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Adobe (NASDAQ: ADBE)
Q1 2025 Earnings Name
Mar 12, 2025, 5:00 p.m. ET
Contents:
- Ready Remarks
- Questions and Solutions
- Name Contributors
Ready Remarks:
Operator
Good day, and welcome to the Q1 FY ’25 Adobeearnings convention name In the present day’s convention is being recorded. Presently, I might like to show the convention over to Steve Day, SVP, DX, CFO and company finance, interim head of IR. Please go forward, sir.
Steve Day — Chief Monetary Officer and Senior Vice President, Digital Expertise
Good afternoon, and thanks for becoming a member of us. With me on the decision at this time are Shantanu Narayen, Adobe’s chair and CEO; David Wadhwani, president of digital Media; Anil Chakravarthy, president of digital expertise; and Dan Durn, government vice chairman and CFO. On this name, which is being recorded, we are going to talk about Adobe’s first quarter fiscal 12 months 2025 monetary outcomes. You could find our press launch, in addition to PDFs of our ready remarks and monetary outcomes on Adobe’s investor relations web site.
The data mentioned on this name, together with our monetary targets and product plans, is as of at this time, March twelfth, and comprises forward-looking statements that contain dangers, uncertainty, and assumptions. Precise outcomes might differ materially from these set forth in these statements. For extra data on these dangers, please evaluation at this time’s earnings launch and Adobe’s SEC filings. On this name, we are going to talk about GAAP and non-GAAP monetary measures.
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Our reported outcomes embody GAAP progress charges, in addition to fixed foreign money charges. Throughout this presentation, Adobe’s executives will discuss with fixed foreign money progress charges except in any other case said. Non-GAAP reconciliations can be found in our earnings launch and on Adobe’s investor relations web site. I’ll now flip the decision over to Shantanu.
Shantanu Narayen — Chairman and Chief Government Officer
Thanks, Steve. Good afternoon, and thanks for becoming a member of us. Adobe had a report first quarter. We achieved $5.71 billion in income in Q1, representing 11% year-over-year progress.
GAAP earnings per share for the quarter was $4.14, and non-GAAP earnings per share was $5.08, representing 13% year-over-year progress. Our efficiency displays the continuing crucial function that Adobe merchandise play in powering the worldwide digital economic system. As well as, given Q1 efficiency, we’re happy to reaffirm our fiscal ’25 targets. Subsequent week is Adobe Summit, our flagship Digital Expertise Convention, the place we are going to unveil the most recent improvements throughout our portfolio.
As well as, we are going to host our annual investor assembly on March 18th, and we needed to preview what we are going to share about our progress technique. Adobe’s success over the previous decade has been pushed by the exponential progress of the artistic economic system and the customer-focused improvements we have delivered throughout Inventive Cloud, Doc Cloud, and Expertise Cloud. Our groundbreaking options are empowering an ever-expanding universe of customers to think about, create, and ship standout content material that drives distinctive experiences. Adobe’s mission to vary the world by means of personalised digital experiences is extra crucial than ever as digital continues to quickly rework work life, schooling, and leisure.
AI represents a generational alternative to reimagine our know-how platforms to serve an more and more giant and numerous buyer universe. With creativity on the core, we have now been evolving our choices and routes to market to anticipate the distinct wants of artistic professionals and next-generation creators, advertising and marketing professionals, businesses and enterprises, and the broader set of customers and enterprise professionals. We consider this can drive continued progress and profitability. Inventive professionals and creators want energy and precision to convey their concepts to life throughout any media kind.
The subsequent era of creators needs the pliability of internet and cellular instruments along with the ability of the desktop. They may profit from the number of AI fashions to ideate and discover artistic potentialities. Adobe will serve this rising group with essentially the most complete set of internet, cellular, and desktop functions delivered by means of varied subscription tiers. Along with Inventive Cloud, we are going to supply new Firefly internet app subscriptions that combine and are an on-ramp for our internet and cellular merchandise.
Whereas Adobe’s commercially secure Firefly fashions will probably be integral to this providing, we are going to assist further third-party fashions to be a part of this artistic course of. The Firefly app would be the umbrella vacation spot for brand new artistic classes like ideation. We not too long ago launched and included our new Firefly video mannequin into this providing, including to the already supported picture, vector, and design fashions. Along with monetizing stand-alone subscriptions for Firefly, we are going to introduce a number of Inventive Cloud choices that embody Firefly tiering.
Advertising and marketing professionals must create an unprecedented quantity of compelling content material and optimize it to ship personalised digital experiences throughout channels, together with cellular functions, electronic mail, social media, and promoting platforms. They’re searching for agility and self-service, in addition to built-in workflows with their artistic groups and businesses. To attain this, enterprises require customized, commercially secure fashions and brokers tailor-made to deal with the inefficiencies of the content material provide chain. With Adobe GenStudio and Firefly Companies, Adobe is remodeling how manufacturers and their company companions collaborate on advertising and marketing campaigns, unlocking new ranges of creativity, personalization, and effectivity.
The mixture of the Adobe Expertise platform and apps and Adobe GenStudio is essentially the most complete advertising and marketing platform to ship on this imaginative and prescient. Along with our direct gross sales pressure, we are going to leverage an ecosystem of companions and businesses to promote, implement, function, and ship enterprise outcomes to firms of all sizes. We now have accelerated One Adobe offers by more and more integrating our artistic and advertising and marketing merchandise right into a single enterprise resolution. We are going to proceed to put money into gross sales capability to ship Adobewide choices throughout enterprise, schooling, and authorities.
Enterprise professionals and customers need ease of use throughout internet and cellular by means of a freemium mannequin. They’re searching for fast and straightforward AI-first category-defining artistic functions to assist them stand out. Whereas the necessity for artistic expression continues to develop exponentially, the actual worth is in integrating creativity and productiveness in an all-in-one resolution. The mixture of Specific and Acrobat is Adobe’s alternative to make the journey from doc creation to consumption smoother than ever.
AI Assistant in Acrobat Reader and Specific will speed up the supply of latest conversational and agentic interfaces so as to add worth to this mixed providing. Income progress will probably be pushed by distribution throughout internet and cellular app shops, partnerships with main software program suppliers, and concentrate on SMB and enterprise gross sales. Our generative AI innovation is infused throughout the breadth of our merchandise, and its influence is influencing billions of ARR throughout acquisition, retention, and worth enlargement as clients profit from these new capabilities. This energy can also be mirrored in our AI-first stand-alone and add-on merchandise corresponding to Acrobat AI Assistant, Firefly App and Companies, and GenStudio for Efficiency Advertising and marketing, which have already contributed better than $125 million ebook of enterprise exiting Q1 fiscal ’25.
And we count on this AI ebook of enterprise to double by the top of fiscal ’25. In abstract, by leveraging the breadth of our merchandise and know-how platforms within the period of AI and delivering new tailor-made choices and options by buyer teams, we are going to drive the engine of progress for the following decade. We are going to win by specializing in enterprise professionals and customers and inventive and advertising and marketing professionals with a unified product technique and go-to-market. We are going to begin to present monetary visibility in these 2 new teams beginning this quarter and develop on this at our Investor Day at Summit subsequent week.
