Adobe Systems Incorporated reported its financial results for the second quarter of fiscal year 2025, with revenue totaling $5.87 billion, reflecting an 11% increase year-over-year. GAAP diluted earnings per share (EPS) stood at $3.94, while non-GAAP EPS was $5.06, marking a 13% year-over-year growth. The Digital Media segment generated $4.35 billion in revenue, also up 11% year-over-year, with annual recurring revenue (ARR) reaching $18.09 billion, signifying a growth of 12.1% compared to the previous year.

In the Digital Experience segment, the company reported revenue of $1.46 billion, equating to a 10% increase year-over-year. Subscription revenue within this segment amounted to $1.33 billion, which represented an 11% rise compared to the same quarter last year. Noteworthy metrics included cash flows from operations of $2.19 billion, a record for Q2, and remaining performance obligations (RPO) of $19.69 billion, growing at a rate of 10% year-over-year.

Adobe’s performance in its Business Professionals and Consumers Group saw subscription revenue of $1.60 billion, an increase of 15% year-over-year. The Creative and Marketing Professionals Group contributed $4.02 billion in subscription revenue, up 10% year-over-year.

Looking at guidance changes, Adobe has raised its revenue target for the fiscal year 2025 to a range of $23.50 billion to $23.60 billion, with the Digital Media segment projected to generate between $17.45 billion and $17.50 billion. The company anticipates a year-over-year growth rate of 11.0% for Digital Media’s ending ARR. Adobe also revised non-GAAP EPS guidance for the year to a range of $20.50 to $20.70.

For the upcoming third quarter, Adobe targets total revenue of $5.875 billion to $5.925 billion, with Digital Media segment revenue expected to fall between $4.37 billion and $4.40 billion. The Digital Experience segment revenue is projected to range from $1.45 billion to $1.47 billion, and subscription revenues there are anticipated to be between $1.35 billion and $1.36 billion. The company expects GAAP EPS in the range of $4.00 to $4.05, while non-GAAP EPS targets are set at $5.15 to $5.20.

Adobe’s commitment to investing in AI-driven innovations is reflected in its robust subscription growth across multiple user segments, with over 700 million monthly active users across its product offerings. In terms of profitability, the company’s operating income for the quarter was reported at $2.11 billion under GAAP and $2.67 billion on a non-GAAP basis. The effective tax rate for the quarter was 19.5% on a GAAP basis and 18.5% on a non-GAAP basis.

Overall, Adobe’s Q2 fiscal 2025 performance demonstrates consistent financial health, positioning the company for continued growth and enhanced shareholder value through strategic innovation and operational efficiency.