ADBE profits name for the length finishing December 31, 2024.
Symbol supply: The Motley Idiot.
Adobe (ADBE 1.14%)Q1 2025 Profits CallMar 12, 2025, 5:00 p.m. ET
Contents:
Ready Remarks Questions and Solutions Name Contributors
Ready Remarks:
Operator
Excellent day, and welcome to the Q1 FY ’25 Adobe profits convention name. Lately’s convention is being recorded. At the moment, I might like to show the convention over to Steve Day, SVP, DX, CFO and company finance, period in-between head of IR. Please move forward, sir.
Steve Day — Leader Monetary Officer and Senior Vice President, Virtual Enjoy
Excellent afternoon, and thanks for becoming a member of us. With me at the name these days are Shantanu Narayen, Adobe’s chair and CEO; David Wadhwani, president of virtual Media; Anil Chakravarthy, president of virtual enjoy; and Dan Durn, govt vp and CFO. In this name, which is being recorded, we can talk about Adobe’s first quarter fiscal yr 2025 monetary effects. You’ll in finding our press free up, in addition to PDFs of our ready remarks and fiscal effects on Adobe’s investor members of the family web site.
The tips mentioned in this name, together with our monetary objectives and product plans, is as of these days, March twelfth, and comprises forward-looking statements that contain dangers, uncertainty, and assumptions. Precise effects would possibly range materially from the ones set forth in those statements. For more info on the ones dangers, please assessment these days’s profits free up and Adobe’s SEC filings. In this name, we can talk about GAAP and non-GAAP monetary measures.
Our reported effects come with GAAP enlargement charges, in addition to consistent forex charges. All through this presentation, Adobe’s executives will check with consistent forex enlargement charges except in a different way said. Non-GAAP reconciliations are to be had in our profits free up and on Adobe’s investor members of the family web site. I will be able to now flip the decision over to Shantanu.
Shantanu Narayen — Chairman and Leader Government Officer
Thank you, Steve. Excellent afternoon, and thanks for becoming a member of us. Adobe had a report first quarter. We accomplished $5.71 billion in earnings in Q1, representing 11% year-over-year enlargement.
GAAP profits in keeping with percentage for the quarter was once $4.14, and non-GAAP profits in keeping with percentage was once $5.08, representing 13% year-over-year enlargement. Our efficiency displays the continuing essential function that Adobe merchandise play in powering the worldwide virtual economic system. As well as, given Q1 efficiency, we’re happy to reaffirm our fiscal ’25 objectives. Subsequent week is Adobe Summit, our flagship Virtual Enjoy Convention, the place we can unveil the newest inventions throughout our portfolio.
As well as, we can host our annual investor assembly on March 18th, and we needed to preview what we can percentage about our enlargement technique. Adobe’s good fortune during the last decade has been pushed via the exponential enlargement of the inventive economic system and the customer-focused inventions now we have delivered throughout Inventive Cloud, Record Cloud, and Enjoy Cloud. Our groundbreaking answers are empowering an ever-expanding universe of customers to consider, create, and ship standout content material that drives outstanding reports. Adobe’s challenge to switch the arena thru personalised virtual reports is extra essential than ever as virtual continues to swiftly become paintings existence, training, and leisure.
AI represents a generational alternative to reimagine our era platforms to serve an more and more huge and numerous visitor universe. With creativity on the core, we have now been evolving our choices and routes to marketplace to watch for the distinct wishes of inventive execs and next-generation creators, advertising and marketing execs, businesses and enterprises, and the wider set of customers and trade execs. We consider this may power persisted enlargement and profitability. Inventive execs and creators want energy and precision to carry their concepts to existence throughout any media sort.
The following technology of creators desires the versatility of internet and cellular gear along with the facility of the desktop. They’re going to have the benefit of the number of AI fashions to ideate and discover inventive probabilities. Adobe will serve this rising group with probably the most complete set of internet, cellular, and desktop programs delivered thru more than a few subscription tiers. Along with Inventive Cloud, we can be offering new Firefly internet app subscriptions that combine and are an on-ramp for our internet and cellular merchandise.
Whilst Adobe’s commercially protected Firefly fashions can be integral to this providing, we can enhance further third-party fashions to be a part of this inventive procedure. The Firefly app would be the umbrella vacation spot for brand spanking new inventive classes like ideation. We not too long ago offered and included our new Firefly video type into this providing, including to the already supported symbol, vector, and design fashions. Along with monetizing stand-alone subscriptions for Firefly, we can introduce more than one Inventive Cloud choices that come with Firefly tiering.
Advertising and marketing execs want to create an unparalleled quantity of compelling content material and optimize it to ship personalised virtual reports throughout channels, together with cellular programs, e-mail, social media, and promoting platforms. They are in search of agility and self-service, in addition to built-in workflows with their inventive groups and businesses. To reach this, enterprises require customized, commercially protected fashions and brokers adapted to handle the inefficiencies of the content material provide chain. With Adobe GenStudio and Firefly Products and services, Adobe is reworking how manufacturers and their company companions collaborate on advertising and marketing campaigns, unlocking new ranges of creativity, personalization, and potency.
The combo of the Adobe Enjoy platform and apps and Adobe GenStudio is probably the most complete advertising and marketing platform to ship in this imaginative and prescient. Along with our direct gross sales power, we can leverage an ecosystem of companions and businesses to promote, put in force, perform, and ship trade results to corporations of all sizes. Now we have sped up One Adobe offers via more and more integrating our inventive and advertising and marketing merchandise right into a unmarried undertaking resolution. We can proceed to put money into gross sales capability to ship Adobewide choices throughout trade, training, and govt.
Trade execs and shoppers need ease of use throughout internet and cellular thru a freemium type. They are in search of fast and clean AI-first category-defining inventive programs to assist them stand out. Whilst the desire for inventive expression continues to develop exponentially, the true price is in integrating creativity and productiveness in an all-in-one resolution. The combo of Categorical and Acrobat is Adobe’s alternative to make the adventure from record introduction to intake smoother than ever.
AI Assistant in Acrobat Reader and Categorical will boost up the supply of latest conversational and agentic interfaces so as to add price to this blended providing. Income enlargement can be pushed via distribution throughout internet and cellular app retail outlets, partnerships with main instrument suppliers, and concentrate on SMB and undertaking gross sales. Our generative AI innovation is infused around the breadth of our merchandise, and its have an effect on is influencing billions of ARR throughout acquisition, retention, and worth enlargement as shoppers have the benefit of those new features. This energy may be mirrored in our AI-first stand-alone and add-on merchandise reminiscent of Acrobat AI Assistant, Firefly App and Products and services, and GenStudio for Efficiency Advertising and marketing, that have already contributed more than $125 million ebook of commercial exiting Q1 fiscal ’25.
