Summary
Adobe reported record first-quarter fiscal 2025 revenue of $5.71 billion, up 10.3% from the prior-year quarter. Revenue growth was 11 percent in constant currency. Gross profit rose to $5.09 billion, up 10.9%, and gross margin reached 89.1%, up 0.5 percentage points. Operating income jumped to $2.16 billion, up 138.5%, while operating margin expanded to 37.9%, up 20.4 percentage points. Net income was $1.81 billion, up 192.1%, and diluted earnings per share was $4.14, up 204.4%. The prior-year quarter included the Figma termination fee, which depressed GAAP operating income and net income. On a non-GAAP basis, operating income was $2.72 billion, net income was $2.22 billion, and diluted earnings per share was $5.08.
Cash generation was strong. Operating cash flow was $2.48 billion, up 111.4% from the prior-year quarter. Capital expenditures were $26 million, down 29.7%. Deferred revenue ended the quarter at $6.49 billion, up 6.2%, and remaining performance obligations were $19.69 billion, up 12.0%. Current remaining performance obligations were 67 percent. Adobe repurchased approximately 7.0 million shares during the quarter. Subsequent to quarter end, the company entered into a $3.5 billion accelerated share repurchase agreement, leaving $10.9 billion under its March 2024 repurchase authority. In January 2025, Adobe issued $800 million of senior notes due 2028, $700 million due 2030, and $500 million due 2035. Total senior notes outstanding were $6.15 billion.
Digital Media ARR was $17.63 billion at quarter end, up 12.6% year over year. Digital Media segment revenue grew 11% year over year, and Digital Experience segment revenue grew 10%. Digital Experience subscription revenue grew 11%. The company's AI-first standalone and add-on innovations exited the quarter with over $125 million in ending ARR book of business. Under Adobe's new customer group disclosure, Business Professionals and Consumers subscription revenue grew 15%, while Creative and Marketing Professionals subscription revenue grew 10%. Adobe Express and Acrobat AI Assistant are part of the Business Professionals and Consumers group, while Adobe Firefly and Adobe GenStudio are part of the Creative and Marketing Professionals group. Subscription revenue was 96% of total revenue. Revenue in the Americas grew 9%, EMEA grew 14%, and APAC grew 7%. Foreign currency movements reduced revenue by approximately $74 million, partly offset by $26 million in net hedging gains.
Management reaffirmed its fiscal 2025 targets and set second-quarter fiscal 2025 targets. For the second quarter, total revenue is targeted at $5.77 billion to $5.82 billion, Digital Media segment revenue at $4.27 billion to $4.30 billion, Digital Experience segment revenue at $1.43 billion to $1.45 billion, and Digital Experience subscription revenue at $1.315 billion to $1.325 billion. Non-GAAP diluted earnings per share is targeted at $4.95 to $5.00. For fiscal 2025, total revenue is targeted at $23.30 billion to $23.55 billion, Digital Media segment revenue at $17.25 billion to $17.40 billion, Digital Media ending ARR growth at 11.0% year over year, Digital Experience segment revenue at $5.80 billion to $5.90 billion, and Digital Experience subscription revenue at $5.375 billion to $5.425 billion. Non-GAAP diluted earnings per share is targeted at $20.20 to $20.50. The second-quarter targets assume a non-GAAP operating margin of 45 percent, a non-GAAP tax rate of 18.5 percent, and a diluted share count of 432 million. The fiscal 2025 targets assume a non-GAAP operating margin of 46 percent, a non-GAAP tax rate of 18.5 percent, and a diluted share count of 433 million. The company named risks including macroeconomic conditions, inflation, interest rates, foreign currency fluctuations, potential economic slowdowns, geopolitical pressures, trade regulations, AI development and adoption, competition, security incidents, third-party relationships, talent retention, complex sales cycles, tax regulation changes, litigation, intellectual property protection, and debt obligations. Adobe also noted that the OECD 15% global minimum tax regime is effective for fiscal 2025 and is not expected to have a material impact. Unrecognized tax benefits may decrease by up to $55 million over the next 12 months. Subsequent to quarter end, long-term supplier commitments increased minimum purchase obligations by approximately $1.3 billion through December 2029. Adobe will host an Investor Meeting at Adobe Summit on March 18, 2025.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $5.71B | $5.61B | +1.9% | $5.18B | +10.3% |
