Brent Bracelet: It's consistent with what we've seen historically and it's also we've seen sort of a broad based demand.
Brent Bracelet: For the products with the with the.
Brent Bracelet: A few highlights that I think are worth calling out first of all as it comes to business professionals and consumers.
This is obviously a huge market with billions of users that were going after and our strategy here is to really make sure that productivity that we deliver a solution that for productivity from consumption all the way to creation and that's really what we're doing with acrobat and express we saw a lot of momentum in these businesses, we talked about how.
Brent Bracelet: Acrobat is up.
Brent Bracelet: 33% year over year in terms of monthly active users were seeing stronger conversion on those on those users and that's been helping drive drive the business.
Brent Bracelet: AI assistant obviously, we introduced that last year continues to do very well and is certainly helping with that strategy of faster consumption and conversational experiences. We saw two acts quarter over quarter usage growth and AI assistant and.
Brent Bracelet: And of course in that context express has been a great product the.
Brent Bracelet: The product right now is just it's an amazing product use and so that also we've been investing in various theaters.
Brent Bracelet: Significantly from a marketing standpoint, but also from a partnership standpoint.
Brent Bracelet: We've doubled our partner ecosystem in the last year and now includes new new names like neuro and box and web flow and hub spot, we have 85% more access at 85% year over year growth in students with access to it we've been ramping up our students and campus Ambassador programs. We added 6000, new small medium businesses.
Brent Bracelet: To the to the express product as well.
Brent Bracelet: And even within the acrobat, where we've been doing more and we're seeing much more demand. We saw a 10 <unk> year over year engagement of express capabilities from acrobat users. So feeling really good about that.
Brent Bracelet: Audience.
Brent Bracelet: Group.
Brent Bracelet: On the creative pro and creator side.
And you mentioned this already but the introduction of the Firefly video model being used by density and Pepsi and then two in Pepsico and stag well.
Brent Bracelet: Firefly new offerings from standard to pro and just yesterday, we introduced a premium which is a much larger set of.
Brent Bracelet: Generative credits and all of those represent new monetization models, we introduced Photoshop mobile and web with one hundreds of articles 30 million social engagements. We were just listed as the apathy.
Brent Bracelet: Focused app on the App store over the weekend.
Brent Bracelet: We saw some great new advances for AI coming into light room web and mobile Premier also saw some great advances in terms of AI. So.
Speaker Change: Lots of momentum in that business and what's really exciting is that as we've done all of this innovation is shot and he was talking about we also have three big milestones coming up with summit next week, then any be shortly after that then Max London. Shortly after that and this is starting to show up obviously, we've talked about generations. We cross 20 billion generations, we're doing more than 1 billion <unk>.
Brent Bracelet: <unk> now.
Brent Bracelet: A month and 90% of people using Firefly the App also saw.
We are generating.
Brent Bracelet: Video as well as part of that but we also saw strong growth in the enterprise and all of you.
Brent Bracelet: Yes exactly.
Brent Bracelet: Cohort, who were saying I think in the enterprise, we see a lot of demand for creativity and marketing and AI coming together every CMO that we talk to every agency that we work with they're all very interested in how generative AI can be used to transform how the content supply chain works and with the Gen studio offering which combines the creativity and the marketing.
Brent Bracelet: We've seen tremendous traction and we saw a number of both customer wins as well as number of agency partners and we look forward to unveiling a lot more of this at summit.
Brent Bracelet: So off to a great start I think with innovation new offerings in that and you can expect to see new offerings in tiers in the months ahead.
Brent Bracelet: I'll look forward to talking to you next week.
Speaker Change: And the next question will come from Keith Weiss with Morgan Stanley.
Speaker Change: Excellent. Thank you guys for taking the question and thank you for the additional disclosure on I think is a really interesting you kind of breaking down they created a marketing professional versus the busy professionals and consumer groups.
Speaker Change: And following on that last question.
Speaker Change: Correct me, if I'm wrong, but it's still kind of bullish to me that the.