And we think this AI ebook of commercial to double via the top of fiscal ’25. In abstract, via leveraging the breadth of our merchandise and era platforms within the generation of AI and handing over new adapted choices and answers via visitor teams, we can power the engine of enlargement for the following decade. We can win via specializing in trade execs and shoppers and inventive and advertising and marketing execs with a unified product technique and go-to-market. We can begin to supply monetary visibility in those 2 new teams beginning this quarter and enlarge in this at our Investor Day at Summit subsequent week.
I’m going to now flip it over to David to speak about the momentum in our virtual media trade.
David Wadhwani — President, Virtual Media
Thank you, Shantanu. Hi, everybody. In Q1, we accomplished earnings of $4.23 billion, which grew 12% yr over yr. We exited the quarter with $17.63 billion of virtual media ARR, rising our finishing ARR ebook of commercial 12.6% yr over yr.
We proceed to look wholesome efficiency in each Inventive Cloud and Record Cloud. Inventive enlargement was once pushed via broad-based adoption throughout our routes to marketplace and product portfolio with specific energy in new choices like Firefly Products and services, increasingly One Adobe offers and a rising base of internet and cellular customers. Record Cloud persisted to look sturdy natural call for, persisted optimizations in loose to paid conversion trips and AI Assistant being launched in more languages. We drove sturdy efficiency throughout virtual media in rising markets.
The consequences constitute a excellent begin to the fiscal yr. Creativity goes mainstream, and I wish to supply extra coloration at the audiences we serve. We are living in a visual-first global the place inventive expression has turn out to be pervasive in each and every side of existence. Trade execs and shoppers alike purpose to supply visually wealthy, attractive content material, whether or not it is a presentation, birthday invitation or social put up.
On the identical time, inventive execs, creators, and entrepreneurs are competing at the high quality in their on-line presence and the personalised reports they ship to shoppers. They flip to Record Cloud, Inventive Cloud, and Enjoy Cloud to reach their content material targets. Going ahead, on account of AI developments, we see implausible alternative to serve shoppers with audience-specific choices. Trade execs and shoppers are more and more making the most of deep integration between Acrobat, Categorical, and Firefly whilst inventive execs, creators, and entrepreneurs are making an investment in tough workflows throughout Inventive Cloud, our new internet and cellular inventive programs, Firefly and GenStudio.
PDF is still the worldwide same old for virtual paperwork for trade execs, and Adobe Acrobat is revolutionizing the way in which other people interact with them throughout cellular, internet, and desktop. Options like AI Assistant in Acrobat and Reader were a game-hanger for everybody from gross sales groups to scholars in search of sooner insights and smarter record enhancing. And the power to percentage hyperlinks and click on feedback has greater record productiveness and helped power further adoption. Those new features and our cross-service investments have paid off with Acrobat and Reader per thirty days energetic utilization rising 23% yr over yr.
Our good fortune with Acrobat has additionally proven us that whether or not for a gross sales presentation, a college challenge or a social media put up, trade execs and shoppers are in search of an easy-to-use resolution that is helping them create visually compelling content material that stands proud from the gang of generic templates. In reality, an important collection of all paperwork created in Acrobat are visible paperwork, such things as advertising and marketing content material, gross sales pitches, displays, infographics, and canopy pages. We’re making excellent development in addressing this want via embedding Categorical features as a local enjoy in Acrobat with the function of boosting productiveness and making the adventure from record intake to content material introduction smoother than ever. The mixing of Adobe Categorical options in Acrobat lets in customers to create richer PDFs with AI-generated quilt pages, embedded infographics, and custom designed photographs and empowers customers to create totally shaped animated movies and different wealthy virtual output.
We see a lot of early signs of person call for as categorical utilization thru Acrobat has grown 10x yr over yr. Different highlights for trade execs and shoppers come with Acrobat AI Assistant enhance for languages now contains English, French, German, Italian, Portuguese, Spanish, and Jap. Acrobat AI Assistant enhance for prison workflows with contract-specific options. New AI features in Categorical like clip maker for auto technology of video highlights and textual content rewrite to assist produce more practical reproduction.
Expanded Acrobat integrations with Microsoft Edge, Google Chrome, Gmail, and Google Force and robust adoption of hyperlink sharing for richer collaborative reports have resulted in roughly 50% year-over-year enlargement in Acrobat internet per thirty days energetic utilization. Expanded Categorical integrations now come with Miro, Field, Slack, Webflow, and HubSpot. The Categorical ecosystem additionally expanded to 225 plug-ins, greater than doubling within the ultimate yr. Robust trade and scholar adoption, Categorical onboarded just about 6,000 new companies in Q1, representing roughly 50% quarter-over-quarter enlargement.
Scholars with get entry to to specific top rate grew 85% yr over yr. Key world visitor wins come with AT&T, Delta Airways, Disney, Ernst and Younger, IBM, JPMorgan Chase, Microsoft, Paramount, and Qatar Airways. Inventive execs and the following technology of creators who make their residing via designing and generating content material are interested in status out and bringing their distinctive inventive visions to existence with pixel-perfect precision. As we mark the thirty fifth anniversary of Photoshop, Adobe Inventive programs stay the answers of selection for the arena’s inventive execs throughout imaging, design, pictures, video, representation, and 3-d.
We additionally see expanding call for from the following technology of creators who’re in search of freemium internet and cellular programs as they start their inventive trips. To raised serve those customers, we introduced a brand new Photoshop cellular app and an expanded internet enjoy, handing over Photoshop’s iconic symbol enhancing and design features at the iPhone. The cellular app and all new internet enjoy also are integrated in present Photoshop plans, providing established Photoshop shoppers a versatile ecosystem to create and edit throughout surfaces. The release garnered over 30 million social engagements in simply two weeks.
The discharge of the Adobe FireFly video type in February, a commercially protected generative AI video type, has been very definitely gained via manufacturers and inventive execs who’ve already began the usage of it to create production-ready content material. Customers can generate video clips from a textual content steered or symbol, use digicam angles to regulate photographs, create distinct scenes with 3-d sketches, craft atmospheric components, and expand customized movement design components. We are overjoyed to look inventive execs and enterprises and businesses, together with Dentsu, PepsiCo, and Stagwell discovering good fortune with the video type. Moreover, we not too long ago introduced an all-new Firefly utility, probably the most complete vacation spot to generate photographs, vectors, and now movies with unrivaled inventive regulate and direct integration with our industry-leading inventive apps to seamlessly transfer from ideation to manufacturing.
Along with producing photographs, movies, and designs from textual content, the app allows you to generate movies from keyframes, use 3-d designs to exactly direct generations, and translate audio and video into more than one languages. We additionally introduced two new plans as a part of this free up, Firefly Usual and Firefly Professional and started the rollout of our 1/3 plan, Firefly Top class the day gone by. Consumer engagement has been sturdy with over 90% of paid customers producing movies. The release of Photoshop on internet and cellular and the discharge of the brand new Firefly utility expands our rising circle of relatives of internet and cellular merchandise, which now contains Photoshop for inventive imaging, Lightroom for pictures, Categorical for Design, and Firefly for ideation and early manufacturing.
