ADBE earnings name for the interval ending December 31, 2024.
Picture supply: The Motley Idiot.
Adobe (ADBE 1.14%)
Q1 2025 Earnings Name
Mar 12, 2025, 5:00 p.m. ET
Contents:
- Ready Remarks
- Questions and Solutions
- Name Members
Ready Remarks:
Operator
Good day, and welcome to the Q1 FY ’25 Adobe earnings convention name. At present’s convention is being recorded. At the moment, I would 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 the moment 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 focus on Adobe’s first quarter fiscal 12 months 2025 monetary outcomes. You’ll find our press launch, in addition to PDFs of our ready remarks and monetary outcomes on Adobe’s investor relations web site.
The knowledge mentioned on this name, together with our monetary targets and product plans, is as of at the moment, March twelfth, and accommodates 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 the moment’s earnings launch and Adobe’s SEC filings. On this name, we are going to focus on GAAP and non-GAAP monetary measures.
Our reported outcomes embody GAAP progress charges, in addition to fixed forex charges. Throughout this presentation, Adobe’s executives will confer with fixed forex 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 continued important 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 newest improvements throughout our portfolio.
As well as, we are going to host our annual investor assembly on March 18th, and we wished 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 alter the world by way of personalised digital experiences is extra important than ever as digital continues to quickly remodel work life, training, and leisure.
AI represents a generational alternative to reimagine our expertise platforms to serve an more and more giant and numerous buyer universe. With creativity on the core, now we have 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 carry their concepts to life throughout any media kind.
The following era of creators desires the flexibleness of net and cellular instruments along with the facility of the desktop. They are going to profit from the number of AI fashions to ideate and discover artistic prospects. Adobe will serve this rising neighborhood with probably the most complete set of net, cellular, and desktop purposes delivered by way of varied subscription tiers. Along with Inventive Cloud, we are going to provide new Firefly net app subscriptions that combine and are an on-ramp for our net and cellular merchandise.
Whereas Adobe’s commercially protected Firefly fashions will likely be integral to this providing, we are going to help further third-party fashions to be a part of this artistic course of. The Firefly app would be the umbrella vacation spot for brand spanking 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 purposes, e-mail, social media, and promoting platforms. They’re on the lookout for agility and self-service, in addition to built-in workflows with their artistic groups and businesses. To attain this, enterprises require customized, commercially protected fashions and brokers tailor-made to deal with the inefficiencies of the content material provide chain. With Adobe GenStudio and Firefly Providers, Adobe is remodeling how manufacturers and their company companions collaborate on advertising and marketing campaigns, unlocking new ranges of creativity, personalization, and effectivity.
The mix of the Adobe Expertise platform and apps and Adobe GenStudio is probably the most complete advertising and marketing platform to ship on this imaginative and prescient. Along with our direct gross sales drive, 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 have now accelerated One Adobe offers by more and more integrating our artistic and advertising and marketing merchandise right into a single enterprise answer. We’ll proceed to put money into gross sales capability to ship Adobewide choices throughout enterprise, training, and authorities.
Enterprise professionals and customers need ease of use throughout net and cellular by way of a freemium mannequin. They’re on the lookout for fast and simple AI-first category-defining artistic purposes to assist them stand out. Whereas the necessity for artistic expression continues to develop exponentially, the true worth is in integrating creativity and productiveness in an all-in-one answer. The mix 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 likely be pushed by distribution throughout net and cellular app shops, partnerships with main software program suppliers, and deal with 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 prospects profit from these new capabilities. This energy can be mirrored in our AI-first stand-alone and add-on merchandise akin to Acrobat AI Assistant, Firefly App and Providers, and GenStudio for Efficiency Advertising and marketing, which have already contributed better than $125 million ebook of enterprise exiting Q1 fiscal ’25.
And we anticipate this AI ebook of enterprise to double by the tip of fiscal ’25. In abstract, by leveraging the breadth of our merchandise and expertise 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 subsequent decade. We’ll win by specializing in enterprise professionals and customers and artistic and advertising and marketing professionals with a unified product technique and go-to-market. We’ll begin to present monetary visibility in these 2 new teams beginning this quarter and broaden on this at our Investor Day at Summit subsequent week.
I will now flip it over to David to debate the momentum in our digital media enterprise.