Speaker Change: Business professionals in consumer group had a stronger growth rate creative at 15% creative and marketing professionals all of it behind because it feels like business professionals in consumer group those products would be faster sales cycle, particularly on the consumer side of the equation faster adoption, the creative and marketing professionals. This broader solutions that youre trying to sell would have.
Speaker Change: Longer sales cycle. So the question is am I thinking about that right and are you seeing any indications that that creative and marketing professional group, whether it's in your pipelines or the activity youre seeing could catch up with what we're seeing from the business professionals and consumer groups.
Speaker Change: Well Keith.
Speaker Change: Part of our goal was really to start to provide insight into by the customer groups are we're starting to see it and to some degree you know when people are wondering how we're actually driving creative and.
Speaker Change: The reality is that when you think about the Gen studio set of products, which we announced that as a $1 billion book of business.
Speaker Change: <unk> is also a $1 billion book of business and the creative professional that's actually addressing the entire content supply chain and so in terms of that growth rate as we add new subscriptions like the Firefly app subscription add more video add more functionality.
Speaker Change: What we're doing with gender studio that growth rate as well, it's a very large untapped opportunity and people have been asking us questions about the strength of the creative market as well as the strength of that market within the enterprise.
Speaker Change: We think thats, a large tam will share more so I think you're thinking of it right, which is to say that.
Speaker Change: $5 billion book of business that we built for digital marketing, that's really helping the content and the creative economy, and so that was the idea behind giving you a window into that and the metrics associated with that are subscription and different kinds of offerings on the other side of the equation as well to your point.
Speaker Change: What we wanted to do is reflect the fact that the investments that we made in both acrobat and express continuing to ensure distribution. When we think about the monthly average users. If you take it in aggregate I mean Adobe has.
Speaker Change: Hundreds of millions of people, who are using monthly are using our products and that will be really the early metrics and the indicators of our express an acrobat continued to grow so I'm glad that you found the additional disclosure beneficial and that was the idea to Brent earlier question as well.
Speaker Change: I just wanted to clarify I mean, we are not taking all of the revenue that we see in digital media and digital experience and calling that AI revenue, but relative to what I've seen from any other company.
Speaker Change: In our particular space, we've actually been pleased by how much of it whether it's additional tiers of AI and.
Speaker Change: Digital experience of what we are seeing across.
Acrobat as well as the creative professional space, yes.
There's been good adoption of AI in that and so that was the other intent to start to show that so that we can talk about it more at the FDA meeting.
Speaker Change: Extending can I sneak one last one in for Mr. Darren.
Speaker Change: It's great to see you guys take advantage of the pullback in the stock price by accelerating the share repurchase which picked up this quarter could these and it could just pace of share repurchases can you guys sustain this throughout the year or is that more of a.
Speaker Change: One time.
Speaker Change: Pickup.
Yeah, So if I take a step back and you think about the last four quarters, we have repurchased almost $11 billion and we've always talked about if there's opportunities to be opportunistic along the way we would take advantage of it and I think that's what you saw play out in Q1, we've got a strong point of view about the financial profile through.
Speaker Change: The course of the year happy to reaffirm guidance, but we're going to drive that.
Speaker Change: With strong operating margins strong cash flow delivery and be strong capital allocators throughout the year. So we feel good about where we sit and if there's opportunities to be opportunistically well. Thank you. It is definitely.
A lot of confidence that we feel and you know what what we are seeing is the opportunities ahead of us.
Speaker Change: Yes, it's great to see you guys, putting your money, where your mouth is by accelerating the share repurchase it definitely helps.
Speaker Change: Okay.
Speaker Change: And the next question will come from Kash.
Speaker Change: Rankin with Goldman Sachs.
Alright. Thank you very much much appreciate the disclosure on the color.
And everything that goes with a chunk of a question for you when you pivoted the company to a new business model through cloud.
Speaker Change: Initially there was a lot of skepticism then you prove to us that the Tam was actually larger and.
Speaker Change: In the new creative meets the cloud cycle and the company was able to accelerate through the transition and perhaps even better margins and by expanding the Tam necessary. So as you look at AI right now.