Those apps function value-added features to our current paid subscribers and as a frictionless freemium onboarding enjoy to draw and monetize next-generation creators. We are extremely joyful with the early hobby in those new choices. Different inventive skilled and author highlights come with, persisted sturdy adoption of GenAI in our merchandise with Photoshop GenAI per thirty days energetic customers at roughly 35% and Lightroom GenAI per thirty days energetic customers at 30%. Customers have generated over 20 billion property with Firefly.
The advent of latest options in Premier Professional beta and After Results beta are serving to editors and movement designers keep forward of points in time with AI options like Media Intelligence, which is helping customers in finding photos sooner the usage of herbal language and caption translation for 17 languages, which without problems enlarge video to world audiences. We are commemorated to look visionary filmmakers around the globe telling the season’s maximum acclaimed tales the usage of Adobe Inventive programs, together with Academy Award winners, Anora and Dune: Phase Two. The release of Adaptive profiles and distraction removing in Adobe Lightroom and Adobe Digital camera uncooked, which diminished tedious and repetitive duties. Max Japan introduced our group in combination and served as a possibility for us to release quite a lot of new inventions, together with efficiency enhancements in Adobe Illustrator, which boost up options like pan and zoom and loading huge information as much as 10x sooner.
We had every other nice quarter within the undertaking with extra shoppers turning to Firefly Products and services and customized fashions to scale on-brand content material manufacturing for advertising and marketing use circumstances, together with main manufacturers reminiscent of Deloitte Virtual, IBM, IPG Well being, Mattel, and Tapestry. Tapestry, for instance, has applied a brand new and extremely productive virtual dual workflow the usage of customized fashions in Firefly. You’ll be able to pay attention extra on how the combo of creativity and advertising and marketing is powering personalization at scale and enterprises. Adobe is amazingly neatly set as much as make the most of AI throughout creativity.
We are swiftly handing over adapted inventions to serve the total continuum of content material introduction for trade execs and shoppers, inventive execs and creators, and advertising and marketing execs. Our increasing breadth of choices is achieving a broader universe of shoppers, and our implausible go-to-market energy and confirmed data-driven running type are propelling the expansion of each flagship and new choices. We can be unveiling extra thrilling product features at Adobe Summit and MAXLondon in April. I’m going to now move it to Anil.
Anil S. Chakravarthy — President, Virtual Enjoy
Thank you, David. Hi, everybody. Enjoy Cloud had a powerful Q1, reaching earnings of $1.41 billion for the quarter. Subscription earnings within the quarter was once $1.3 billion, representing 11% year-over-year enlargement.
Our main answers spanning content material, information, and visitor trips allow enterprises around the globe to ship personalised reports at scale, serving to shoppers power each top-line enlargement and productiveness beneficial properties. In Q1, we delivered standard seasonal bookings and complicated our pipeline as undertaking shoppers initiated the execution in their essential 2025 priorities. Adobe Enjoy Platform and Apps play a pivotal function in enabling unified visitor reports. With the addition of AEP AI Assistant, we prolonged the worth and have an effect on of Enjoy platform via empowering extra purposes around the trade with conversational interfaces for information ingestion, perception technology, viewers segmentation, and enjoy supply.
We are now development on those advances and increasing AEP to allow clever orchestration of purchaser reports with AI brokers natively inbuilt. We are empowering shoppers to make higher use in their first-party information and to power extra related advert reports in keeping with direct visitor relationships. Our portfolio spans all the content material provide chain from introduction and manufacturing, workflow and making plans, asset control, supply, and activation thru to reporting and insights. Now we are bringing in combination creativity and advertising and marketing with AI to assist our shoppers notice the total doable of personalization at scale.
In the past, advertising and marketing execs were constrained via the collection of content material permutations they may be able to create and the collection of trips they may be able to deploy. With Adobe GenStudio, manufacturers around the world were running with Adobe to carry inventive and advertising and marketing groups nearer in combination, simplify their introduction to activation procedure, and release new ranges of creativity, insights, and potency in advertising and marketing campaigns. Different highlights come with, sturdy call for for Adobe Enjoy Platform and local programs with Q1 subscription earnings rising just about 50% yr on yr; of real-time CDP collaboration, handing over a protected atmosphere for advertisers and publishers to collectively uncover, turn on, 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 immediately with publishers, together with NBC Common and Warner Bros. Discovery. Advertisers and businesses, together with Alterra Mountain Corporate, WaveMaker, Primary League Baseball, and the Coca-Cola Corporate piloted the technique to ship personalised and function commercials. Release of the AEM Cloud Carrier accelerator with Publicis Sapient, which will scale back the exertions price of migration as much as 35%.
Trade analyst popularity in main analyst stories, together with the Gartner Magic Quadrant for Virtual Enjoy Platforms and Gartner Magic Quadrant for Personalization Engines. Robust call for for Firefly Products and services and customized fashions as a part of the GenStudio resolution with over 1,400 customized fashions since release. GenStudio for efficiency advertising and marketing wins at main manufacturers, together with AT&T, Lennar, Lenovo, Lumen, Nebraska Furnishings Mart, Pink Hat, Thai Airlines, and Phoenix. Robust partnership momentum with GenStudio for Efficiency Advertising and marketing supporting advert introduction and activation for Google, Meta, Microsoft Advertisements, Snap and a number of 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 shoppers with Adobe GenStudio Dentsu Plus. Key world visitor wins, together with Delta Airways, Ford, IBM, Microsoft, PNC Monetary Products and services, and Tyson Meals. Those visitor wins deal with the continuing evolution of the necessities of world manufacturers for an built-in workflow spanning creativity and advertising and marketing. This good fortune is pushed via product integration and innovation throughout Inventive Cloud and Enjoy Cloud more and more delivered thru Adobe GenStudio.
Our One Adobe undertaking go-to-market engine permits shoppers to ship personalised and on-brand content material at scale. The combo of our built-in undertaking answers throughout creativity and advertising and marketing is a novel energy for Adobe. Subsequent week, we’re excited to host Adobe Summit, our flagship Virtual Enjoy Convention in Las Vegas, the place we will be joined via hundreds of shoppers, companions, and builders from around the globe. We can percentage our imaginative and prescient for a way manufacturers can follow the facility of generative AI and agentic era to reach personalization at scale, and look ahead to highlighting quite a lot of product inventions.
I’m going to now move it to Dan.
Daniel J. Durn — Government Vice President, Leader Monetary Officer
Thank you, Anil. Adobe’s trade has grown over the past decade via handing over world-class merchandise grouped inside 3 clouds: Inventive Cloud, Record Cloud, and Enjoy Cloud. In parallel, now we have persisted to enlarge throughout cloud choices to raised serve other visitor teams. Examples come with Acrobat, which is mirrored in Inventive Cloud and Record Cloud; GenStudio, which contains Inventive Cloud, Categorical, Firefly Products and services, and Enjoy Cloud.