I am going to now flip it over to David to debate the momentum in our digital media enterprise.
David Wadhwani — President, Digital Media
Thanks, Shantanu. Howdy, everybody. In Q1, we achieved income of $4.23 billion, which grew 12% 12 months over 12 months. We exited the quarter with $17.63 billion of digital media ARR, rising our ending ARR ebook of enterprise 12.6% 12 months over 12 months.
We proceed to see wholesome efficiency in each Inventive Cloud and Doc Cloud. Inventive progress was pushed by broad-based adoption throughout our routes to market and product portfolio with specific energy in new choices like Firefly Companies, an growing variety of One Adobe offers and a rising base of internet and cellular customers. Doc Cloud continued to see robust natural demand, continued optimizations in free to paid conversion journeys and AI Assistant being launched in further languages. We drove robust efficiency throughout digital media in rising markets.
The outcomes symbolize a superb begin to the fiscal 12 months. Creativity goes mainstream, and I wish to present extra shade on the audiences we serve. We dwell in a visual-first world the place artistic expression has develop into pervasive in each side of life. Enterprise professionals and customers alike goal to supply visually wealthy, participating content material, whether or not it is a presentation, birthday invitation or social publish.
On the identical time, artistic professionals, creators, and entrepreneurs are competing on the standard of their on-line presence and the personalised experiences they ship to clients. They flip to Doc Cloud, Inventive Cloud, and Expertise Cloud to attain their content material objectives. Going ahead, on account of AI developments, we see unbelievable alternative to serve clients with audience-specific choices. Enterprise professionals and customers are more and more benefiting from deep integration between Acrobat, Specific, and Firefly whereas artistic professionals, creators, and entrepreneurs are investing in highly effective workflows throughout Inventive Cloud, our new internet and cellular artistic functions, Firefly and GenStudio.
PDF continues to be the worldwide customary for digital paperwork for enterprise professionals, and Adobe Acrobat is revolutionizing the best way folks have interaction with them throughout cellular, internet, and desktop. Options like AI Assistant in Acrobat and Reader have been a game-hanger for everybody from gross sales groups to college students searching for quicker insights and smarter doc modifying. And the power to share hyperlinks and click on feedback has elevated doc productiveness and helped drive further adoption. These new capabilities and our cross-service investments have paid off with Acrobat and Reader month-to-month energetic utilization rising 23% 12 months over 12 months.
Our success with Acrobat has additionally proven us that whether or not for a gross sales presentation, a faculty undertaking or a social media publish, enterprise professionals and customers are searching for an easy-to-use resolution that helps them create visually compelling content material that stands out from the gang of generic templates. Actually, a major variety of all paperwork created in Acrobat are visible paperwork, issues like advertising and marketing content material, gross sales pitches, shows, infographics, and canopy pages. We’re making good progress in addressing this want by embedding Specific capabilities as a local expertise in Acrobat with the aim of boosting productiveness and making the journey from doc consumption to content material creation smoother than ever. The combination of Adobe Specific options in Acrobat permits customers to create richer PDFs with AI-generated cowl pages, embedded infographics, and customised photographs and empowers customers to create absolutely shaped animated movies and different wealthy digital output.
We see quite a few early indicators of person demand as specific utilization by means of Acrobat has grown 10x 12 months over 12 months. Different highlights for enterprise professionals and customers embody Acrobat AI Assistant assist for languages now consists of English, French, German, Italian, Portuguese, Spanish, and Japanese. Acrobat AI Assistant assist for authorized workflows with contract-specific options. New AI capabilities in Specific like clip maker for auto era of video highlights and textual content rewrite to assist produce simpler copy.
Expanded Acrobat integrations with Microsoft Edge, Google Chrome, Gmail, and Google Drive and powerful adoption of hyperlink sharing for richer collaborative experiences have led to roughly 50% year-over-year progress in Acrobat internet month-to-month energetic utilization. Expanded Specific integrations now embody Miro, Field, Slack, Webflow, and HubSpot. The Specific ecosystem additionally expanded to 225 plug-ins, greater than doubling within the final 12 months. Sturdy enterprise and pupil adoption, Specific onboarded almost 6,000 new companies in Q1, representing roughly 50% quarter-over-quarter progress.
College students with entry to specific premium grew 85% 12 months over 12 months. Key world buyer wins embody AT&T, Delta Airways, Disney, Ernst and Younger, IBM, JPMorgan Chase, Microsoft, Paramount, and Qatar Airways. Inventive professionals and the following era of creators who make their dwelling by designing and producing content material are targeted on standing out and bringing their distinctive artistic visions to life with pixel-perfect precision. As we mark the thirty fifth anniversary of Photoshop, Adobe Inventive functions stay the options of selection for the world’s artistic professionals throughout imaging, design, images, video, illustration, and 3D.
We additionally see growing demand from the following era of creators who’re searching for freemium internet and cellular functions as they start their artistic journeys. To raised serve these customers, we launched a brand new Photoshop cellular app and an expanded internet expertise, delivering Photoshop’s iconic picture modifying and design capabilities on the iPhone. The cellular app and all new internet expertise are additionally included in present Photoshop plans, providing established Photoshop clients a versatile ecosystem to create and edit throughout surfaces. The launch garnered over 30 million social engagements in simply two weeks.
The discharge of the Adobe FireFly video mannequin in February, a commercially secure generative AI video mannequin, has been very positively acquired by manufacturers and inventive professionals who’ve already began utilizing it to create production-ready content material. Customers can generate video clips from a textual content immediate or picture, use digital camera angles to manage pictures, create distinct scenes with 3D sketches, craft atmospheric parts, and develop customized movement design parts. We’re thrilled to see artistic professionals and enterprises and businesses, together with Dentsu, PepsiCo, and Stagwell discovering success with the video mannequin. Moreover, we not too long ago launched an all-new Firefly software, essentially the most complete vacation spot to generate photographs, vectors, and now movies with unmatched artistic management and direct integration with our industry-leading artistic apps to seamlessly transfer from ideation to manufacturing.
Along with producing photographs, movies, and designs from textual content, the app enables you to generate movies from keyframes, use 3D designs to exactly direct generations, and translate audio and video into a number of languages. We additionally launched two new plans as a part of this launch, Firefly Customary and Firefly Professional and started the rollout of our third plan, Firefly Premium yesterday. Consumer engagement has been robust with over 90% of paid customers producing movies. The launch of Photoshop on internet and cellular and the discharge of the brand new Firefly software expands our rising household of internet and cellular merchandise, which now consists of Photoshop for artistic imaging, Lightroom for images, Specific for Design, and Firefly for ideation and early manufacturing.