Speaker Change: One bearish argument that one could make which iron subscribe to is that you're playing defense and that AI is the cost of staying in business and keeping us relevant to your creative base, but how do you look since you've been through this one big ship before you've got a lot of experience.
Does your conviction on how truly incremental AI can be for your growth.
Speaker Change: Could we be at similar junction, where you're poised to get into the next cycle is actually bigger Tam not put words in your mouth, but even maybe dare I say the potential to accelerate off of the good growth that we've seen so far thank you so much.
Well Kash.
Speaker Change: What I appreciate about the question as you know this is why we wanted to really tee up in front of the FDA meeting, but without a doubt as David described the opportunity for the business professional and consumers I think you'll start to see and we'll share more at the FAA meeting that they are billions of people that we can bring into.
Speaker Change: The fall for creativity and productivity and talk more about how we are with the distribution that we have and with the monthly average users that we have monetize that much like we've monetized acrobat and we definitely believe that it is a massive massive opportunity I think it's the same thing across creative they are more cream.
Does that are entering and again.
David Wadhwani: I will preview a little bit of what David will share, which is when you think about the web and mobile offerings that we're providing to attract more people to our platform as creative professionals and next generation creators.
David Wadhwani: The number of people, who want to enter that profession is significantly larger than it's ever been and so you know with products like <unk>.
David Wadhwani: Florida shop on web and mobile as well as Firefly App. That's clearly the intent to show how that is a subscription service and attracting the next generation creators.
David Wadhwani: Will be a tailwind and then when you put this together in the enterprise I mean, hopefully what you also see.
David Wadhwani: As part of the additional disclosures is that the enterprises continue to be a material part of our business and material part of our growth because they are in order to do personalization at scale as analyst talking about theres going to be more content Thats produced there is going to be more content, that's accurately inserted into ads.
David Wadhwani: Systems in social media, and so again, I think setting the stage for how thats, a larger opportunity, but if you look at it from not just the length of we were marketing, but look at the lens of Hey, that's a content business for us in the enterprise.
We will again outline how that is only going to be a growing opportunity. So no question in my mind. All three of these are actually going to accelerate in terms of the Tam and then we have to innovate and execute against that so I am more excited about the larger opportunity without a doubt as a result of AI.
David Wadhwani: We've talked about this cash if you don't take advantage of AI, it's a disruption in our particular case.
David Wadhwani: The intent is clearly to show how it's a tailwind.
David Wadhwani: Excellent and then one follow up and very quick on promise if I can with the turbulence in the markets with <unk>.
Trade wars et cetera, tariffs et cetera, how do you feel your customer base customer base is going to behave is everything going to be on track from what you can tell we're talking to your customers or are they kind of perplexed by what's going on in policy. Thank you. So much invested for me.
David Wadhwani: Well I mean, I think we sort of said assuming current macroeconomic conditions I mean, we have.
David Wadhwani: A diverse business we're off to a good start in the conversations that we're having in all of us have conversations with all of our other peers.
David Wadhwani: I think we have a seasoned management team that will navigate it but customers.
David Wadhwani: I think we're all jointly trying to understand what happens in the.
David Wadhwani: The economy, but I am.
David Wadhwani: Tariffs et cetera don't really impact Adobe the way they impact other businesses and so you know.
David Wadhwani: We are optimistic.
David Wadhwani: Thank you so much.
Speaker Change: Thank you and our next question will come from Mark <unk> with Bernstein research.
David Wadhwani: Okay.
David Wadhwani: Thank you very much.
David Wadhwani: Dan can you give us more color.
David Wadhwani: Why you're changing the categorization of revenue removing the historical document cloud and creative cloud is this driven.
David Wadhwani: Driven by the one Adobe sales motion is express now sold predominantly with document cloud how should we think about the drivers.
David Wadhwani: Yeah. So thanks.
Speaker Change: Thanks for the question Mark as we laid it out.
Speaker Change: We talk about increasingly driving cross cloud offerings, we're already doing it today, we're going to be doing more of it going forward and as you look at individuals increasingly buying offerings.