David Wadhwani — President, Digital Media
Thanks, Shantanu. Good day, 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 Providers, an growing variety of One Adobe offers and a rising base of net 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 characterize a very good begin to the fiscal 12 months. Creativity goes mainstream, and I need to present extra coloration on the audiences we serve. We reside in a visual-first world the place artistic expression has develop into pervasive in each side of life. Enterprise professionals and customers alike intention to supply visually wealthy, partaking content material, whether or not it is a presentation, birthday invitation or social put up.
On the similar time, artistic professionals, creators, and entrepreneurs are competing on the standard of their on-line presence and the personalised experiences they ship to prospects. They flip to Doc Cloud, Inventive Cloud, and Expertise Cloud to attain their content material objectives. Going ahead, because of AI developments, we see unbelievable alternative to serve prospects 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 net and cellular artistic purposes, Firefly and GenStudio.
PDF continues to be the worldwide normal for digital paperwork for enterprise professionals, and Adobe Acrobat is revolutionizing the best way folks have interaction with them throughout cellular, net, and desktop. Options like AI Assistant in Acrobat and Reader have been a game-hanger for everybody from gross sales groups to college students on the lookout for quicker insights and smarter doc enhancing. 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 college venture or a social media put up, enterprise professionals and customers are on the lookout for an easy-to-use answer that helps them create visually compelling content material that stands out from the gang of generic templates. In reality, a major variety of all paperwork created in Acrobat are visible paperwork, issues like advertising and marketing content material, gross sales pitches, displays, 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 purpose of boosting productiveness and making the journey from doc consumption to content material creation smoother than ever. The mixing of Adobe Specific options in Acrobat permits customers to create richer PDFs with AI-generated cowl pages, embedded infographics, and customised photos and empowers customers to create totally fashioned animated movies and different wealthy digital output.
We see quite a few early indicators of consumer demand as specific utilization by way of Acrobat has grown 10x 12 months over 12 months. Different highlights for enterprise professionals and customers embody Acrobat AI Assistant help for languages now consists of English, French, German, Italian, Portuguese, Spanish, and Japanese. Acrobat AI Assistant help 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 robust adoption of hyperlink sharing for richer collaborative experiences have led to roughly 50% year-over-year progress in Acrobat net 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. Robust 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 precise premium grew 85% 12 months over 12 months. Key international buyer wins embody AT&T, Delta Airways, Disney, Ernst and Younger, IBM, JPMorgan Chase, Microsoft, Paramount, and Qatar Airways. Inventive professionals and the subsequent era of creators who make their dwelling by designing and producing content material are centered 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 purposes stay the options of alternative for the world’s artistic professionals throughout imaging, design, pictures, video, illustration, and 3D.
We additionally see growing demand from the subsequent era of creators who’re on the lookout for freemium net and cellular purposes as they start their artistic journeys. To raised serve these customers, we launched a brand new Photoshop cellular app and an expanded net expertise, delivering Photoshop’s iconic picture enhancing and design capabilities on the iPhone. The cellular app and all new net expertise are additionally included in present Photoshop plans, providing established Photoshop prospects 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 protected generative AI video mannequin, has been very positively acquired by manufacturers and artistic 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 digicam angles to regulate 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 utility, probably the most complete vacation spot to generate photos, 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 photos, movies, and designs from textual content, the app permits 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 commenced 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 net and cellular and the discharge of the brand new Firefly utility expands our rising household of net and cellular merchandise, which now consists of Photoshop for artistic imaging, Lightroom for pictures, Specific for Design, and Firefly for ideation and early manufacturing.
These apps function value-added capabilities to our present 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 property 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 broaden video to international audiences. We’re honored to see visionary filmmakers world wide telling the season’s most acclaimed tales utilizing Adobe Inventive purposes, together with Academy Award winners, Anora and Dune: Half Two. The launch of Adaptive profiles and distraction elimination in Adobe Lightroom and Adobe Digicam uncooked, which diminished tedious and repetitive duties. Max Japan introduced our neighborhood collectively and served as a chance for us to launch numerous new improvements, together with efficiency enhancements in Adobe Illustrator, which speed up options like pan and zoom and loading giant information as much as 10x quicker.