These apps function value-added capabilities to our current paid subscribers and as a frictionless freemium onboarding expertise to draw and monetize next-generation creators. We’re delighted with the early curiosity in these new choices. Different artistic skilled and creator highlights embody, continued robust adoption of GenAI in our merchandise with Photoshop GenAI month-to-month energetic customers at roughly 35% and Lightroom GenAI month-to-month energetic customers at 30%. Customers have generated over 20 billion belongings with Firefly.
The introduction of latest options in Premier Professional beta and After Results beta are serving to editors and movement designers keep forward of deadlines with AI options like Media Intelligence, which helps customers discover footage quicker utilizing pure language and caption translation for 17 languages, which effortlessly develop video to world audiences. We’re honored to see visionary filmmakers around the globe telling the season’s most acclaimed tales utilizing Adobe Inventive functions, together with Academy Award winners, Anora and Dune: Half Two. The launch of Adaptive profiles and distraction removing in Adobe Lightroom and Adobe Digicam uncooked, which lowered tedious and repetitive duties. Max Japan introduced our group collectively and served as a chance for us to launch quite a lot of new improvements, together with efficiency enhancements in Adobe Illustrator, which speed up options like pan and zoom and loading giant recordsdata as much as 10x quicker.
We had one other nice quarter within the enterprise with extra clients turning to Firefly Companies and customized fashions to scale on-brand content material manufacturing for advertising and marketing use instances, together with main manufacturers corresponding to Deloitte Digital, IBM, IPG Well being, Mattel, and Tapestry. Tapestry, for instance, has applied a brand new and extremely productive digital twin workflow utilizing customized fashions in Firefly. You may hear extra on how the mixture of creativity and advertising and marketing is powering personalization at scale and enterprises. Adobe is extremely nicely set as much as make the most of AI throughout creativity.
We’re quickly delivering tailor-made improvements to serve the total continuum of content material creation for enterprise professionals and customers, artistic professionals and creators, and advertising and marketing professionals. Our increasing breadth of choices is reaching a broader universe of shoppers, and our unbelievable go-to-market energy and confirmed data-driven working mannequin are propelling the expansion of each flagship and new choices. We will probably be unveiling extra thrilling product capabilities at Adobe Summit and MAXLondon in April. I am going to now move it to Anil.
Anil S. Chakravarthy — President, Digital Expertise
Thanks, David. Howdy, everybody. Expertise Cloud had a powerful Q1, reaching income of $1.41 billion for the quarter. Subscription income within the quarter was $1.3 billion, representing 11% year-over-year progress.
Our main options spanning content material, information, and buyer journeys allow enterprises around the globe to ship personalised experiences at scale, serving to clients drive each top-line progress and productiveness features. In Q1, we delivered typical seasonal bookings and superior our pipeline as enterprise clients initiated the execution of their crucial 2025 priorities. Adobe Expertise Platform and Apps play a pivotal function in enabling unified buyer experiences. With the addition of AEP AI Assistant, we prolonged the worth and influence of Expertise platform by empowering extra capabilities throughout the enterprise with conversational interfaces for information ingestion, perception era, viewers segmentation, and expertise supply.
We’re now constructing on these advances and increasing AEP to allow clever orchestration of buyer experiences with AI brokers natively inbuilt. We’re empowering clients to make higher use of their first-party information and to drive extra related advert experiences primarily based on direct buyer relationships. Our portfolio spans all the content material provide chain from creation and manufacturing, workflow and planning, asset administration, supply, and activation by means of to reporting and insights. Now we’re bringing collectively creativity and advertising and marketing with AI to assist our clients notice the total potential of personalization at scale.
To this point, advertising and marketing professionals have been constrained by the variety of content material variations they’ll create and the variety of journeys they’ll deploy. With Adobe GenStudio, manufacturers across the globe have been working with Adobe to convey artistic and advertising and marketing groups nearer collectively, simplify their creation to activation course of, and unlock new ranges of creativity, insights, and effectivity in advertising and marketing campaigns. Different highlights embody, robust demand for Adobe Expertise Platform and native functions with Q1 subscription income rising almost 50% 12 months on 12 months; of real-time CDP collaboration, delivering a safe surroundings for advertisers and publishers to collectively uncover, activate, and measure high-value audiences for extra related campaigns. Constructed on AEP, real-time CDP collaboration is purpose-built for manufacturers to attach and collaborate on first-party information.
Customers can now measure advert effectiveness straight with publishers, together with NBC Common and Warner Bros. Discovery. Advertisers and businesses, together with Alterra Mountain Firm, WaveMaker, Main League Baseball, and the Coca-Cola Firm piloted the answer to ship personalised and efficiency advertisements. Launch of the AEM Cloud Service accelerator with Publicis Sapient, which may scale back the labor value of migration as much as 35%.
Business analyst recognition in main analyst stories, together with the Gartner Magic Quadrant for Digital Expertise Platforms and Gartner Magic Quadrant for Personalization Engines. Sturdy demand for Firefly Companies and customized fashions as a part of the GenStudio resolution with over 1,400 customized fashions since launch. GenStudio for efficiency advertising and marketing wins at main manufacturers, together with AT&T, Lennar, Lenovo, Lumen, Nebraska Furnishings Mart, Pink Hat, Thai Airways, and Phoenix. Sturdy partnership momentum with GenStudio for Efficiency Advertising and marketing supporting advert creation and activation for Google, Meta, Microsoft Adverts, Snap and a number of other companions, together with Accenture, EY, IPG, Merkel, and PwC providing vertical extension apps.
Partnership with Dentsu to convey GenAI for playground to manufacturing for our joint clients with Adobe GenStudio Dentsu Plus. Key world buyer wins, together with Delta Airways, Ford, IBM, Microsoft, PNC Monetary Companies, and Tyson Meals. These buyer wins tackle the continuing evolution of the necessities of worldwide manufacturers for an built-in workflow spanning creativity and advertising and marketing. This success is pushed by product integration and innovation throughout Inventive Cloud and Expertise Cloud more and more delivered by means of Adobe GenStudio.
Our One Adobe enterprise go-to-market engine permits clients to ship personalised and on-brand content material at scale. The mixture of our built-in enterprise options throughout creativity and advertising and marketing is a novel energy for Adobe. Subsequent week, we’re excited to host Adobe Summit, our flagship Digital Expertise Convention in Las Vegas, the place we’ll be joined by hundreds of shoppers, companions, and builders from around the globe. We are going to share our imaginative and prescient for the way manufacturers can apply the ability of generative AI and agentic know-how to attain personalization at scale, and sit up for highlighting quite a lot of product improvements.
I am going to now move it to Dan.
Daniel J. Durn — Government Vice President, Chief Monetary Officer
Thanks, Anil. Adobe’s enterprise has grown over the past decade by delivering world-class merchandise grouped inside three clouds: Inventive Cloud, Doc Cloud, and Expertise Cloud. In parallel, we have continued to develop throughout cloud choices to higher serve totally different buyer teams. Examples embody Acrobat, which is mirrored in Inventive Cloud and Doc Cloud; GenStudio, which incorporates Inventive Cloud, Specific, Firefly Companies, and Expertise Cloud.
