Executive Summary

Q4 FY2024 delivered solid top-line and profitability: revenue $5.61B (+11% YoY), GAAP EPS $3.79, non-GAAP EPS $4.81; record operating cash flow $2.92B and RPO $19.96B .
Digital Media revenue grew 12% YoY to $4.15B, with net new Digital Media ARR of $578M (record), Document Cloud revenue up 17% YoY to $843M; Digital Experience revenue grew 10% YoY to $1.40B .
FY2025 guidance introduced: total revenue $23.30–$23.55B; GAAP EPS $15.80–$16.10; non-GAAP EPS $20.20–$20.50; non-GAAP operating margin ~46%; non-GAAP tax rate ~18.5%; Q1 FY2025 revenue $5.63–$5.68B; GAAP EPS $3.85–$3.90; non-GAAP EPS $4.95–$5.00 .
Call emphasized AI monetization catalysts (Firefly video model, tiered offerings, GenStudio, Acrobat AI Assistant) and cross-cloud integration; management highlighted FX headwinds (~$200M to FY2025 revenue) and ARR revaluation (-$117M) as known drags, not demand-related .

What Went Well and What Went Wrong

What Went Well

Record Q4 operating cash flow ($2.92B) and RPO ($19.96B), underscoring strong bookings and cash generation .
Document Cloud momentum: revenue $843M (+17% YoY), net new ARR $173M, ending ARR $3.48B; AI Assistant drove 4x faster task completion and doubled conversations QoQ, expanding web/mobile engagement and enterprise adoption .
AI platform progress and monetization: cumulative Firefly generations >16B; Firefly Services and GenStudio gaining enterprise traction; plan to introduce higher-priced Firefly tier (incl. video) to expand ARPU and monetization in FY2025 .

What Went Wrong

FX headwind and ARR revaluation: FY2025 revenue expected to face ~$200M FX drag; Digital Media ARR revalued -$117M entering FY2025 (from $17.33B to $17.22B), tempering reported growth optics despite underlying demand .
Investor concern on lack of visible acceleration vs AI narrative: management acknowledged questions on Digital Media ARR composition and emphasized shift to tiered offerings/new users/cross-sell to drive FY2025 growth (ending ARR guidance) .
Lease-related asset impairments ($100M non-GAAP adjustment) and ongoing non-GAAP adjustments (stock-based comp, intangibles) remained sizable; underscores importance of distinguishing GAAP vs non-GAAP profitability .

Financial Results

Consolidated Results (GAAP and Non-GAAP)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Billions)	$5.31	$5.41	$5.61
GAAP EPS ($)	$3.49	$3.76	$3.79
Non-GAAP EPS ($)	$4.48	$4.65	$4.81
GAAP Operating Income ($USD Billions)	$1.89	$1.99	$1.96
Non-GAAP Operating Income ($USD Billions)	$2.44	$2.52	$2.60
GAAP Net Income ($USD Billions)	$1.57	$1.68	$1.68
Operating Cash Flow ($USD Billions)	$1.94	$2.02	$2.92
Gross Margin (%)	88.7% (4.711/5.309)	89.8% (4.854/5.408)	89.0% (4.990/5.606)
GAAP Operating Margin (%)	35.5% (1.885/5.309)	36.8% (1.992/5.408)	34.9% (1.957/5.606)
Non-GAAP Operating Margin (%)	46.0% (2.441/5.309)	46.5% (2.515/5.408)	46.3% (2.596/5.606)

Segment Breakdown

Metric	Q2 2024	Q3 2024	Q4 2024
Digital Media Revenue ($USD Billions)	$3.91	$4.00	$4.15
Creative Revenue ($USD Billions)	$3.13	$3.19	$3.30
Document Cloud Revenue ($USD Billions)	$0.782	$0.807	$0.843
Digital Experience Revenue ($USD Billions)	$1.33	$1.35	$1.40
Digital Experience Subscription Revenue ($USD Billions)	$1.20	$1.23	$1.27

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024
Net New Digital Media ARR ($USD Millions)	$487	$504	$578
Digital Media Ending ARR ($USD Billions)	$16.25	$16.76	$17.33
Document Cloud Ending ARR ($USD Billions)	$3.15	$3.31	$3.48
Creative Ending ARR ($USD Billions)	$13.11	$13.45	$13.85
RPO ($USD Billions)	$17.86	$18.14	$19.96
Share Repurchases (Millions of Shares)	~4.6	~5.2	~4.6

