Financial Report Outlook | Can Adobe spread its wings with AI in the fiscal year 2025? The first answer sheet for Q1 is about to be revealed.

Adobe Inc. (ADBE.US) is set to release its first-quarter financial results for the fiscal year 2025 after the market closes on March 12th, Eastern Time. Wall Street expects the adjusted earnings per share to be $4.97, with revenue of $5.66 billion. The Adobe management anticipates revenue for the first quarter to fall within the range of $5.63 billion to $5.68 billion, and adjusted earnings per share to be between $4.95 and $5.00. In comparison, in the first quarter of 2024, the company reported earnings per share of $4.48 and revenue of $51.8 billion. Over the past three years, Adobe has consistently exceeded earnings expectations. Mixed results in 2024 For Adobe, 2024 was a year of mixed results. The company saw record-high revenue, but its stock price took a sharp downturn. Since adopting a Software as a Service (SaaS) business model, Adobe's subscription revenue has continued to grow due to support from its Creative Cloud platform. Meanwhile, the company has made significant efforts to integrate artificial intelligence technology, enhance user engagement, and maintain high customer loyalty. Over the past twelve months, Adobe's stock price has fluctuated significantly, with a cumulative decline of approximately 17%. However, the drop in stock price has lowered the barrier to entry for investors. Given the company's ongoing expansion in artificial intelligence business and its dominant position in the creative software field, Adobe stock may present an attractive investment option. In the final quarter of the 2024 fiscal year, adjusted earnings per share grew by 13% year-over-year, reaching $4.81, surpassing Wall Street's expectations. According to report data, net income for the fourth quarter was $1.68 billion, or $3.79 per share, compared to $1.48 billion, or $3.23 per share, in the same period the previous year. The outstanding earnings performance reflects an 11% revenue growth, reaching $56.1 billion, primarily driven by double-digit growth in digital media revenue, accounting for over 70% of total revenue. The company has exceeded revenue expectations for the eighth consecutive quarter. In the fourth quarter of the 2024 fiscal year earnings call, Adobe stated, "Our strategy is aimed at unleashing the creativity of everyone, enhancing document processing efficiency, and supporting the development of digital businesses with significant market opportunities. Adobe continues to steadily progress on transformative innovation, industry and brand leadership, solid financial performance, and profit growth. We are delivering Adobe's extraordinary experiences to an increasing number of global customers and firmly grasping the tremendous market opportunities at hand. Adobe is in a highly favorable position for development in 2025 and beyond." Outlook Adobe anticipates total revenue for the fiscal year 2025 to fall between $23.3 billion and $23.55 billion, with earnings per share expected to range from $20.20 to $20.50 for the full year. Despite increasing market competition, the company is poised to achieve its financial goals thanks to stable revenue growth and healthy free cash flow. It is worth noting that in the most recent quarter, the company's gross profit margin was as high as 89%. While there is no clear timeline for when Adobe's investments in its artificial intelligence-related products will become profitable, these investments are expected to be important drivers for the company's business development in the long run. As of now, Adobe's stock performance has not been stellar ahead of the earnings report. On Thursday, the stock opened at $451.24, with prices trending lower in early trading.