Enterprises who wish to interact with One Adobe in blended inventive seats with advertising and marketing automation. And more and more, Acrobat, and Categorical. We consider Adobe’s good fortune can be pushed via innovation in carrier of each trade execs and shoppers and inventive and advertising and marketing execs. Reporting insights and the monetary efficiency throughout those visitor teams will supply a transparent view of Adobe’s execution in opposition to our technique.
We can, due to this fact, supply total Adobe earnings, virtual media and virtual enjoy section earnings; virtual enjoy subscription earnings and virtual media finishing ARR in combination reasonably than via cloud, in addition to subscription earnings for trade execs and shoppers and inventive and advertising and marketing execs. Subscription earnings equipped will basically come with earnings from SaaS, controlled products and services, and time period choices. Trade execs and shoppers staff will encompass all subscription earnings from Record Cloud, Acrobat subscription earnings in Inventive Cloud and Adobe Categorical subscription earnings in Inventive Cloud, all of which can be part of virtual media. Inventive and advertising and marketing execs staff will encompass all subscription earnings from virtual enjoy, in addition to the entire ultimate subscription earnings from Inventive Cloud in virtual media.
In these days’s name, I’m going to quilt 3 primary spaces: our Q1 FY ’25 effects specializing in key enlargement drivers, monetary objectives, and our supplemental disclosures. Now turning to the quarter. Within the first quarter of FY ’25, Adobe accomplished earnings of $5.71 billion, which represents 10% year-over-year enlargement or 11% in consistent forex. GAAP diluted profits in keeping with percentage in Q1 was once $4.14 and non-GAAP diluted profits in keeping with percentage was once $5.08.
Q1 trade and fiscal highlights integrated, virtual media earnings of $4.23 billion, virtual media finishing ARR of $17.63 billion, rising 12.6% yr over yr. Virtual enjoy earnings of $1.41 billion, money flows from operations of $2.48 billion. And exiting the quarter, ultimate efficiency tasks have been $19.69 billion, rising 12% yr over yr, and CRPO rising 11%. In our virtual media section, we accomplished Q1 earnings of $4.23 billion, which represents 11% year-over-year enlargement or 12% in consistent forex.
We exited the quarter with $17.63 billion of virtual media ARR, rising our finishing ARR ebook of commercial 12.6% yr over yr in consistent forex. First quarter virtual media enlargement drivers integrated: sturdy enlargement for Acrobat throughout all routes to marketplace and geographies; Acrobat internet and cellular enlargement pushed via freemium funnel and app retailer optimizations; enlargement in Adobe Categorical, fueled via top-of-funnel enhancements, PLG trips throughout Acrobat and Categorical and B2B visitor onboarding. Power in person adoption and engagement of Acrobat AI Assistant pushed via enlargement of options, together with enhance for added languages and contract intelligence features. Enlargement of inventive flagship choices pushed via all apps, inventory, imaging and pictures.
Persevered momentum in inventive internet and cellular choices with 35% yr over yr finishing paid subscription enlargement, and robust momentum within the undertaking, pushed via Firefly Products and services and the ongoing have the benefit of the upsell movement of generative AI-enabled choices. Turning to our virtual enjoy section. In Q1, we accomplished earnings of $1.41 billion, which represents 10% year-over-year enlargement as reported and in consistent forex. Virtual enjoy subscription earnings was once $1.30 billion, rising 11% yr over yr as reported and in consistent forex.
First quarter virtual enjoy enlargement drivers integrated: momentum for product choices throughout content material, information and trips; AEP and app subscription earnings rising just about 50% yr on yr. GenStudio Answers surpassing $1 billion in finishing ARR ebook of commercial, early momentum in GenStudio for Efficiency Advertising and marketing and adoption and pipeline and enhancements in total undertaking retention. Turning now to our visitor staff efficiency. Inventive and advertising and marketing execs staff subscription earnings was once $3.92 billion, which represents 10% year-over-year enlargement as reported.
Trade execs and shoppers staff subscription earnings was once $1.53 billion, which represents 15% year-over-year enlargement as reported. Adobe’s efficient tax charge in Q1 was once 17% on a GAAP foundation and 18.5% on a non-GAAP foundation. RPO exiting the quarter was once $19.69 billion, rising 12% yr over yr or 13% in consistent forex, and CRPO rising 11% yr over yr or 12% in consistent forex. Our money flows from operations within the quarter have been a Q1 report $2.48 billion, and finishing money and temporary funding place exiting Q1 was once $7.44 billion.
In Q1, we entered into percentage repurchase agreements totaling $3.25 billion, and we lately have $14.4 billion ultimate of our $25 billion authorization granted in March 2024. Let me now flip to our Q2 FY ’25 monetary objectives. For Q2 FY ’25, we are focused on: overall Adobe earnings of $5.77 billion to $5.82 billion; virtual media section earnings of $4.27 billion to $4.30 billion; virtual enjoy section earnings of $1.43 billion to $1.45 billion; virtual enjoy subscription earnings of $1.315 billion to $1.325 billion; GAAP profits in keeping with percentage of $3.80 to $3.85; and non-GAAP profits in keeping with percentage of $4.95 to $5. For Q2, we think non-GAAP running margin of roughly 45% and a non-GAAP tax charge of roughly 18.5%.
The yr is off to a excellent get started and assuming present macroeconomic stipulations, I am happy to reaffirm our complete yr steerage for fiscal yr 2025. This quarter’s sturdy efficiency displays Adobe’s long-standing center of attention on innovation and assembly the rising wishes of our wide visitor base. As companies more and more prioritize virtual transformation, we are uniquely located to ship price thru our extremely differentiated answers and confirmed go-to-market execution to unharness the facility of creativity. Having a look forward, we are eager about the alternatives to power enlargement for our shoppers as we proceed to form the long run within the generation of AI.
We look ahead to seeing you subsequent week at our investor assembly at Summit 2025. Thanks, and we will now take questions. Operator?
Questions & Solutions:
Operator
Thanks. [Operator instructions] The primary query will come from Brent Thill with Jefferies.
Brent Thill — Analyst
Excellent afternoon. Shantanu, in case you took the AI ebook of commercial, it might be low single-digit % of your overall earnings for the yr. I assume many are asking, when does this turn out to be extra subject matter? How lengthy does it take? What is needed? Perhaps simply assist us stroll during the AI adventure and the way that interprets to earnings.
Shantanu Narayen — Chairman and Leader Government Officer
Satisfied to, Brent. If you’re taking a step again and give it some thought, now we have all the time talked concerning the AI adventure as 3 portions. The primary is making sure that we innovate. The second one is all about monitoring utilization and making sure price and monetization.