Enterprises who wish to have interaction with One Adobe in mixed artistic seats with advertising and marketing automation. And more and more, Acrobat, and Specific. We consider Adobe’s success will probably be pushed by innovation in service of each enterprise professionals and customers and inventive and advertising and marketing professionals. Reporting insights and the monetary efficiency throughout these buyer teams will present a transparent view of Adobe’s execution in opposition to our technique.
We are going to, due to this fact, present general Adobe income, digital media and digital expertise section income; digital expertise subscription income and digital media ending ARR in mixture quite than by cloud, in addition to subscription income for enterprise professionals and customers and inventive and advertising and marketing professionals. Subscription income supplied will primarily embody income from SaaS, managed providers, and time period choices. Enterprise professionals and customers group will encompass all subscription income from Doc Cloud, Acrobat subscription income in Inventive Cloud and Adobe Specific subscription income in Inventive Cloud, all of that are part of digital media. Inventive and advertising and marketing professionals group will encompass all subscription income from digital expertise, in addition to the entire remaining subscription income from Inventive Cloud in digital media.
In at this time’s name, I am going to cowl three primary areas: our Q1 FY ’25 outcomes specializing in key progress drivers, monetary targets, and our supplemental disclosures. Now turning to the quarter. Within the first quarter of FY ’25, Adobe achieved income of $5.71 billion, which represents 10% year-over-year progress or 11% in fixed foreign money. GAAP diluted earnings per share in Q1 was $4.14 and non-GAAP diluted earnings per share was $5.08.
Q1 enterprise and monetary highlights included, digital media income of $4.23 billion, digital media ending ARR of $17.63 billion, rising 12.6% 12 months over 12 months. Digital expertise income of $1.41 billion, money flows from operations of $2.48 billion. And exiting the quarter, remaining efficiency obligations had been $19.69 billion, rising 12% 12 months over 12 months, and CRPO rising 11%. In our digital media section, we achieved Q1 income of $4.23 billion, which represents 11% year-over-year progress or 12% in fixed foreign money.
We exited the quarter with $17.63 billion of digital media ARR, rising our ending ARR ebook of enterprise 12.6% 12 months over 12 months in fixed foreign money. First quarter digital media progress drivers included: robust progress for Acrobat throughout all routes to market and geographies; Acrobat internet and cellular progress pushed by freemium funnel and app retailer optimizations; progress in Adobe Specific, fueled by top-of-funnel enhancements, PLG journeys throughout Acrobat and Specific and B2B buyer onboarding. Energy in person adoption and engagement of Acrobat AI Assistant pushed by enlargement of options, together with assist for extra languages and contract intelligence capabilities. Progress of artistic flagship choices pushed by all apps, inventory, imaging and images.
Continued momentum in artistic internet and cellular choices with 35% 12 months over 12 months ending paid subscription progress, and powerful momentum within the enterprise, pushed by Firefly Companies and the continued profit from the upsell movement of generative AI-enabled choices. Turning to our digital expertise section. In Q1, we achieved income of $1.41 billion, which represents 10% year-over-year progress as reported and in fixed foreign money. Digital expertise subscription income was $1.30 billion, rising 11% 12 months over 12 months as reported and in fixed foreign money.
First quarter digital expertise progress drivers included: momentum for product choices throughout content material, information and journeys; AEP and app subscription income rising almost 50% 12 months on 12 months. GenStudio Options surpassing $1 billion in ending ARR ebook of enterprise, early momentum in GenStudio for Efficiency Advertising and marketing and adoption and pipeline and enhancements in general enterprise retention. Turning now to our buyer group efficiency. Inventive and advertising and marketing professionals group subscription income was $3.92 billion, which represents 10% year-over-year progress as reported.
Enterprise professionals and customers group subscription income was $1.53 billion, which represents 15% year-over-year progress as reported. Adobe’s efficient tax charge in Q1 was 17% on a GAAP foundation and 18.5% on a non-GAAP foundation. RPO exiting the quarter was $19.69 billion, rising 12% 12 months over 12 months or 13% in fixed foreign money, and CRPO rising 11% 12 months over 12 months or 12% in fixed foreign money. Our money flows from operations within the quarter had been a Q1 report $2.48 billion, and ending money and short-term funding place exiting Q1 was $7.44 billion.
In Q1, we entered into share repurchase agreements totaling $3.25 billion, and we at present have $14.4 billion remaining of our $25 billion authorization granted in March 2024. Let me now flip to our Q2 FY ’25 monetary targets. For Q2 FY ’25, we’re focusing on: whole Adobe income of $5.77 billion to $5.82 billion; digital media section income of $4.27 billion to $4.30 billion; digital expertise section income of $1.43 billion to $1.45 billion; digital expertise subscription income of $1.315 billion to $1.325 billion; GAAP earnings per share of $3.80 to $3.85; and non-GAAP earnings per share of $4.95 to $5. For Q2, we count on non-GAAP working margin of roughly 45% and a non-GAAP tax charge of roughly 18.5%.
The 12 months is off to a superb begin and assuming present macroeconomic situations, I am happy to reaffirm our full 12 months steering for fiscal 12 months 2025. This quarter’s robust efficiency displays Adobe’s long-standing concentrate on innovation and assembly the rising wants of our broad buyer base. As companies more and more prioritize digital transformation, we’re uniquely positioned to ship worth by means of our extremely differentiated options and confirmed go-to-market execution to unleash the ability of creativity. Trying forward, we’re excited concerning the alternatives to drive progress for our clients as we proceed to form the long run within the period of AI.
We sit up for seeing you subsequent week at our investor assembly at Summit 2025. Thanks, and we’ll now take questions. Operator?
Questions & Solutions:
Operator
Thanks. [Operator instructions] The primary query will come from Brent Thill with Jefferies.
Brent Thill — Analyst
Good afternoon. Shantanu, in case you took the AI ebook of enterprise, it will be low single-digit p.c of your whole income for the 12 months. I suppose many are asking, when does this develop into extra materials? How lengthy does it take? What’s required? Perhaps simply assist us stroll by means of the AI journey and the way that interprets to income.
Shantanu Narayen — Chairman and Chief Government Officer
Blissful to, Brent. When you take a step again and give it some thought, we have all the time talked concerning the AI journey as three components. The primary is guaranteeing that we innovate. The second is all about monitoring utilization and guaranteeing worth and monetization.
And I’d say we’re actually happy throughout all three of these journeys as we have had conversations with you people as nicely previously. A big quantity of the AI monetization can also be occurring by way of attracting folks to our subscription, ensuring they’re retained and having them drive higher-value worth SKUs. So, when any individual buys Inventive Cloud or when any individual buys Doc Cloud, in impact, they’re truly monetizing AI. However along with that, Brent, what we needed to do was provide you with a taste for the brand new stand-alone merchandise that we have now after we’ve talked about introducing Acrobat AI Assistant and rolling that out in several languages, Firefly, and ensuring that we have now a brand new subscription mannequin related to that on the internet, Firefly Companies for the enterprise and GenStudio.