| Gross profit | $5.09B | $4.99B | +2.0% | $4.59B | +10.9% |
| Gross margin | 89.1% | 89.0% | +0.1 pp | 88.6% | +0.5 pp |
| Sales & marketing | $1.50B | $1.54B | -2.7% | $1.35B | +10.6% |
| General & administrative | $367.0M | $456.0M | -19.5% | $352.0M | +4.3% |
| Total operating expenses | $2.93B | $3.03B | -3.4% | $3.69B | -20.5% |
| Operating income (loss) | $2.16B | $1.96B | +10.5% | $907.0M | +138.5% |
| Operating margin | 37.9% | 34.9% | +2.9 pp | 17.5% | +20.4 pp |
| Net income (loss) | $1.81B | $1.68B | +7.6% | $620.0M | +192.1% |
| Net margin | 31.7% | 30.0% | +1.7 pp | 12.0% | +19.7 pp |
| Diluted EPS | $4.14 | $3.74 | +$0.40 | $1.36 | +$2.78 |
Risks
Adobe faces increasing competition from companies offering generative AI capabilities, including text-to-image, text-to-video and multi-modal offerings that compete directly with its creative offerings. Competitors may incorporate AI more successfully and efficiently and achieve greater and faster adoption, which could impair Adobe's ability to compete.
The EU AI Act was adopted in 2024 and will be implemented in phases through 2030, and other jurisdictions are considering similar legislation. These evolving AI regulations may increase compliance, governance and research and development costs and could require changes to Adobe's AI development practices, monetization strategies or indemnity protections.
Adobe expects significant investments in AI development, adding AI capabilities to offerings and scaling AI offerings, which may increase the cost of its offerings, including computing costs, and adversely impact margins. Research and development expenses increased 9% in the first quarter of fiscal 2025, driven partly by increases in hosting services and data center costs including AI training costs.
Adobe is subject to global adverse economic conditions, including inflation, interest rates, trade disputes, tariffs, economic sanctions and armed conflicts. MD&A states that the unknown impacts of current and future trade regulations remain uncertain and could affect business and financial results.
Enterprise offerings have extended and complex sales cycles, and Adobe is increasingly offering end-to-end solutions that include cross-cloud and generative AI capabilities, which can increase technical or contractual assurances and extend sales cycles. Enterprise sales are uneven, with a higher percentage of a quarter's total sales occurring in the final weeks of each quarter.
The technology industry faces substantial competition for talent, particularly for AI and cybersecurity backgrounds, and Adobe may face higher compensation costs to retain and recruit senior management or highly skilled personnel. These costs may not be offset by innovation, improved productivity or increased sales.
As of February 28, 2025, Adobe had $6.15 billion in senior unsecured notes outstanding and a $3 billion commercial paper program with no amounts outstanding. In January 2025, Adobe issued $800 million of 2028 notes, $700 million of 2030 notes and $500 million of 2035 notes; interest expense increased 130% in the first quarter of fiscal 2025 compared to the year-ago period due to senior notes issued in April 2024 and January 2025.
Adobe is subject to expanding global data protection, privacy and security laws and regulations, including the GDPR, CCPA, CPRA and China's Personal Information Protection Law and restrictions on cross-border data transfers. These may affect Adobe's ability to reach customers, require contract changes and expose it to fines, litigation and restrictions on sales.
SaaS KPIs
All quarters →Remaining Performance Obligations (RPO)
Current Remaining Performance Obligations (cRPO)
Digital Media Annualized Recurring Revenue (ARR)
Summary, forecast, risks and KPIs are extracted from ADOBE INC.'s SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.