Speaker Change: If you look at enterprises increasingly buying solutions and bringing different parts of our portfolio together to meet their highest value needs around these two groupings of the customers.
Speaker Change: It really is it is meant to just.
Speaker Change: Draw a highlight to our strategy.
Speaker Change: And how we're executing against that strategy ongoing for go forward basis. Our success is going to be driven by the way, we innovate into the intersection of productivity and creativity into the intersection of creativity and marketing and those intersections are highlighted by these two groupings of customers.
Speaker Change: And so the intent around this is to really bring to life, how we're driving our strategy. How we're executing against it provides the best insight and how the company is performing on a go forward basis and market is two specific things that we've heard is feedback from all of you folks are you understand.
Speaker Change: There's the acrobat within the creative cloud and document cloud this pulls out the business in order to show the momentum and the opportunity in that business and to your question about one Adobe, Yes, I mean, the Gen studio solution is without a doubt taking you know seats off.
Products like Photoshop or the creative cloud, it's adding express <unk> for every market and there we have Firefly services and custom models and so the more we sell that as one enterprise offering and we wanted to accelerate the sale of that as a strategic partnership that is now also.
Speaker Change: So all reflected in one of those revenue slices. So we.
Speaker Change: We believe that the additional disclosure will also you know give us give you more visibility in the routes to market.
Speaker Change: That makes a lot of one quick other one should we expect the new disclosure on the AI <unk> something that we'll be getting quarterly or periodically updated.
Speaker Change: Periodically.
Gordon: Gordon Thank you.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: And the next question will come from Alex Zukin with Wolfe Research.
Alex Zukin: Hey, Thanks, guys for taking the question and I will join the chorus of those.
Alex Zukin: Commenting positively on some of the new new numbers, particularly the AI book of business and Thats, where I wanted to ask the question.
Alex Zukin: Basically.
Alex Zukin: Youre going to give us a number we're going to ask for more so in that spirit. If you look at the $1 25, and you think about the segmentation between assistant Firefly Gen studio is there a triangulation around maybe how much what the percentages of our for the break.
Alex Zukin: Out of those and maybe stack rank the growth rates that are going to get you to double that by the end of the year and then kind of similarly, if you think about if that $1 25 is impacting or where the <unk> are more towards the creative and marketing professional or the business professionals.
Alex Zukin: Yes.
Alex Zukin: Great question Alex.
Brent Bracelet: First of all if you look at the mix of these things.
Brent Bracelet: AI assistance has been around for about three.
Brent Bracelet: Three quarters or.
Brent Bracelet: Four quarters now.
Brent Bracelet: <unk> service has been around for about four quarters as well Gen studio was introduced late in Q4 of last year. So that gives you a little bit of a sense of the composition is going to sort of like.
Brent Bracelet: Based on the tenure of these products in the market, but if we if we take a step back and you look at the growth trajectory again, we were talking 195.
Brent Bracelet: 125 million doubling in the next nine months. It gives you a sense of the scale of these businesses and really the momentum that's in the business and when you when you look at it.
The core innovation that chart and you talked about.
Brent Bracelet: Led to a lot of utilization and now we're starting to get to a point, where we can we can monetize it.
Brent Bracelet: For Firefly, we have imaging vector design video voice video and voice coming out just a couple of weeks ago off to a good start.
Brent Bracelet: I know there've been some questions about how important is commercially safe the safety of the models, they're very important a lot of enterprises are turning to them for that for the quality of the breadth, but also the commercial safety the creative control that we give them around being able to really match structure style set key frames for precise video generate.
Brent Bracelet: <unk> three D image image to video.
Brent Bracelet: <unk> also on our roadmap and we will share more about this next week of third party models really establishes us as the one stop shop for anything you need to do with creativity and then when you ladder that into a Firefly standalone offer.
Brent Bracelet: With multiple tiers with probe standard premium and pro when you look at that integrated into creative.
Brent Bracelet: <unk> you could imagine further hearing there when you look at the work that we're doing in conjunction with the mills team around Gen studio and making sure all of these models in this entire platform, including third party models are exposed within.