So, the $125 million ebook of enterprise that we talked about exiting Q1 solely pertains to that new ebook of enterprise. And that is, once more, stuff that we stated we might double. However I feel by way of the influence additionally on the general enterprise, that has had a cloth half. However in case you play this out just a little bit extra and also you discuss what traders can count on, I feel with the brand new Firefly app that is come out, this can be a internet product with a brand new subscription, skill to have the video mannequin, skill to have ideation as a part of it.
Consider it as then integrating Photoshop internet, Specific internet, and the entire different merchandise, all of that can also be upside. And you may see much more innovation in that space and you will see much more monetization in that space. And once more, the very last thing I am going to in all probability say, Brent, is that the entire concept was to begin to tee it up, after which once more on the FA assembly, to proceed to develop on how that’s. However net-net, I’d say, whether or not it is innovation, having our personal fashions, integrating it throughout all of our merchandise, model new income streams like GenStudio within the enterprise after which utilization and monetization, I really feel actually good about it.
Brent Thill — Analyst
Nice. Thanks, Shantanu.
Operator
And the following query will come from Brent Bracelin with Piper Sandler.
Brent Bracelin — Analyst
Hello, thanks for taking the query. Good afternoon. I needed to double-click into the demand linearity you noticed within the quarter. I recognize the commentary reaffirming 11% digital media ARR progress information for the total 12 months.
However may you present extra shade on tendencies you noticed within the quarter throughout Inventive and Doc Cloud right here? Thanks.
David Wadhwani — President, Digital Media
Yeah, blissful to try this. So, once more, simply digital media ARR was a 12.6% progress, which is in step with our expectation and likewise the combo was in step with our expectations. When you take a step again and also you take a look at the demand and type of the best way the enterprise performed out this quarter, it is in line with what we have seen traditionally, and we have seen type of a broad-based demand for the merchandise with a couple of highlights that I feel are price calling out. Initially, because it involves enterprise professionals and customers, that is clearly an enormous market with billions of customers that we’re going after.
And our technique right here is to actually ensure that productiveness that we ship an answer for productiveness from consumption all the best way to creation and that is actually what we’re doing with Acrobat and Specific. We noticed lots of momentum in these companies. We talked about how Acrobat is up 23% 12 months over 12 months by way of month-to-month energetic customers. We’re seeing stronger conversion on these customers, and that is been serving to drive the enterprise.
AI Assistant, clearly, we launched that final 12 months, continues to do very nicely and it is actually serving to with that technique of quicker consumption and conversational experiences. We noticed 2x quarter-over-quarter utilization progress in AI Assistant. And naturally, in that context, Specific has been an amazing product. The product proper now could be simply — it is a tremendous product to make use of.
And so, that additionally, we have been investing in very considerably. From a advertising and marketing standpoint but in addition from a partnership standpoint, we have doubled the associate ecosystem within the final 12 months. It now consists of new names like Miro and Field and Webflow and HubSpot. We now have 85% extra entry — 85% year-over-year progress in college students with entry to it.
We have been ramping up our pupil and campus ambassador packages. We added 6,000 new small, medium companies to the Specific product as nicely. And even inside Acrobat, the place we have been doing extra — we’re seeing rather more demand. We noticed a 10x year-over-year engagement of Specific capabilities from Acrobat customers.
So, feeling actually good about that viewers group. On the Inventive professional and creator aspect, Shantanu talked about this already, however the introduction of the Firefly video mannequin being utilized by PNC and Pepsi and Dentsu and PepsiCo and Stagwell, Firefly new choices from Customary to Professional. And simply yesterday, we launched Premium, which is a a lot bigger set of generative credit and all of these symbolize new monetization fashions. We launched Photoshop cellular and internet.
We noticed tons of of articles, 30 million social engagements. We had been simply listed because the targeted app on the App Retailer over the weekend. We noticed some nice new advances for AI coming into Lightroom internet and cellular. Premier additionally noticed some nice advances by way of AI.
So, a lot of momentum in that enterprise. And what’s actually thrilling is that as we have accomplished all of this innovation, as Shantanu was speaking about, we even have three large milestones arising with Summit subsequent week then NAB shortly after that, then MAXLondon shortly after that. And that is beginning to present up. Clearly, we have talked about era as we crossed 20 billion generations.
We’re doing greater than 1 billion generations now a month and 90% of individuals utilizing Firefly the app additionally noticed — are producing video, in addition to a part of that. However we additionally noticed a powerful progress within the enterprise. I do not know, Anil, if you wish to add one thing.
Anil S. Chakravarthy — President, Digital Expertise
Yeah, precisely. To only echo what you had been saying, I feel within the enterprise, we see lots of demand for creativity and advertising and marketing and AI coming collectively. Each CMO that we speak to, each company that we work with, they’re all very all for how generative AI can be utilized to rework how the content material provide chain works. And with the GenStudio providing, which mixes the creativity and the advertising and marketing and the AI, we have seen great traction and we noticed quite a lot of each buyer wins, in addition to quite a lot of company companions, and we sit up for unveiling much more of this at Summit.
David Wadhwani — President, Digital Media
So, off to an amazing begin, I feel, with innovation, new choices and you may count on to see new choices and friends within the months forward.
Brent Bracelin — Analyst
Useful. Sit up for speaking to you subsequent week. Thanks.
Operator
And the following query will come from Keith Weiss with Morgan Stanley.
Keith Weiss — Analyst
Glorious. Thanks guys for taking the query And thanks for the extra disclosure. I feel it is a actually attention-grabbing view sort of breaking down the artistic and advertising and marketing professionals versus the enterprise professionals and shopper group. And sort of following on that final query, right me if I am unsuitable, however it feels sort of bullish to me that the enterprise professionals and shopper group has a stronger progress charge, artistic at 15% artistic, and advertising and marketing professionals just a little bit behind as a result of it looks like enterprise professionals and shopper group, these merchandise can be quicker gross sales cycle, significantly on the patron aspect of the equation, quicker adoption.
The artistic and advertising and marketing professionals, this broader resolution that you simply’re attempting to promote would have an extended gross sales cycle. So, the query is, am I fascinated by that proper? And are you seeing any indications that, that artistic and advertising and marketing skilled group, whether or not it is in your pipeline or type of the exercise you are seeing, may that meet up with what we’re seeing from the enterprise professionals and shopper group?
Shantanu Narayen — Chairman and Chief Government Officer
Nicely, Keith, I imply, a part of our aim was actually to begin to present perception into by the shopper teams, how we’re beginning to see it. And to some extent, when persons are questioning how we are literally driving artistic, and the truth is that when you concentrate on the GenStudio set of merchandise, which we now stated is a $1 billion ebook of enterprise, AEP and Apps can also be a $1 billion ebook of enterprise and the artistic skilled, that is truly addressing all the content material provide chain. And so, by way of that progress charge, as we add new subscriptions just like the Firefly app subscription, add extra video, add extra performance in what we’re doing with GenStudio, that progress charge as nicely, it is a very giant untapped alternative and other people have been asking us questions concerning the energy of the artistic market, in addition to the energy of that market inside the enterprise. And we expect that is a big TAM, we’ll share extra.