We had one other nice quarter within the enterprise with extra prospects turning to Firefly Providers and customized fashions to scale on-brand content material manufacturing for advertising and marketing use instances, together with main manufacturers akin to Deloitte Digital, IBM, IPG Well being, Mattel, and Tapestry. Tapestry, for instance, has carried out a brand new and extremely productive digital twin workflow utilizing customized fashions in Firefly. You will 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 reap the benefits 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 consumers, 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 likely be unveiling extra thrilling product capabilities at Adobe Summit and MAXLondon in April. I will now move it to Anil.
Anil S. Chakravarthy — President, Digital Expertise
Thanks, David. Good day, everybody. Expertise Cloud had a robust 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 world wide to ship personalised experiences at scale, serving to prospects drive each top-line progress and productiveness beneficial properties. In Q1, we delivered typical seasonal bookings and superior our pipeline as enterprise prospects initiated the execution of their important 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 prospects to make higher use of their first-party information and to drive extra related advert experiences based mostly on direct buyer relationships. Our portfolio spans your complete content material provide chain from creation and manufacturing, workflow and planning, asset administration, supply, and activation by way of to reporting and insights. Now we’re bringing collectively creativity and advertising and marketing with AI to assist our prospects understand the total potential of personalization at scale.
So far, 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 carry 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 purposes with Q1 subscription income rising almost 50% 12 months on 12 months; of real-time CDP collaboration, delivering a safe setting 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 instantly 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 might scale back the labor price of migration as much as 35%.
Business analyst recognition in main analyst experiences, together with the Gartner Magic Quadrant for Digital Expertise Platforms and Gartner Magic Quadrant for Personalization Engines. Robust demand for Firefly Providers and customized fashions as a part of the GenStudio answer 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. Robust partnership momentum with GenStudio for Efficiency Advertising and marketing supporting advert creation and activation for Google, Meta, Microsoft Adverts, Snap and several other companions, together with Accenture, EY, IPG, Merkel, and PwC providing vertical extension apps.
Partnership with Dentsu to carry GenAI for playground to manufacturing for our joint prospects with Adobe GenStudio Dentsu Plus. Key international buyer wins, together with Delta Airways, Ford, IBM, Microsoft, PNC Monetary Providers, and Tyson Meals. These buyer wins deal with the continued 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 way of Adobe GenStudio.
Our One Adobe enterprise go-to-market engine allows prospects to ship personalised and on-brand content material at scale. The mix of our built-in enterprise options throughout creativity and advertising and marketing is a singular 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 1000’s of consumers, companions, and builders from world wide. We’ll share our imaginative and prescient for a way manufacturers can apply the facility of generative AI and agentic expertise to attain personalization at scale, and look ahead to highlighting numerous product improvements.
I will now move it to Dan.
Daniel J. Durn — Government Vice President, Chief Monetary Officer
Thanks, Anil. Adobe’s enterprise has grown during the last decade by delivering world-class merchandise grouped inside three clouds: Inventive Cloud, Doc Cloud, and Expertise Cloud. In parallel, we have continued to broaden throughout cloud choices to raised serve totally different buyer teams. Examples embody Acrobat, which is mirrored in Inventive Cloud and Doc Cloud; GenStudio, which incorporates Inventive Cloud, Specific, Firefly Providers, and Expertise Cloud.
Enterprises who need 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 likely be pushed by innovation in service of each enterprise professionals and customers and artistic 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’ll, subsequently, 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 artistic and advertising and marketing professionals. Subscription income offered 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 the moment’s name, I will cowl three essential 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 forex. 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 have 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 forex.
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 forex. First quarter digital media progress drivers included: robust progress for Acrobat throughout all routes to market and geographies; Acrobat net 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. Power in consumer adoption and engagement of Acrobat AI Assistant pushed by enlargement of options, together with help for added languages and contract intelligence capabilities. Progress of artistic flagship choices pushed by all apps, inventory, imaging and pictures.
Continued momentum in artistic net and cellular choices with 35% 12 months over 12 months ending paid subscription progress, and robust momentum within the enterprise, pushed by Firefly Providers 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 forex. Digital expertise subscription income was $1.30 billion, rising 11% 12 months over 12 months as reported and in fixed forex.