And I might say we are in point of fact happy throughout all 3 of the ones trips as now we have had conversations with you other people as neatly prior to now. An important quantity of the AI monetization may be going down relating to attracting other people to our subscription, ensuring they’re retained and having them power higher-value value SKUs. So, when anyone buys Inventive Cloud or when anyone buys Record Cloud, in impact, they’re in fact monetizing AI. However along with that, Brent, what we needed to do was once come up with a taste for the brand new stand-alone merchandise that we have got when now we have mentioned introducing Acrobat AI Assistant and rolling that out in several languages, Firefly, and ensuring that we have got a brand new subscription type related to that on the internet, Firefly Products and services for the undertaking and GenStudio.
So, the $125 million ebook of commercial that we mentioned exiting Q1 most effective pertains to that new ebook of commercial. And that’s the reason, once more, stuff that we mentioned we’d double. However I believe relating to the have an effect on additionally at the total trade, that has had a subject matter phase. However in case you play this out just a little bit extra and also you discuss what traders can be expecting, I believe with the brand new Firefly app that is pop out, this can be a internet product with a brand new subscription, skill to have the video type, skill to have ideation as a part of it.
Call to mind it as then integrating Photoshop internet, Categorical internet, and the entire different merchandise, all of that also is upside. And you’ll be able to see much more innovation in that house and you’ll be able to see much more monetization in that house. And once more, the very last thing I’m going to most likely say, Brent, is that the entire thought was once to begin to tee it up, and however on the FA assembly, to proceed to enlarge on how this is. However net-net, I might say, whether or not it is innovation, having our personal fashions, integrating it throughout all of our merchandise, model new earnings streams like GenStudio within the undertaking after which utilization and monetization, I think in point of fact excellent about it.
Brent Thill — Analyst
Nice. Thank you, Shantanu.
Operator
And the following query will come from Brent Bracelin with Piper Sandler.
Brent Bracelin — Analyst
Hello, thank you for taking the query. Excellent afternoon. I sought after to double-click into the call for linearity you noticed within the quarter. I recognize the statement reaffirming 11% virtual media ARR enlargement information for the total yr.
However may you supply extra coloration on tendencies you noticed within the quarter throughout Inventive and Record Cloud right here? Thank you.
David Wadhwani — President, Virtual Media
Yeah, satisfied to do this. So, once more, simply virtual media ARR was once a 12.6% enlargement, which is in step with our expectation and in addition the combination was once in step with our expectancies. If you’re taking a step again and also you have a look at the call for and type of the way in which the trade performed out this quarter, it is in line with what now we have noticed traditionally, and now we have noticed type of a broad-based call for for the goods with a couple of highlights that I believe are price calling out. To begin with, because it involves trade execs and shoppers, that is clearly an enormous marketplace with billions of customers that we are going after.
And our technique here’s to in point of fact make certain that productiveness that we ship an answer for productiveness from intake all of the solution to introduction and that is the reason in point of fact what we are doing with Acrobat and Categorical. We noticed a large number of momentum in those companies. We mentioned how Acrobat is up 23% yr over yr relating to per thirty days energetic customers. We are seeing more potent conversion on the ones customers, and that is the reason been serving to power the trade.
AI Assistant, clearly, we offered that ultimate yr, continues to do rather well and it is indubitably serving to with that technique of sooner intake and conversational reports. We noticed 2x quarter-over-quarter utilization enlargement in AI Assistant. And naturally, in that context, Categorical has been a perfect product. The product presently is solely — it is a terrific product to make use of.
And so, that still, now we have been making an investment in very considerably. From a advertising and marketing viewpoint but additionally from a partnership viewpoint, now we have doubled the spouse ecosystem within the ultimate yr. It now contains new names like Miro and Field and Webflow and HubSpot. Now we have 85% extra get entry to — 85% year-over-year enlargement in scholars with get entry to to it.
We have now been ramping up our scholar and campus ambassador techniques. We added 6,000 new small, medium companies to the Categorical product as neatly. Or even inside Acrobat, the place now we have been doing extra — we are seeing a lot more call for. We noticed a 10x year-over-year engagement of Categorical features from Acrobat customers.
So, feeling in point of fact excellent about that viewers staff. At the Inventive professional and author aspect, Shantanu discussed this already, however the advent of the Firefly video type being utilized by PNC and Pepsi and Dentsu and PepsiCo and Stagwell, Firefly new choices from Usual to Professional. And simply the day gone by, we offered Top class, which is a miles greater set of generative credit and all of the ones constitute new monetization fashions. We offered Photoshop cellular and internet.
We noticed loads of articles, 30 million social engagements. We have been simply indexed because the targeted app at the App Retailer over the weekend. We noticed some nice new advances for AI entering Lightroom internet and cellular. Premier additionally noticed some nice advances relating to AI.
So, plenty of momentum in that trade. And what is in point of fact thrilling is that as now we have performed all of this innovation, as Shantanu was once speaking about, we even have 3 giant milestones arising with Summit subsequent week then NAB in a while after that, then MAXLondon in a while after that. And that is beginning to display up. Clearly, now we have mentioned technology as we crossed 20 billion generations.
We are doing greater than 1 billion generations now a month and 90% of other people the usage of Firefly the app additionally noticed — are producing video, in addition to a part of that. However we additionally noticed a powerful enlargement within the undertaking. I have no idea, Anil, if you wish to upload one thing.
Anil S. Chakravarthy — President, Virtual Enjoy
Yeah, precisely. To only echo what you have been pronouncing, I believe within the undertaking, we see a large number of call for for creativity and advertising and marketing and AI coming in combination. Each and every CMO that we communicate to, each and every company that we paintings with, they are all very considering how generative AI can be utilized to become how the content material provide chain works. And with the GenStudio providing, which mixes the creativity and the promoting and the AI, now we have noticed super traction and we noticed quite a lot of each visitor wins, in addition to quite a lot of company companions, and we look ahead to unveiling much more of this at Summit.
David Wadhwani — President, Virtual Media
So, off to a perfect get started, I believe, with innovation, new choices and you’ll be expecting to look new choices and friends within the months forward.
Brent Bracelin — Analyst
Useful. Look ahead to chatting with you subsequent week. Thank you.
Operator
And the following query will come from Keith Weiss with Morgan Stanley.
Keith Weiss — Analyst
Superb. Thanks guys for taking the query And thanks for the extra disclosure. I believe it is a in point of fact attention-grabbing view roughly breaking down the inventive and advertising and marketing execs as opposed to the trade execs and client staff. And roughly following on that ultimate query, right kind me if I am flawed, but it surely feels roughly bullish to me that the trade execs and client staff has a more potent enlargement charge, inventive at 15% inventive, and advertising and marketing execs just a little bit in the back of as it looks like trade execs and client staff, the ones merchandise can be sooner gross sales cycle, specifically at the client aspect of the equation, sooner adoption.
The inventive and advertising and marketing execs, this broader resolution that you are looking to promote would have an extended gross sales cycle. So, the query is, am I eager about that proper? And are you seeing any indications that, that inventive and advertising and marketing skilled staff, whether or not it is to your pipeline or type of the process you are seeing, may that meet up with what we are seeing from the trade execs and client staff?
