Adobe (ADBE) delivered a standout performance in the second quarter of fiscal 2025, reporting record-breaking results and raising its full-year revenue and EPS targets. Total revenue climbed to $5.87 billion, reflecting a 11% year-over-year increase, driven by broad-based growth across its business units and global markets.

In terms of profitability, GAAP net income rose 8% to $1.69 billion, while GAAP diluted EPS grew to $3.94, up from $3.49 a year earlier. On a non-GAAP basis, EPS reached $5.06, marking a 13% increase. Operating strength was evident with GAAP operating income at $2.11 billion and non-GAAP operating income at $2.67 billion, resulting in operating margins of 36% and 45.5%, respectively. Cash flow from operations hit $2.19 billion, a Q2 record, contributing to a robust $4.67 billion in the first half—buoyed in part by last year’s Figma deal termination fee. The company also returned capital to shareholders by repurchasing 8.6 million shares during the quarter.

Segment performance was strong across the board. Digital Media revenue reached $4.35 billion, up 11% YoY, with ARR rising to $18.09 billion, a 12.1% gain. Digital Experience revenue increased 10% to $1.46 billion, with subscription revenue up 11% to $1.33 billion. Together, subscriptions made up 96% of Adobe’s total revenue, totaling $5.64 billion. By customer group, Business Professionals & Consumers posted a 15% YoY jump in subscription revenue, while Creative & Marketing Professionals grew 10%.

Geographically, Adobe saw double-digit growth in all major regions. EMEA led with a 13% increase, followed by the Americas (+10%) and APAC (+9%), despite foreign currency headwinds trimming revenue by an estimated $24 million.

AI continues to be a major growth catalyst. Adobe’s suite of AI tools—including Acrobat AI Assistant, Firefly, and GenStudio—is driving both engagement and monetization. AI-influenced revenue is already in the billions, and direct AI ARR is expected to surpass $250 million by year-end. Firefly app usage surged, with subscriptions growing 30% quarter-over-quarter, and the number of AI generations surpassing 24 billion. Monthly active users across Acrobat and Express exceeded 700 million, with YoY growth exceeding 25%.

Enterprise demand remains robust, particularly for Firefly and the Adobe Experience Platform (AEP), the latter of which saw app subscription revenue soar over 40% YoY. GenStudio also gained traction with ARR up 25%.

Management emphasized the company’s strategic focus on transformative AI and product-led growth. CEO Shantanu Narayen highlighted the opportunity to scale creativity and productivity through AI, while segment leaders noted strong demand across both consumer and enterprise channels.

Reflecting this momentum, Adobe raised its FY25 outlook. The company now expects total revenue between $23.50 and $23.60 billion, GAAP EPS of $16.30–$16.50, and non-GAAP EPS of $20.50–$20.70. Q3 guidance also projects continued strength, with revenue of $5.875–$5.925 billion and non-GAAP EPS of $5.15–$5.20.

In summary, Adobe’s Q2 2025 results underscore its strong execution, expanding market leadership, and increasing returns from AI innovation. With continued investment in growth and efficiency, Adobe appears well-positioned for a strong finish to the fiscal year.