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 fee 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 forex, and CRPO rising 11% 12 months over 12 months or 12% in fixed forex. Our money flows from operations within the quarter have 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 concentrating 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 anticipate non-GAAP working margin of roughly 45% and a non-GAAP tax fee of roughly 18.5%.
The 12 months is off to a very good 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 deal with 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 way of our extremely differentiated options and confirmed go-to-market execution to unleash the facility of creativity. Wanting forward, we’re excited concerning the alternatives to drive progress for our prospects as we proceed to form the long run within the period of AI.
We look ahead to 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, when you took the AI ebook of enterprise, it might be low single-digit % of your whole income for the 12 months. I assume many are asking, when does this develop into extra materials? How lengthy does it take? What’s required? Perhaps simply assist us stroll by way of the AI journey and the way that interprets to income.
Shantanu Narayen — Chairman and Chief Government Officer
Joyful to, Brent. For those who take a step again and give it some thought, we have all the time talked concerning the AI journey as three elements. 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 of us as nicely prior to now. A major quantity of the AI monetization can be occurring by way of attracting folks to our subscription, ensuring they’re retained and having them drive higher-value worth SKUs. So, when anyone buys Inventive Cloud or when anyone buys Doc Cloud, in impact, they’re really monetizing AI. However along with that, Brent, what we wished to do was provide you with a taste for the brand new stand-alone merchandise that now we have after we’ve talked about introducing Acrobat AI Assistant and rolling that out in numerous languages, Firefly, and ensuring that now we have a brand new subscription mannequin related to that on the net, Firefly Providers 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 mentioned we might double. However I feel by way of the influence additionally on the general enterprise, that has had a cloth half. However when you play this out a little bit bit extra and also you speak about what traders can anticipate, I feel with the brand new Firefly app that is come out, this can be a net product with a brand new subscription, potential to have the video mannequin, potential to have ideation as a part of it.
Consider it as then integrating Photoshop net, Specific net, and the entire different merchandise, all of that can be upside. And you will 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 will 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 broaden 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 subsequent query will come from Brent Bracelin with Piper Sandler.
Brent Bracelin — Analyst
Hello, thanks for taking the query. Good afternoon. I wished to double-click into the demand linearity you noticed within the quarter. I admire the commentary reaffirming 11% digital media ARR progress information for the total 12 months.
However may you present extra coloration on traits you noticed within the quarter throughout Inventive and Doc Cloud right here? Thanks.
David Wadhwani — President, Digital Media
Yeah, pleased to try this. So, once more, simply digital media ARR was a 12.6% progress, which is in keeping with our expectation and likewise the combination was in keeping with our expectations. For those who take a step again and also you take a look at the demand and kind of the best way the enterprise performed out this quarter, it is in step with what we have seen traditionally, and we have seen kind of a broad-based demand for the merchandise with a couple of highlights that I feel are value 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 numerous 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 definitely 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 a fantastic product. The product proper now could be simply — it is an incredible 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 have now 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 far 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 characterize new monetization fashions. We launched Photoshop cellular and net.
We noticed tons of of articles, 30 million social engagements. We have been simply listed because the centered app on the App Retailer over the weekend. We noticed some nice new advances for AI coming into Lightroom net and cellular. Premier additionally noticed some nice advances by way of AI.
So, plenty of momentum in that enterprise. And what’s actually thrilling is that as we have finished all of this innovation, as Shantanu was speaking about, we even have three huge 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 robust 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 simply echo what you have been saying, I feel within the enterprise, we see numerous demand for creativity and advertising and marketing and AI coming collectively. Each CMO that we discuss to, each company that we work with, they’re all very all for how generative AI can be utilized to remodel 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 large traction and we noticed numerous each buyer wins, in addition to numerous company companions, and we look ahead to unveiling much more of this at Summit.
David Wadhwani — President, Digital Media
So, off to a fantastic begin, I feel, with innovation, new choices and you may anticipate to see new choices and friends within the months forward.
Brent Bracelin — Analyst
Useful. Stay up for speaking to you subsequent week. Thanks.
Operator
And the subsequent query will come from Keith Weiss with Morgan Stanley.