Brent Bracelet: Within our Gen studio offer what it's really doing it it's evolving away from the conversation being about the model to the conversation being about the workflows in the integration and the application tier and the agent base things that we'll be talking to you more about and that really plays to our differentiation our strength and our audiences that we saw.
Brent Bracelet: Serve and that's why you see the bullishness of that 125 doubling in the next nine months.
Brent Bracelet: I'm glad that you find the.
Brent Bracelet: Sort of information useful.
Brent Bracelet: Give you a little bit more color as well on that I remember with acrobat, we have AI assistant that separate. So this is only the separate acrobat AI assistant. So the majority of that revenue is actually creative because as we can continue to report the AI assistant as part of the acrobat SKU, we would not count that if that gamers.
Brent Bracelet: Out of an acrobat premium skus, so color wise so far.
Brent Bracelet: Creative actually represents.
Brent Bracelet: The majority of that.
Brent Bracelet: But as you know the acrobat is doing great.
Brent Bracelet: That's very very helpful. I guess, maybe just to follow along there you've seen where we've seen a lot of consolidation start to happen with within the AI realm.
Brent Bracelet: The model companies or the agent even emerging the agenda companies, maybe just remind us on how youre thinking about your approach towards organic versus inorganic innovation here given just the plethora of functionality that you are releasing across the board.
Brent Bracelet: As it relates to the core creative models, we will have our commercially safe as David said.
Alex and so you know within Firefly as an application and within each of our.
Brent Bracelet: Integrations in Photoshop et cetera, I expect Firefly, we've also signaled and we've shown how we would support third party models associated with that and so whether it's a custom model that we create for one of our enterprise customers. I think if you look at it <unk> been a couple of articles this week about how whether its este Lauder.
Brent Bracelet: Who is going to be building their models built on ahs and leveraging at a company like publicists, that's going to be taking these models.
Brent Bracelet: So our core imaging video franchise will have our models as it relates to text, we have support for other third party models and so.
Brent Bracelet: I think it's a very practical and is the right one and we will support all of the creative third party models that people wanted to support whether it's Acosta model, we create for them or whether it's any other third party model within Firefly is an app and within Photoshop youre going to see support for that as well and so think of it as we are the way in which those models actually.
Brent Bracelet: Deliver value to a user and so it's actually just like we did with Photoshop plug ins in the past youre going to see those models supported within our flagship obligations hopefully that gives you a sense.
Mark Murphy: And the next question will come from Mark Murphy with J P. Morgan.
Mark Murphy: Thank you very much I was wondering if you can just comment on what youre sensing fundamentally in terms of advertising activity.
Mark Murphy: <unk> spending trends in the week of some very.
Mark Murphy: Choppy results from multiple airlines the last several days.
Speaker Change: Multiple retailers what is giving you the resilience.
Speaker Change: To reaffirm the FY 'twenty five guidance win.
Speaker Change: Some of that is a really huge sectors in the economy.
Speaker Change: And they seem to be.
Speaker Change: Encountering some some turbulence I'm just wondering if there you basically see them continuing to create and market and advertise despite this environment.
Speaker Change: At the end of the day Mark leaders believe that digital is going to continue to be a fundamental part of the economy and the importance.
Speaker Change: Is going to continue and now there isn't a single company that I've talked to that doesn't say digital to your point as other companies.
Speaker Change: View macroeconomic conditions that may be particular to them.
Speaker Change: The onus is on every company, that's serving them with technology to demonstrate how the technology helps whether its the top line or the efficiency, but whether it's top line growth or efficiency or both.
Speaker Change: We're not going to go out of style as it relates to any enterprise, saying, how can I use technology to accomplish my objectives.
Alex Zukin: Okay, and then I appreciate that sounds like a very quick follow up on Alex's question.
Speaker Change: When that.
Alex Zukin: The $125 million.
Speaker Change: <unk> doubling in the next nine months.
Speaker Change: Do you think it's going to be the same competition or if there is something that would be coming in from the video model that might make.
Speaker Change: It might change the mix there in the next nine months.
Speaker Change: The video model is part of the.
Creative Firefly App that will be part of this.