Shantanu Narayen — Chairman and Leader Government Officer
Neatly, Keith, I imply, a part of our function was once in point of fact to begin to supply perception into via the client teams, how we are beginning to see it. And to some extent, when individuals are questioning how we’re in fact using inventive, and the truth is that whilst you consider the GenStudio set of goods, which we now mentioned is a $1 billion ebook of commercial, AEP and Apps may be a $1 billion ebook of commercial and the inventive skilled, that is in fact addressing all the content material provide chain. And so, relating to that enlargement charge, as we upload new subscriptions just like the Firefly app subscription, upload extra video, upload extra capability in what we’re doing with GenStudio, that enlargement charge as neatly, it is a very huge untapped alternative and other people were asking us questions concerning the energy of the inventive marketplace, in addition to the energy of that marketplace inside the undertaking. And we predict that is a big TAM, we will percentage extra.
So, I believe you are pondering of it proper, which is to mention the $5 billion ebook of commercial that we constructed for virtual advertising and marketing, that is in point of fact serving to the content material and the inventive economic system. And so, that was once the theory in the back of supplying you with a window into that. And the metrics related to which are subscription and other sorts of choices. At the different aspect of the equation as neatly, in your level, what we needed to do is replicate the truth that the investments that we made in each Acrobat and Categorical proceeding to verify distribution after we consider the per thirty days reasonable customers.
If you’re taking it in combination, I imply, Adobe has loads of thousands and thousands of people who find themselves the usage of per thirty days — are the usage of our merchandise. And that can be in point of fact the early metrics and the indications of ways Categorical and Acrobat keep growing. So, I am happy that you simply discovered the extra disclosure really helpful. And that was once the theory.
And to Brent’s previous query as neatly, I simply sought after to elucidate. I imply, we aren’t taking the entire earnings that we see in virtual media and virtual enjoy and calling that AI earnings. However relative to what I have noticed from another corporate in our specific house, now we have in fact been happy via how a lot of it, whether or not it is further tiers of AI within the virtual enjoy, so what we’re seeing throughout Acrobat, in addition to the inventive skilled house, there is been excellent adoption of AI in that. And so, that was once the opposite intent, to begin to display that in order that we will discuss it extra on the FA assembly.
Keith Weiss — Analyst
Exceptional. Can I sneak one ultimate one in for Mr. Durn? It is nice to look you guys make the most of the pullback within the inventory value via accelerating the percentage repurchase which picked up this quarter. May just this tempo of percentage repurchases, are you able to guys maintain this all over the yr, or is that extra of a one-time pickup?
Daniel J. Durn — Government Vice President, Leader Monetary Officer
Yeah. So, if I take a step again, Keith, and also you consider the ultimate 4 quarters, now we have repurchased nearly $11 billion. And now we have all the time mentioned if there is alternatives to be opportunistic alongside the way in which, we’d make the most of it. And I believe that is what you noticed play out in Q1.
We have now were given a powerful perspective concerning the monetary profile all over the process the yr. Satisfied to reaffirm steerage, however we are going to power that with sturdy running margins, sturdy money float supply, and be sturdy capital allocators all over the yr. So, we be ok with the place we sit down. And if there is alternatives to be opportunistic, we can.
Shantanu Narayen — Chairman and Leader Government Officer
Keith, it is surely a vote of self assurance that we really feel in what we’re seeing because the alternatives forward people.
Keith Weiss — Analyst
Yeah. It is nice to look you guys placing your cash the place your mouth is via accelerating that percentage repurchase. It surely is helping.
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 the entirety that is going with it. Shantanu, query for you.
While you pivoted the corporate to a brand new trade type thru cloud, to begin with, there was once a large number of skepticism. Then you definately proved to us that the TAM was once in fact greater within the new inventive meets the cloud cycle. And the corporate was once in a position to boost up during the transition and submit even higher margins and via increasing the TAM essentially. So, as you have a look at AI presently, presently, one bearish argument that one may make, which I do not subscribe to, is that you are taking part in protection and that AI is a value of staying in trade and preserving your self related in your inventive base.
However how do you glance, since you might have been thru this one giant shift prior to, you have got a large number of enjoy, the place is your conviction on how really incremental AI will also be to your enlargement? May just you be at a an identical juncture the place you are poised to get into the following cycle is in fact larger TAM, to not put phrases to your mouth, however even perhaps dare I say the possible to boost up off of the nice enlargement that now we have noticed up to now? Thanks such a lot.
Shantanu Narayen — Chairman and Leader Government Officer
Neatly, Kash, what I recognize concerning the query is, that is what we needed to in point of fact tee up in entrance of the FA assembly. However certainly, as David described, the chance for the trade skilled and shoppers, I believe you’ll be able to begin to see and we will percentage extra on the FA assembly that there are billions of people who we will carry into the fold for creativity and productiveness and communicate extra about how we are, with the distribution that we have got and with the per thirty days reasonable customers that we have got, monetize that just like now we have monetized Acrobat. And we surely consider that it is a large, large alternative. I believe it is the identical factor throughout creators.
There are extra creators which are coming into. And once more, I’m going to preview just a little little bit of what David will percentage, which is whilst you consider the internet and cellular choices that we are offering to draw extra other people to our platform as inventive execs and next-generation creators, the quantity of people that wish to input that career is considerably greater than it is ever been. And so, with merchandise like Photoshop on internet and cellular, in addition to Firefly app, that is obviously the intent to turn how that as a subscription carrier and attracting the following technology creators can be a tailwind. After which whilst you put this in combination within the undertaking, I imply, confidently, what you additionally see as a part of the extra disclosures is that the undertaking has persisted to be a subject matter a part of our trade and subject matter a part of our enlargement as a result of they’re, with a purpose to do personalization at scale, as Anil is speaking about, there is going to be extra content material that is produced.
There is going to be extra content material that is in fact inserted into advert programs and social media. And so, once more, I believe environment the degree for a way that is a bigger alternative. However in case you have a look at it from now not simply the period of we have been advertising and marketing however have a look at the lens of, hello, that is a content material trade for us within the undertaking. We can once more define how this is most effective going to be a rising alternative.
So, no query in my thoughts, all 3 of those are in fact going to boost up relating to the TAM after which we need to innovate and execute in opposition to that. So, I’m extra eager about the bigger alternative certainly on account of AI. And now we have mentioned this, Kash. If you do not make the most of AI, it is a disruption.
In our specific case, the intent is obviously to turn how it is a tailwind.
Kash Rangan — Analyst
Superb. And one follow-up and really fast, promise if I will be able to. With the turbulence within the markets with industry wars, and many others., price lists, and many others., how do you are feeling your visitor base goes to act? Is the entirety going to be on target from what you’ll inform via speaking in your shoppers? Or are they roughly confused via what is going on and pausing? Thanks such a lot and that is the reason it for me.