Keith Weiss — Analyst
Wonderful. Thanks guys for taking the query And thanks for the extra disclosure. I feel it is a actually attention-grabbing view type of breaking down the artistic and advertising and marketing professionals versus the enterprise professionals and shopper group. And type of following on that final query, appropriate me if I am unsuitable, however it feels type of bullish to me that the enterprise professionals and shopper group has a stronger progress fee, artistic at 15% artistic, and advertising and marketing professionals a little bit bit behind as a result of it seems like enterprise professionals and shopper group, these merchandise can be quicker gross sales cycle, notably on the buyer aspect of the equation, quicker adoption.
The artistic and advertising and marketing professionals, this broader answer that you just’re making an attempt to promote would have an extended gross sales cycle. So, the query is, am I enthusiastic about 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 kind 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
Effectively, Keith, I imply, a part of our purpose was actually to begin to present perception into by the shopper teams, how we’re beginning to see it. And to a point, when persons are questioning how we are literally driving artistic, and the fact is that when you consider the GenStudio set of merchandise, which we now mentioned is a $1 billion ebook of enterprise, AEP and Apps can be a $1 billion ebook of enterprise and the artistic skilled, that is really addressing your complete content material provide chain. And so, by way of that progress fee, 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 fee 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 pondering 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 wished 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.
For those who 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 likely be actually the early metrics and the symptoms of how Specific and Acrobat proceed to develop. So, I am glad that you just discovered the extra disclosure helpful. And that was the concept.
And to Brent’s earlier query as nicely, I simply wished 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 area, we have really 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 area, 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 speak about 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 reap the benefits 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 consider the final 4 quarters, we have repurchased virtually $11 billion. And we have all the time talked about if there’s alternatives to be opportunistic alongside the best way, we might reap the benefits of it. And I feel that is what you noticed play out in Q1.
We have got a robust standpoint concerning the monetary profile all through the course of the 12 months. Joyful to reaffirm steering, however we’ll 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 positively 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 positively helps.
Operator
And the subsequent query will come from Kash Rangan with Goldman Sachs.
Kash Rangan — Analyst
Hello. Thanks very a lot. A lot admire the disclosure and the colour and every little thing that goes with it. Shantanu, query for you.
Once you pivoted the corporate to a brand new enterprise mannequin by way of cloud, initially, there was numerous skepticism. Then you definately proved to us that the TAM was really bigger within the new artistic meets the cloud cycle. And the corporate was capable of speed up by way 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 just’re taking part in protection and that AI is a price of staying in enterprise and holding your self related to your artistic base.
However how do you look, since you’ve got been by way of this one huge shift earlier than, you’ve got received numerous expertise, the place is your conviction on how actually incremental AI might be on your progress? Might you be at an identical juncture the place you are poised to get into the subsequent cycle is definitely greater TAM, to not put phrases in your mouth, however even perhaps dare I say the potential to speed up off of the nice progress that we have seen to date? Thanks a lot.
Shantanu Narayen — Chairman and Chief Government Officer
Effectively, Kash, what I admire concerning the query is, that is what we wished to actually tee up in entrance of the FA assembly. However for sure, 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 folks that we are able to carry into the fold for creativity and productiveness and discuss extra about how we’re, with the distribution that now we have and with the month-to-month common customers that now we have, monetize that very similar to we have monetized Acrobat. And we positively consider that it is a large, large alternative. I feel it is the identical factor throughout creators.
There are extra creators which might be getting into. And once more, I will preview a little bit little bit of what David will share, which is when you consider the online 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 need to enter that occupation is considerably bigger than it is ever been. And so, with merchandise like Photoshop on net and cellular, in addition to Firefly app, that is clearly the intent to point out how that as a subscription service and attracting the subsequent era creators will likely be a tailwind. After which if 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, to be able 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 really inserted into advert programs and social media. And so, once more, I feel setting the stage for a way that is a bigger alternative. However when you take a look at it from not simply the size of we have 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’ll 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 now we have to innovate and execute in opposition to that. So, I’m extra excited concerning the bigger alternative for sure because of AI. And we have talked about this, Kash. For those who do not reap the benefits 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
Wonderful. And one follow-up and really fast, promise if I can. With the turbulence within the markets with commerce wars, and so on., tariffs, and so on., how do you are feeling your buyer base goes to behave? Is every little thing going to be on observe from what you possibly can inform by speaking to your prospects? Or are they type 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
Effectively, I imply, I feel we simply kind of mentioned, assuming present macroeconomic situations, I imply, now we have a various enterprise. We’re off to a very good begin within the conversations that we’re having. And all of us have conversations with all of our different friends. And I feel now we have a seasoned administration staff that may navigate it.