So, I feel you are considering of it proper, which is to say the $5 billion ebook of enterprise that we constructed for digital advertising and marketing, that is actually serving to the content material and the artistic economic system. And so, that was the concept behind providing you with a window into that. And the metrics related to which might be subscription and totally different sorts of choices. On the opposite aspect of the equation as nicely, to your level, what we needed to do is replicate the truth that the investments that we made in each Acrobat and Specific persevering with to make sure distribution after we take into consideration the month-to-month common customers.
When you take it in mixture, I imply, Adobe has tons of of thousands and thousands of people who find themselves utilizing month-to-month — are utilizing our merchandise. And that will probably be actually the early metrics and the symptoms of how Specific and Acrobat proceed to develop. So, I am glad that you simply discovered the extra disclosure helpful. And that was the concept.
And to Brent’s earlier query as nicely, I simply needed to make clear. I imply, we aren’t taking the entire income that we see in digital media and digital expertise and calling that AI income. However relative to what I’ve seen from another firm in our specific house, we have truly been happy by how a lot of it, whether or not it is further tiers of AI within the digital expertise, so what we’re seeing throughout Acrobat, in addition to the artistic skilled house, there’s been good adoption of AI in that. And so, that was the opposite intent, to begin to present that in order that we are able to discuss it extra on the FA assembly.
Keith Weiss — Analyst
Excellent. Can I sneak one final one in for Mr. Durn? It is nice to see you guys make the most of the pullback within the inventory worth by accelerating the share repurchase which picked up this quarter. Might this tempo of share repurchases, are you able to guys maintain this all year long, or is that extra of a one-time pickup?
Daniel J. Durn — Government Vice President, Chief Monetary Officer
Yeah. So, if I take a step again, Keith, and you concentrate on the final 4 quarters, we have repurchased nearly $11 billion. And we have all the time talked about if there’s alternatives to be opportunistic alongside the best way, we might make the most of it. And I feel that is what you noticed play out in Q1.
We have a powerful perspective concerning the monetary profile all through the course of the 12 months. Blissful to reaffirm steering, however we will drive that with robust working margins, robust money move supply, and be robust capital allocators all year long. So, we be ok with the place we sit. And if there’s alternatives to be opportunistic, we are going to.
Shantanu Narayen — Chairman and Chief Government Officer
Keith, it is undoubtedly a vote of confidence that we really feel in what we’re seeing because the alternatives forward of us.
Keith Weiss — Analyst
Yeah. It is nice to see you guys placing your cash the place your mouth is by accelerating that share repurchase. It undoubtedly helps.
Operator
And the following query will come from Kash Rangan with Goldman Sachs.
Kash Rangan — Analyst
Hello. Thanks very a lot. A lot recognize the disclosure and the colour and all the things that goes with it. Shantanu, query for you.
Whenever you pivoted the corporate to a brand new enterprise mannequin by means of cloud, initially, there was lots of skepticism. Then you definately proved to us that the TAM was truly bigger within the new artistic meets the cloud cycle. And the corporate was in a position to speed up by means of the transition and put up even higher margins and by increasing the TAM essentially. So, as you take a look at AI proper now, proper now, one bearish argument that one may make, which I do not subscribe to, is that you simply’re taking part in protection and that AI is a price of staying in enterprise and maintaining your self related to your artistic base.
However how do you look, since you have been by means of this one large shift earlier than, you have bought lots of expertise, the place is your conviction on how actually incremental AI will be on your progress? Might you be at the same juncture the place you are poised to get into the following cycle is definitely larger TAM, to not put phrases in your mouth, however even possibly dare I say the potential to speed up off of the nice progress that we have seen to this point? Thanks a lot.
Shantanu Narayen — Chairman and Chief Government Officer
Nicely, Kash, what I recognize concerning the query is, that is what we needed to actually tee up in entrance of the FA assembly. However undoubtedly, as David described, the chance for the enterprise skilled and customers, I feel you may begin to see and we’ll share extra on the FA assembly that there are billions of people who we are able to convey into the fold for creativity and productiveness and speak extra about how we’re, with the distribution that we have now and with the month-to-month common customers that we have now, monetize that very similar to we have monetized Acrobat. And we undoubtedly consider that it is a large, large alternative. I feel it is the identical factor throughout creators.
There are extra creators which might be coming into. And once more, I am going to preview just a little little bit of what David will share, which is when you concentrate on the net and cellular choices that we’re offering to draw extra folks to our platform as artistic professionals and next-generation creators, the quantity of people that wish to enter that occupation is considerably bigger than it is ever been. And so, with merchandise like Photoshop on internet and cellular, in addition to Firefly app, that is clearly the intent to point out how that as a subscription service and attracting the following era creators will probably be a tailwind. After which once you put this collectively within the enterprise, I imply, hopefully, what you additionally see as a part of the extra disclosures is that the enterprise has continued to be a cloth a part of our enterprise and materials a part of our progress as a result of they’re, so as to do personalization at scale, as Anil is speaking about, there’s going to be extra content material that is produced.
There’s going to be extra content material that is truly inserted into advert techniques and social media. And so, once more, I feel setting the stage for the way that is a bigger alternative. However in case you take a look at it from not simply the size of we had been advertising and marketing however take a look at the lens of, hey, that is a content material enterprise for us within the enterprise. We are going to once more define how that’s solely going to be a rising alternative.
So, no query in my thoughts, all three of those are literally going to speed up by way of the TAM after which we have now to innovate and execute in opposition to that. So, I’m extra excited concerning the bigger alternative undoubtedly on account of AI. And we have talked about this, Kash. When you do not make the most of AI, it is a disruption.
In our specific case, the intent is clearly to point out the way it’s a tailwind.
Kash Rangan — Analyst
Glorious. And one follow-up and really fast, promise if I can. With the turbulence within the markets with commerce wars, and so forth., tariffs, and so forth., how do you are feeling your buyer base goes to behave? Is all the things going to be on monitor from what you’ll be able to inform by speaking to your clients? Or are they sort of perplexed by what is going on on and pausing? Thanks a lot and that is it for me.
Shantanu Narayen — Chairman and Chief Government Officer
Nicely, I imply, I feel we simply type of stated, assuming present macroeconomic situations, I imply, we have now a various enterprise. We’re off to a superb begin within the conversations that we’re having. And all of us have conversations with all of our different friends. And I feel we have now a seasoned administration staff that can navigate it.
However clients, I feel we’re all collectively attempting to grasp what occurs within the economic system. However the tariffs, and so forth., do not actually influence Adobe the best way they influence different companies. And so, we’re optimistic.