Mark Murphy: I think a lot of these great questions Mark I mean at the FAA meeting, we will try and give more color as well as to what we are seeing but we wanted to at least start to outline what products were in there the growth rates that we expect and how we're executing on as I said, the innovation usage understanding and off.
Speaker Change: <unk> bees as monetization so we.
Speaker Change: We'll also I know keep track of the ongoing questions and address them at the FAA meeting as well in market.
Speaker Change: And our last question will come from <unk> <unk> with Barclays.
Speaker Change: Okay, Great Hey, guys. Thanks for taking my question here and squeezing me in I'll keep it to one.
Speaker Change: David maybe for you.
Speaker Change: It's great to see the Firefly app peers that customers can add to their existing subscriptions and.
Speaker Change: And maybe to shorten this point this is a better topic for FAA day, but I'm wondering if we could just if we could just talk about how do you envision sort of the potential attach rate there.
Speaker Change: Firefly is clearly an unprecedented offerings. So maybe that's really tough to answer but are there any products that that debt.
Speaker Change: Maybe adobe as seen in the past like Adobe stock or any others that you will look at as sort of a framework for what that adoption curve could look like.
Speaker Change: Yes, I think so if we take a look if you take a step back.
Speaker Change: The reason, we're so excited about the Firefly App is is really twofold, one is exactly where youre going to market and what youre asking about which is the with every conversation we've had with creative professionals.
Speaker Change: We know that wherever they are they are under.
Speaker Change: An enormous amount of pressure to produce more.
Speaker Change: And this this cohort of creative professionals, we see very strong attach and adoption of generative AI features we put in the product partially because there.
Speaker Change: Well integrated and very discoverable, and and because they just work and people get a lot of value out of that so what you will see is youll start to see us integrating these new capabilities. These premium capabilities that are in the Firefly standard pro and premium plans more deeply into the creative workflows to more people.
Speaker Change: We'll have the opportunity to discover them.
Speaker Change: And of course as part of that I think you can expect to see what we've done all along is look at where the usage is look at where the excitement is and make sure we get the pricing in that hearing right in a way that maximizes the opportunity.
Speaker Change: For our customers and maximizes the opportunity and the value that Adobe and our shareholders get as part of that too so that will be a big area and big opportunity and we see a lot of potential there as we look ahead. The other part that I'd want to make sure. It doesn't get lost in this is how relevant this firefly experience is four noncore.
Professionals as well as this next generation of creators that we keep talking about.
Speaker Change: And if we look at the early adoption rates of the Firefly.
Paid plan it really tells US both of these stories, we have a high degree of conviction that it's adding value and being used by creative professionals, but it's also proving to be a good onboarding opportunity for next generation approach I'm, sorry next generation project <unk> in general and that's where as Sean mentioned earlier, there is an increasing opportunity to merge our.
Speaker Change: Our web and mobile offerings.
Speaker Change: Around not just the generative capabilities, but what you do with the content you generate with Photoshop web and mobile express web and mobile.
Speaker Change: You can imagine the other capabilities coming around video as well. So we're excited about Firefly services and the monetization capabilities there in both directions, new users and also value in our pool for our existing base.
Speaker Change: And sockets since that was the last question. Thank you and maybe just a quick summary.
Things that I would leave you all with is Q1 was a strong start we were pleased with our performance. When you think about the addressable markets that we have as we think about how we serve the business professional and the consumer and the creative professional and the marketing professional.
Speaker Change: We believe that that's an immense opportunity that's only going to grow as a result of AI.
Speaker Change: We're pleased with how AI is now infused across all of our products and how we are further tailoring the breadth of our products to serve these customer groups in a in a way in which we delight them and we're starting to outline how the monetization will be different for each one of these and applicable for the customer group debt.
Speaker Change: We're serving and we really continue to believe that this will drive growth and profitability for us as a company in 'twenty five and beyond and so we look forward to joining you all at the fab.
Speaker Change: Meeting and thank you for joining us today.
Speaker Change: Thank you that does conclude today's conference. We do thank you for your participation and have an excellent day.