However prospects, I feel we’re all collectively making an attempt to know what occurs within the economic system. However the tariffs, and so on., 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 subsequent query will come from Mark Moerdler with Bernstein Analysis.
Mark Moerdler — Analyst
Thanks very a lot. Dan, are you able to give us extra coloration 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 bought 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 the moment. 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 elements of our portfolio collectively to fulfill their highest worth wants round these two groupings of the purchasers, 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 consumers. And so, the intent round that is to actually carry to life how we’re driving our technique, how we’re executing in opposition to it gives the perfect perception in how the corporate is acting on a go-forward foundation.
Shantanu Narayen — Chairman and Chief Government Officer
And Mark, no less than two particular issues that we have heard as suggestions from all of you of us are, you perceive that there is an Acrobat inside the Inventive Cloud and Doc Cloud. This pulls out the enterprise to be able to present the momentum and the chance in that enterprise. And to your query about One Adobe, sure, I imply, the GenStudio answer is, for sure, taking seats of merchandise like Photoshop or the Inventive Cloud, is including Specific in it for each marketer in there. We have now Firefly Providers and customized fashions.
And so, the extra we promote that as one enterprise providing and we need to speed up the sale of that as a strategic partnership, that is now additionally all mirrored in a type of income slices. So, we consider that the extra disclosure can even provide you with extra visibility into routes to market.
Mark Moerdler — Analyst
That makes numerous sense. And one fast different one. Ought to we anticipate 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 subsequent 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 a number of the new numbers, notably the AI ebook of enterprise. And that is the place I wished to ask the query. Mainly, look, you are going to give us a quantity, we’ll ask for extra.
So, in that spirit, when you take a look at the $125 million and you consider the segmentation between Assistant, Firefly, GenStudio, is there any triangulation round perhaps how a lot — what the chances of for the breakout of these and perhaps stack rank the expansion charges which might be going to get you to double that by the tip of the 12 months? After which type of equally, if you consider 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, initially, when you take a look at the combination of this stuff, 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 a little bit little bit of a way that the composition goes to kind of like be based mostly on the tenure of those merchandise out there. 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 provides you a way of the size of those companies and actually the momentum that is within the enterprise.
And if you take a look at it, the core innovation that Shantanu talked about led to numerous utilization. And now we’re beginning to get to a degree the place we are able to monetize it. For Firefly, now we have imaging, vector, design, video, voice, video, and voice popping out simply a few weeks in the past, off to a very good begin. I do know there have been some questions on how necessary is commercially security of the fashions.
They’re essential. Loads of enterprises are turning to them for the standard, the breadth but in addition the industrial security, the artistic management that we give them round having the ability to actually match construction, fashion, set keyframes for exact video era, 3D to picture, picture to video. The inclusion additionally, on a highway map, and we’ll share extra about this subsequent week of third-party fashions actually establishes us because the one-stop store for something it’s worthwhile to do with creativity. After which if you ladder that right into a Firefly stand-alone provide with a number of tiers with Customary, Premium, and Professional, if you take a look at that built-in into Inventive Cloud, you could possibly think about additional tiering there.
Once you take a look at the work that we’re doing along with 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 provide, 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 actually 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 just discover the kind of data helpful. I will provide you with a little bit bit extra coloration as nicely on that. Bear in mind, with Acrobat, now we have AI Assistant that is separate, so that is solely the separate Acrobat AI Assistant.
So, nearly all 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 depend that if that got here as a part of an Acrobat Premium SKU. So, color-wise to date, artistic really represents nearly all of that. However as , the Acrobat enterprise is doing nice.
Alex Zukin — Analyst
That is very, very useful. I assume perhaps simply to observe alongside there. You have seen — or we have seen numerous 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 enthusiastic about your method towards natural versus inorganic innovation right here, given simply the plethora of performance that you just’re releasing throughout the board.