Kash Rangan — Analyst
Thanks a lot.
Shantanu Narayen — Chairman and Chief Government Officer
Thanks.
Operator
And the following query will come from Mark Moerdler with Bernstein Analysis.
Mark Moerdler — Analyst
Thanks very a lot. Dan, are you able to give us extra shade on why you are altering the categorization of income, eradicating the historic Doc Cloud and Inventive Cloud? Is that this pushed by the One Adobe gross sales movement? Is Specific now offered predominantly with Doc Cloud? How ought to we take into consideration the drivers? Thanks.
Daniel J. Durn — Government Vice President, Chief Monetary Officer
Yeah, so thanks for the query, Mark. As we laid it out, we talked about more and more driving cross-cloud choices. We’re already doing it at this time. We’ll be doing extra of it going ahead.
And as you take a look at people more and more shopping for choices, as you take a look at enterprises more and more shopping for options and bringing totally different components of our portfolio collectively to satisfy their highest worth wants round these two groupings of the shoppers, it actually is supposed to only draw a spotlight to our technique and the way we’re executing in opposition to that technique. On a go-forward foundation, our success goes to be pushed by the best way we innovate into the intersection of productiveness and creativity, into the intersection of creativity and advertising and marketing. And people intersections are highlighted by these two groupings of shoppers. And so, the intent round that is to actually convey to life how we’re driving our technique, how we’re executing in opposition to it offers the perfect perception in how the corporate is acting on a go-forward foundation.
Shantanu Narayen — Chairman and Chief Government Officer
And Mark, at the very least two particular issues that we have heard as suggestions from all of you people are, you perceive that there is an Acrobat inside the Inventive Cloud and Doc Cloud. This pulls out the enterprise so as to present the momentum and the chance in that enterprise. And to your query about One Adobe, sure, I imply, the GenStudio resolution is, undoubtedly, taking seats of merchandise like Photoshop or the Inventive Cloud, is including Specific in it for each marketer in there. We now have Firefly Companies and customized fashions.
And so, the extra we promote that as one enterprise providing and we wish to speed up the sale of that as a strategic partnership, that is now additionally all mirrored in a kind of income slices. So, we consider that the extra disclosure will even provide you with extra visibility into routes to market.
Mark Moerdler — Analyst
That makes lots of sense. And one fast different one. Ought to we count on the disclosure on the AI ARR one thing that we’ll be getting quarterly or periodically up to date? Thanks.
Shantanu Narayen — Chairman and Chief Government Officer
Periodically.
Operator
And the following query will come from Alex Zukin with Wolfe Analysis.
Alex Zukin — Analyst
Hey, thanks guys for taking the query. And I’ll be part of the refrain of these commenting positively on among the new numbers, significantly the AI ebook of enterprise. And that is the place I needed to ask the query. Principally, look, you are going to give us a quantity, we will ask for extra.
So, in that spirit, in case you take a look at the $125 million and you concentrate on the segmentation between Assistant, Firefly, GenStudio, is there any triangulation round possibly how a lot — what the odds of for the breakout of these and possibly stack rank the expansion charges which might be going to get you to double that by the top of the 12 months? After which sort of equally, if you concentrate on if that $125 million is impacting or the place the tailwinds are extra towards the artistic and advertising and marketing skilled or the enterprise professionals?
David Wadhwani — President, Digital Media
Yeah. Nice query, Alex. So, to begin with, in case you take a look at the combo of these items, AI Assistant has been round for about three quarters or 4 quarters now. Firefly Service has been round for about 4 quarters as nicely.
GenStudio was launched late in This fall of final 12 months. So, that provides you just a little little bit of a way that the composition goes to type of like be primarily based on the tenure of those merchandise available in the market. But when we take a step again and also you take a look at the expansion trajectory, once more, we’re speaking $195 million — sorry, $125 million doubling within the subsequent 9 months. It offers you a way of the size of those companies and actually the momentum that is within the enterprise.
And once you take a look at it, the core innovation that Shantanu talked about led to lots of utilization. And now we’re beginning to get to a degree the place we are able to monetize it. For Firefly, we have now imaging, vector, design, video, voice, video, and voice popping out simply a few weeks in the past, off to a superb begin. I do know there have been some questions on how essential is commercially security of the fashions.
They’re crucial. A variety of enterprises are turning to them for the standard, the breadth but in addition the business security, the artistic management that we give them round having the ability to actually match construction, model, set keyframes for exact video era, 3D to picture, picture to video. The inclusion additionally, on a street map, and we’ll share extra about this subsequent week of third-party fashions actually establishes us because the one-stop store for something you could do with creativity. After which once you ladder that right into a Firefly stand-alone supply with a number of tiers with Customary, Premium, and Professional, once you take a look at that built-in into Inventive Cloud, you would think about additional tiering there.
Whenever you take a look at the work that we’re doing at the side of Anil’s staff round GenStudio and ensuring all of those fashions and this whole platform, together with third-party fashions are uncovered inside our GenStudio supply, what it is actually doing is it is evolving away from the dialog being concerning the mannequin to the dialog being concerning the workflows and the mixing and the appliance tier and the agent-based issues that we’ll be speaking to you extra about. And that basically performs to our differentiation, our energy, and our audiences that we serve. And that is why you see the bullishness of that $125 million doubling within the subsequent 9 months.
Shantanu Narayen — Chairman and Chief Government Officer
Yeah. I am glad that you simply discover the type of data helpful. I am going to provide you with just a little bit extra shade as nicely on that. Keep in mind, with Acrobat, we have now AI Assistant that is separate, so that is solely the separate Acrobat AI Assistant.
So, the vast majority of that income is definitely Inventive as a result of as we are able to proceed to place the AI Assistant as a part of an Acrobat SKU. We’d not rely that if that got here as a part of an Acrobat Premium SKU. So, color-wise to this point, artistic truly represents the vast majority of that. However as , the Acrobat enterprise is doing nice.
Alex Zukin — Analyst
That is very, very useful. I suppose possibly simply to observe alongside there. You’ve got seen — or we have seen lots of consolidation begin to occur inside the AI realm the place the mannequin firms or the agent even rising the agentic firms. Perhaps simply remind us on the way you’re fascinated by your strategy towards natural versus inorganic innovation right here, given simply the plethora of performance that you simply’re releasing throughout the board.
Shantanu Narayen — Chairman and Chief Government Officer
Because it pertains to the core artistic fashions, we may have our commercially secure, as David stated, Alex, and so inside Firefly as an software and inside every of our product integrations and Photoshop, and so forth., count on Firefly. We have additionally signaled and we have proven how we might assist third-party fashions related to that. And so, whether or not it is a customized mannequin that we create for one in all our enterprise clients, I feel in case you take a look at it, there have been a few articles this week about how whether or not it is Estee Lauder, who’s going to be constructing their fashions constructed on ours and leveraging it or an organization like Publicis that is going to be taking these fashions. So, our core imaging video franchise, we’ll have our fashions because it pertains to textual content, we have now assist for different third-party fashions.