Shantanu Narayen — Chairman and Leader Government Officer
Neatly, I imply, I believe we simply type of mentioned, assuming present macroeconomic stipulations, I imply, we have now a various trade. We are off to a excellent get started within the conversations that we’re having. And all people have conversations with all of our different friends. And I believe we have now a seasoned control crew that may navigate it.
However shoppers, I believe we are all collectively looking to perceive what occurs within the economic system. However the price lists, and many others., do not in point of fact have an effect on Adobe the way in which they have an effect on different companies. And so, we’re positive.
Kash Rangan — Analyst
Thanks such a lot.
Shantanu Narayen — Chairman and Leader 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 coloration on why you are converting the categorization of earnings, doing away with the ancient Record Cloud and Inventive Cloud? Is that this pushed via the One Adobe gross sales movement? Is Categorical now offered predominantly with Record Cloud? How must we consider the drivers? Thanks.
Daniel J. Durn — Government Vice President, Leader Monetary Officer
Yeah, so thank you for the query, Mark. As we laid it out, we mentioned more and more using cross-cloud choices. We are already doing it these days. We are going to be doing extra of it going ahead.
And as you have a look at people more and more purchasing choices, as you have a look at enterprises more and more purchasing answers and bringing other portions of our portfolio in combination to satisfy their absolute best price wishes round those two groupings of the purchasers, it in point of fact is supposed to simply draw a spotlight to our technique and the way we are executing in opposition to that technique. On a go-forward foundation, our good fortune goes to be pushed via the way in which we innovate into the intersection of productiveness and creativity, into the intersection of creativity and advertising and marketing. And the ones intersections are highlighted via those two groupings of shoppers. And so, the intent round that is to in point of fact carry to existence how we are using our technique, how we are executing in opposition to it supplies the most productive perception in how the corporate is functioning on a go-forward foundation.
Shantanu Narayen — Chairman and Leader Government Officer
And Mark, a minimum of two particular issues that now we have heard as comments from all of you other people are, you remember the fact that there is an Acrobat inside the Inventive Cloud and Record Cloud. This pulls out the trade with a purpose to display the momentum and the chance in that trade. And in your query about One Adobe, sure, I imply, the GenStudio resolution is, certainly, taking seats of goods like Photoshop or the Inventive Cloud, is including Categorical in it for each and every marketer in there. Now we have Firefly Products and services and customized fashions.
And so, the extra we promote that as one undertaking providing and we wish to boost up the sale of that as a strategic partnership, that is now additionally all mirrored in a type of earnings slices. So, we consider that the extra disclosure can even come up with extra visibility into routes to marketplace.
Mark Moerdler — Analyst
That makes a large number of sense. And one fast different one. Will have to we think the disclosure at the AI ARR one thing that we will be getting quarterly or periodically up to date? Thanks.
Shantanu Narayen — Chairman and Leader Government Officer
Periodically.
Operator
And the following query will come from Alex Zukin with Wolfe Analysis.
Alex Zukin — Analyst
Hiya, thank you guys for taking the query. And I will be able to sign up for the refrain of the ones commenting definitely on one of the vital new numbers, specifically the AI ebook of commercial. And that’s the reason the place I sought after to invite the query. Principally, glance, you are going to give us a bunch, we are going to ask for extra.
So, in that spirit, in case you have a look at the $125 million and also 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 the ones and perhaps stack rank the expansion charges which are going to get you to double that via the top of the yr? After which roughly in a similar way, in case you consider if that $125 million is impacting or the place the tailwinds are extra towards the inventive and advertising and marketing skilled or the trade execs?
David Wadhwani — President, Virtual Media
Yeah. Nice query, Alex. So, initially, in case you have a look at the combination of these items, AI Assistant has been round for approximately 3 quarters or 4 quarters now. Firefly Carrier has been round for approximately 4 quarters as neatly.
GenStudio was once offered past due in This fall of ultimate yr. So, that will provide you with just a little little bit of a way that the composition goes to type of like be in keeping with the tenure of those merchandise out there. But when we take a step again and also you have a look at the expansion trajectory, once more, we are speaking $195 million — sorry, $125 million doubling within the subsequent 9 months. It will provide you with a way of the dimensions of those companies and in point of fact the momentum that is within the trade.
And whilst you have a look at it, the core innovation that Shantanu mentioned resulted in a large number of usage. And now we are beginning to get to some degree the place we will 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 excellent get started. I do know there were some questions on how vital is commercially protection of the fashions.
They are essential. A large number of enterprises are turning to them for the standard, the breadth but additionally the industrial protection, the inventive regulate that we give them round with the ability to in point of fact fit construction, taste, set keyframes for actual video technology, 3-d to symbol, symbol to video. The inclusion additionally, on a highway map, and we will percentage extra about this subsequent week of third-party fashions in point of fact establishes us because the one-stop store for the rest you want to do with creativity. After which whilst you ladder that right into a Firefly stand-alone be offering with more than one tiers with Usual, Top class, and Professional, whilst you have a look at that built-in into Inventive Cloud, you must consider additional tiering there.
While you have a look at the paintings that we are doing along with Anil’s crew round GenStudio and ensuring all of those fashions and this complete platform, together with third-party fashions are uncovered inside our GenStudio be offering, what it is in point of fact doing is it is evolving clear of the dialog being concerning the type to the dialog being concerning the workflows and the combination and the appliance tier and the agent-based issues that we will be chatting with you extra about. And that in point of fact performs to our differentiation, our energy, and our audiences that we serve. And that’s the reason why you spot the bullishness of that $125 million doubling within the subsequent 9 months.
Shantanu Narayen — Chairman and Leader Government Officer
Yeah. I am happy that you simply in finding any such data helpful. I’m going to come up with just a little bit extra coloration as neatly on that. Be mindful, with Acrobat, we have now AI Assistant that is separate, so that is most effective the separate Acrobat AI Assistant.
So, the vast majority of that earnings is in fact Inventive as a result of as we will proceed to place the AI Assistant as a part of an Acrobat SKU. We might now not rely that if that got here as a part of an Acrobat Top class SKU. So, color-wise up to now, inventive in fact represents the vast majority of that. However as you understand, the Acrobat trade is doing nice.
Alex Zukin — Analyst
That is very, very useful. I assume perhaps simply to stick with alongside there. You might have noticed — or now we have noticed a large number of consolidation begin to occur inside the AI realm the place the type corporations or the agent even rising the agentic corporations. Perhaps simply remind us on how you are eager about your manner towards natural as opposed to inorganic innovation right here, given simply the plethora of capability that you are freeing around the board.