Shantanu Narayen — Chairman and Chief Government Officer
Because it pertains to the core artistic fashions, we could have our commercially protected, as David mentioned, Alex, and so inside Firefly as an utility and inside every of our product integrations and Photoshop, and so on., anticipate Firefly. We have additionally signaled and we have proven how we might help third-party fashions related to that. And so, whether or not it is a customized mannequin that we create for one among our enterprise prospects, I feel when 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, now we have help for different third-party fashions.
And so, I feel it is a very sensible and it is the best one, and we’ll help the entire artistic third-party fashions that individuals need to help, 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 help for that as nicely. And so, consider it as we’re the best way wherein these fashions really ship worth to a consumer. And so, it is really identical to we did with Photoshop plug-ins prior to now, you are going to see these fashions supported inside our flagship purposes. Hopefully, that provides you a way.
Operator
And the subsequent query will come from Mark Murphy with J.P. Morgan.
Mark Murphy — Analyst
Thanks very a lot. I used to be questioning when you can simply touch upon what you are sensing basically by way of promoting exercise and shopper spending traits 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 enormous sectors of the economic system and so they 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 setting.
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 expertise to show how the expertise 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 don’t seem to be going to exit of fashion because it pertains to any enterprise saying, how can I exploit expertise to perform my goals?
Mark Murphy — Analyst
OK. I admire 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 suppose it is going to be the identical composition, or is one thing going to be coming in from the video fashions that may change the combination 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 likely be a part of this. I feel numerous these nice questions, Mark, I imply, on the FA assembly, we’ll try to give extra coloration, in addition to to what we’re seeing. However we wished to no less than begin to define what merchandise have been in there, the expansion charges that we anticipate, and the way we’re executing on, as I mentioned, the innovation, utilization, understanding, and providing these as monetization. So, we’ll additionally, I do know, preserve a observe of the continued questions and deal with 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 will preserve it to 1. David, perhaps for you. It is nice to see the Firefly app tiers that prospects can add to their present subscriptions.
And perhaps to Shantanu’s level, this can be a higher subject for FA Day, however I am questioning if we may simply speak about, how do you envision kind of the potential connect fee there? I imply, Firefly is clearly an unprecedented providing so perhaps that is actually powerful to reply. However are there any merchandise that perhaps Adobe has seen prior to now like Adobe Inventory or any others that you just take a look at as kind of a framework for what that adoption curve may appear like?
David Wadhwani — President, Digital Media
Yeah. I feel, so if we have a look — when you take a step again, the rationale we’re so excited concerning the Firefly app is actually twofold. One is strictly 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 strain 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 numerous worth out of that.
So, what you will note 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 possibly can anticipate to see what we have finished all alongside is take a look at the place the utilization is, take a look at the place the joy is, and ensure we get the pricing and the tiering proper in a means that maximizes the chance for our prospects and maximizes the chance and the worth that Adobe and our shareholders get as a part of that, too. So, that will likely be a giant space and a giant alternative, and we see numerous potential there as we glance forward. The opposite half that I need to ensure 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 have now a excessive diploma of conviction that it is including worth and being utilized by artistic professionals, however it’s additionally proving to be a very good onboarding alternative for next-generation professionals and creators normally. And that is the place Shantanu talked about earlier, there may be an growing alternative to merge our net and cellular choices round not simply the generative capabilities however what you do with the content material you generate with Photoshop net and cellular, Specific net and cellular. And you may think about different capabilities coming round video as nicely.
So, we’re enthusiastic about Firefly Providers and the monetization capabilities there in each instructions, new customers and likewise worth and ARPU for our present base.
Shantanu Narayen — Chairman and Chief Government Officer
And Saket, since that was the final query, thanks. And perhaps simply in a fast abstract, I imply, the 4 issues that I would go away you all with is Q1 was a robust begin. We have been happy with our efficiency. When you consider the addressable markets that now we have, as we take into consideration how we serve the enterprise skilled and the buyer and the artistic skilled and the advertising and marketing skilled, we consider that, that is an immense alternative that is solely going to develop because 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 means wherein we delight them. And we’re beginning to define how the monetization will likely be totally different for every one among 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 look ahead to becoming a member of you all on the FA assembly, and thanks for becoming a member of us at the moment.
Operator
[Operator signoff]
Period: 0 minutes
Name contributors:
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