And so, I feel it is a very sensible and it is the suitable one, and we’ll assist the entire artistic third-party fashions that individuals wish to assist, whether or not it is a customized mannequin we create for them or whether or not it is another third-party mannequin inside Firefly as an app and inside Photoshop, you are going to see assist for that as nicely. And so, consider it as we’re the best way during which these fashions truly ship worth to a person. And so, it is truly identical to we did with Photoshop plug-ins previously, you are going to see these fashions supported inside our flagship functions. Hopefully, that provides you a way.
Operator
And the following query will come from Mark Murphy with J.P. Morgan.
Mark Murphy — Analyst
Thanks very a lot. I used to be questioning in case you can simply touch upon what you are sensing basically by way of promoting exercise and shopper spending tendencies within the wake of some very uneven outcomes from a number of airways the final a number of days and a number of retailers. What’s providing you with the resilience to reaffirm the FY ’25 steering when a few of these are actually large sectors of the economic system they usually appear to be encountering some turbulence? I am simply questioning if there — you principally see them persevering with to create and market and promote regardless of this surroundings.
Shantanu Narayen — Chairman and Chief Government Officer
I feel on the finish of the day, Mark, we simply consider that digital goes to proceed to be a basic a part of the economic system and the significance goes to proceed. I imply, there is not a single firm that I’ve talked to that does not say digital. To your level, as different firms view macroeconomic situations that could be specific to them, onuses on each firm that is serving them with know-how to display how the know-how helps, whether or not it is the highest line or the effectivity. However whether or not it is top-line progress or effectivity or each, they are not going to exit of fashion because it pertains to any enterprise saying, how can I exploit know-how to perform my aims?
Mark Murphy — Analyst
OK. I recognize that, Shantanu. As a really fast follow-up on Alex’s query, with the ARR, the $125 million ARR doubling within the subsequent 9 months, do you assume it may be the identical composition, or is one thing going to be coming in from the video fashions which may change the combo there within the subsequent 9 months?
Shantanu Narayen — Chairman and Chief Government Officer
The video mannequin is a part of the artistic Firefly app that will probably be a part of this. I feel lots of these nice questions, Mark, I imply, on the FA assembly, we’ll try to give extra shade, in addition to to what we’re seeing. However we needed to at the very least begin to define what merchandise had been in there, the expansion charges that we count on, and the way we’re executing on, as I stated, the innovation, utilization, understanding, and providing these as monetization. So, we’ll additionally, I do know, preserve a monitor of the continuing questions and tackle them on the FA assembly as nicely, Mark.
Mark Murphy — Analyst
OK, nice.
Operator
And our final query will come from Saket Kalia with Barclays.
Saket Kalia — Analyst
Hey, guys, thanks for taking my query right here and squeezing me in. I am going to preserve it to at least one. David, possibly for you. It is nice to see the Firefly app tiers that clients can add to their current subscriptions.
And possibly to Shantanu’s level, this can be a higher matter for FA Day, however I am questioning if we may simply discuss, how do you envision type of the potential connect charge there? I imply, Firefly is clearly an unprecedented providing so possibly that is actually powerful to reply. However are there any merchandise that possibly Adobe has seen previously like Adobe Inventory or any others that you simply take a look at as type of a framework for what that adoption curve may seem like?
David Wadhwani — President, Digital Media
Yeah. I feel, so if we have a look — in case you take a step again, the rationale we’re so excited concerning the Firefly app is absolutely twofold. One is precisely the place you are going, Saket, and what you are asking about, which is the — with each dialog we have had with artistic professionals, we all know that wherever they’re, they’re underneath an infinite quantity of stress to supply extra. And this cohort of artistic professionals, we see very robust connect and adoption of the generative AI options we put within the product partially as a result of they’re nicely built-in and really discoverable and since they simply work and other people get lots of worth out of that.
So, what you will notice is you may begin to see us integrating these new capabilities, these premium capabilities which might be within the Firefly Customary, Professional, and Premium plans extra deeply into the artistic workflow so extra folks have the chance to find them. And naturally, as a part of that, I feel you’ll be able to count on to see what we have accomplished all alongside is take a look at the place the utilization is, take a look at the place the thrill is, and ensure we get the pricing and the tiering proper in a method that maximizes the chance for our clients and maximizes the chance and the worth that Adobe and our shareholders get as a part of that, too. So, that will probably be a giant space and a giant alternative, and we see lots of potential there as we glance forward. The opposite half that I wish to be certain does not get misplaced in that is how related this Firefly expertise is for noncreative professionals as nicely, this subsequent era of creators that we preserve speaking about.
And if we take a look at the early adoption charges of the Firefly paid plan, it actually tells us each of those tales. We now have a excessive diploma of conviction that it is including worth and being utilized by artistic professionals, however it’s additionally proving to be a superb onboarding alternative for next-generation execs and creators usually. And that is the place Shantanu talked about earlier, there may be an growing alternative to merge our internet and cellular choices round not simply the generative capabilities however what you do with the content material you generate with Photoshop internet and cellular, Specific internet and cellular. And you’ll think about different capabilities coming round video as nicely.
So, we’re enthusiastic about Firefly Companies and the monetization capabilities there in each instructions, new customers and likewise worth and ARPU for our current base.
Shantanu Narayen — Chairman and Chief Government Officer
And Saket, since that was the final query, thanks. And possibly simply in a fast abstract, I imply, the 4 issues that I would depart you all with is Q1 was a powerful begin. We had been happy with our efficiency. When you concentrate on the addressable markets that we have now, as we take into consideration how we serve the enterprise skilled and the patron and the artistic skilled and the advertising and marketing skilled, we consider that, that is an immense alternative that is solely going to develop on account of AI.
We’re happy with how AI is now infused throughout all of our merchandise and the way we’re additional tailoring the breadth of our merchandise to serve these buyer teams in a method during which we delight them. And we’re beginning to define how the monetization will probably be totally different for every one in all these and relevant for the shopper group that we’re serving. We actually proceed to consider that this can drive progress and profitability for us as an organization in ’25 and past. And so, we sit up for becoming a member of you all on the FA assembly, and thanks for becoming a member of us at this time.
Operator
[Operator signoff]
Length: 0 minutes
Name members:
Steve Day — Chief Monetary Officer and Senior Vice President, Digital Expertise
Shantanu Narayen — Chairman and Chief Government Officer
David Wadhwani — President, Digital Media
Anil S. Chakravarthy — President, Digital Expertise
Daniel J. Durn — Government Vice President, Chief Monetary Officer
Brent Thill — Analyst
Brent Bracelin — Analyst
Anil Chakravarthy — President, Digital Expertise
Keith Weiss — Analyst
Dan Durn — Government Vice President, Chief Monetary Officer
Kash Rangan — Analyst
Mark Moerdler — Analyst
Alex Zukin — Analyst
Mark Murphy — Analyst
Saket Kalia — Analyst
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