A big appetite for all things AI has helped propel Adobe to a banner year as the software giant wove generative tech throughout its suite of creative tools.
Those boom times showed some slight signs of stalling this week: While Adobe reported overall strong earnings and revenue growth, its stock slipped around 6% amid an outlook for next quarter that was slightly weaker than what analysts had expected, according to Yahoo! Finance.
The results came amid signs that Wall Street is increasingly looking for reassurance that big pushes into generative AI can be turned into money-making businesses.
Adobe has spent much of the year weaving its image-generation AI, called Firefly, throughout products like Photoshop, Illustrator, and its stock image bank. The company claims its commitment to purportedly copyright-safe training and deep archive of imagery sets it apart from its competition in this area. The company also said it has seen strong adoption and demand for Firefly so far.
“We continue to see really, really strong adoption and usage of it, partially as a standalone business, but also integrated into our Photoshop and Illustrator and these existing workflows,” David Wadhwani, president of Adobe’s digital media business, said in the earnings call.
But the company also recently instituted a system of credits and monthly usage caps in order to make the software usage more economical for Adobe. The company also increased the pricing of its Creative Cloud products. Wadhwani said he didn’t expect the pricing structure to dampen demand or usage of the products.
“We integrated the generative capabilities and credits directly into our paid plans with the express intent of driving adoption of the paid subscription plans,” he said. “The usage is great, the utilization is great. I don’t personally expect generative packs to have a large impact in the short term other than to drive more usage, more customers to our paid existing subscription plans.”
Despite the downward movement this week, Adobe’s stock remained up around 75% since the beginning of the year as of Thursday. Wall Street investors will no doubt be paying close attention to how Adobe’s AI rollout continues to gain traction amid pricing changes in the next quarter.
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