Shantanu Narayen — Chairman and Leader Government Officer
Because it pertains to the core inventive fashions, we can 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 many others., be expecting Firefly. We have now additionally signaled and now we have proven how we’d enhance third-party fashions related to that. And so, whether or not it is a customized type that we create for one in every of our undertaking shoppers, I believe in case you have a look at it, there were a few articles this week about how whether or not it is Estee Lauder, who’s going to be development their fashions constructed on ours and leveraging it or an organization like Publicis that is going to be taking those fashions. So, our core imaging video franchise, we will have our fashions because it pertains to textual content, we have now enhance for different third-party fashions.
And so, I believe it is a very sensible and it is the proper one, and we will enhance the entire inventive third-party fashions that individuals wish to enhance, whether or not it is a customized type we create for them or whether or not it is another third-party type inside Firefly as an app and inside Photoshop, you are going to see enhance for that as neatly. And so, call to mind it as we’re the way in which through which the ones fashions in fact ship price to a person. And so, it is in fact similar to we did with Photoshop plug-ins prior to now, you are going to see the ones fashions supported inside our flagship programs. Confidently, that will provide you with 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 if you’ll simply touch upon what you are sensing basically relating to promoting process and client spending tendencies within the wake of a few very uneven effects from more than one airways the ultimate a number of days and more than one shops. What’s supplying you with the resilience to reaffirm the FY ’25 steerage when a few of the ones are in point of fact massive sectors of the economic system they usually appear to be encountering some turbulence? I am simply questioning if there — you principally see them proceeding to create and marketplace and market it regardless of this atmosphere.
Shantanu Narayen — Chairman and Leader Government Officer
I believe on the finish of the day, Mark, we simply consider that virtual goes to proceed to be a basic a part of the economic system and the significance goes to proceed. I imply, there isn’t any unmarried corporate that I have talked to that does not say virtual. On your level, as different corporations view macroeconomic stipulations that can be specific to them, onuses on each and every corporate that is serving them with era to show how the era is helping, whether or not it is the peak line or the potency. However whether or not it is top-line enlargement or potency or each, they are now not going to head out of fashion because it pertains to any undertaking pronouncing, how can I exploit era to perform my targets?
Mark Murphy — Analyst
OK. I recognize that, Shantanu. As an overly fast follow-up on Alex’s query, with the ARR, the $125 million ARR doubling within the subsequent 9 months, do you assume it will be the similar composition, or is one thing going to be coming in from the video fashions that may alternate the combination there within the subsequent 9 months?
Shantanu Narayen — Chairman and Leader Government Officer
The video type is a part of the inventive Firefly app that can be a part of this. I believe a large number of those nice questions, Mark, I imply, on the FA assembly, we will try to give extra coloration, in addition to to what we’re seeing. However we needed to a minimum of begin to define what merchandise have been in there, the expansion charges that we think, and the way we are executing on, as I mentioned, the innovation, utilization, working out, and providing those as monetization. So, we will additionally, I do know, stay a observe of the continuing questions and deal with them on the FA assembly as neatly, Mark.
Mark Murphy — Analyst
OK, nice.
Operator
And our ultimate query will come from Saket Kalia with Barclays.
Saket Kalia — Analyst
Hiya, guys, thank you for taking my query right here and squeezing me in. I’m going to stay it to 1. David, perhaps for you. It is nice to look the Firefly app tiers that consumers can upload to their current subscriptions.
And perhaps to Shantanu’s level, this can be a higher subject for FA Day, however I am questioning if shall we simply discuss, how do you envision type of the possible connect charge there? I imply, Firefly is obviously an unparalleled providing so perhaps that is in point of fact difficult to reply to. However are there any merchandise that perhaps Adobe has noticed prior to now like Adobe Inventory or any others that you simply have a look at as type of a framework for what that adoption curve may appear to be?
David Wadhwani — President, Virtual Media
Yeah. I believe, so if we have a look — if you’re taking a step again, the rationale we are so eager about the Firefly app is in point of fact twofold. One is precisely the place you are going, Saket, and what you are asking about, which is the — with each and every dialog now we have had with inventive execs, we all know that anywhere they’re, they are beneath a huge quantity of power to supply extra. And this cohort of inventive execs, we see very sturdy connect and adoption of the generative AI options we put within the product partly as a result of they are neatly built-in and really discoverable and since they simply paintings and other people get a large number of price out of that.
So, what you are going to see is you’ll be able to begin to see us integrating those new features, those top rate features which are within the Firefly Usual, Professional, and Top class plans extra deeply into the inventive workflow so extra other people find a way to find them. And naturally, as a part of that, I believe you’ll be expecting to look what now we have performed all alongside is have a look at the place the utilization is, have a look at the place the thrill is, and ensure we get the pricing and the tiering proper in some way that maximizes the chance for our shoppers and maximizes the chance and the worth that Adobe and our shareholders get as a part of that, too. So, that can be a large house and a large alternative, and we see a large number of doable there as we glance forward. The opposite phase that I wish to ensure that does not get misplaced in that is how related this Firefly enjoy is for noncreative execs as neatly, this subsequent technology of creators that we stay speaking about.
And if we have a look at the early adoption charges of the Firefly paid plan, it in point of fact tells us either one of those tales. Now we have a excessive stage of conviction that it is including price and being utilized by inventive execs, however it is also proving to be a excellent onboarding alternative for next-generation professionals and creators usually. And that’s the reason the place Shantanu discussed previous, there’s an expanding alternative to merge our internet and cellular choices round now not simply the generative features however what you do with the content material you generate with Photoshop internet and cellular, Categorical internet and cellular. And you’ll consider different features coming round video as neatly.
So, we are eager about Firefly Products and services and the monetization features there in each instructions, new customers and in addition price and ARPU for our current base.
Shantanu Narayen — Chairman and Leader Government Officer
And Saket, since that was once the ultimate query, thanks. And perhaps simply in a snappy abstract, I imply, the 4 issues that I would go away you all with is Q1 was once a powerful get started. We have been happy with our efficiency. While you consider the addressable markets that we have got, as we consider how we serve the trade skilled and the shopper and the inventive skilled and the promoting skilled, we consider that, that is an immense alternative that is most effective going to develop on account of AI.
We are 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 those visitor teams in some way through which we satisfaction them. And we are beginning to define how the monetization can be other for every any such and appropriate for the client staff that we’re serving. We in point of fact proceed to consider that this may power enlargement 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 these days.
Operator
[Operator signoff]
Period: 0 mins
Name individuals:
Steve Day — Leader Monetary Officer and Senior Vice President, Virtual Enjoy
Shantanu Narayen — Chairman and Leader Government Officer
David Wadhwani — President, Virtual Media
Anil S. Chakravarthy — President, Virtual Enjoy
Daniel J. Durn — Government Vice President, Leader Monetary Officer
Brent Thill — Analyst
Brent Bracelin — Analyst
Anil Chakravarthy — President, Virtual Enjoy
Keith Weiss — Analyst
Dan Durn — Government Vice President, Leader Monetary Officer
Kash Rangan — Analyst
Mark Moerdler — Analyst
Alex Zukin — Analyst
Mark Murphy — Analyst
Saket Kalia — Analyst
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