Vs Guidance and Consensus

Metric	Q3 Guidance for Q4	Q4 Actual	Outcome
Total Revenue ($B)	$5.50–$5.55	$5.61	Bold beat vs guidance
GAAP EPS ($)	$3.58–$3.63	$3.79	Bold beat vs guidance
Non-GAAP EPS ($)	$4.63–$4.68	$4.81	Bold beat vs guidance
Digital Media Net New ARR ($M)	~$550	$578	Bold beat vs guidance
Digital Media Revenue ($B)	$4.09–$4.12	$4.15	Beat vs guidance
Digital Experience Revenue ($B)	$1.36–$1.38	$1.40	Beat vs guidance
Digital Experience Subscription Revenue ($B)	$1.23–$1.25	$1.27	Beat vs guidance

Note: Wall Street consensus estimates via S&P Global were unavailable at the time of query due to provider rate limits; therefore beat/miss vs consensus cannot be presented.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($B)	FY2025	N/A	$23.30–$23.55	New
Digital Media Revenue ($B)	FY2025	N/A	$17.25–$17.40	New
Digital Media Ending ARR Growth	FY2025	N/A	11.0% YoY	New
Digital Experience Revenue ($B)	FY2025	N/A	$5.80–$5.90	New
DX Subscription Revenue ($B)	FY2025	N/A	$5.375–$5.425	New
GAAP EPS ($)	FY2025	N/A	$15.80–$16.10	New
Non-GAAP EPS ($)	FY2025	N/A	$20.20–$20.50	New
Non-GAAP Operating Margin (%)	FY2025	N/A	~46%	New
Non-GAAP Tax Rate (%)	FY2025	N/A	~18.5%	New
Diluted Share Count (M)	FY2025	N/A	~433	New
Total Revenue ($B)	Q1 FY2025	N/A	$5.63–$5.68	New
DM Revenue ($B)	Q1 FY2025	N/A	$4.17–$4.20	New
DX Revenue ($B)	Q1 FY2025	N/A	$1.38–$1.40	New
DX Subscription Revenue ($B)	Q1 FY2025	N/A	$1.27–$1.29	New
GAAP EPS ($)	Q1 FY2025	N/A	$3.85–$3.90	New
Non-GAAP EPS ($)	Q1 FY2025	N/A	$4.95–$5.00	New
Non-GAAP Operating Margin (%)	Q1 FY2025	N/A	~47%	New
Non-GAAP Tax Rate (%)	Q1 FY2025	N/A	~18.5%	New

Notes: Management also flagged FX headwinds (~$200M FY2025 revenue) and Digital Media ARR revaluation (-$117M) entering FY2025 due to currency changes .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
AI/Technology Initiatives	Emphasized differentiated AI approach across clouds	“Groundbreaking advancements” in AI; record ARR and RPO	Firefly family expanded (image, vector, design, video); >16B generations; GenStudio integration; Acrobat AI Assistant scaling	Accelerating integration and monetization
Document Cloud Momentum	Revenue $782M (+19% YoY); ARR $3.15B	Revenue $807M (+18% YoY); ARR $3.31B	Revenue $843M (+17% YoY); net new ARR $173M; MAUs >650M (paid+free); AI Assistant 4x faster tasks; conversations doubled QoQ	Sustained high-teens growth; AI-driven engagement
Creative Cloud & Firefly Monetization	Raised annual targets; strong core apps growth	Creative revenue $3.19B (+10% YoY); net new Creative ARR $405M	Creative revenue $3.30B (+10% YoY); higher-priced Firefly tier planned (video models) to expand ARPU	Tiering/value-based pricing ramping
Cross-Cloud GenStudio	N/A	N/A	GenStudio for Performance Marketing GA; strong enterprise interest; largest bookings quarter ever; AEP/native apps book >$1B	Material cross-cloud pipeline build
Macro/Holiday Digital Demand	N/A	N/A	Record Black Friday ($10.8B) and Cyber Monday ($13.3B); holiday season expected $240.8B (+8.4% YoY)	Supportive end-market demand
Guidance Methodology & ARR Focus	FY2024 targets raised	Q4 targets set	Shift to guiding Digital Media ending ARR growth; focus on annual book of business vs quarterly profile	Methodology evolution
FX/ARR Revaluation	N/A	N/A	FY2025 FX headwind (~$200M revenue); ARR revaluation (-$117M) to $17.22B starting point	Known external headwinds

Management Commentary

“Adobe delivered record FY24 revenue…position us for a great year ahead.” — Shantanu Narayen, CEO .
“We introduced multiple generative AI models in the Adobe Firefly family…video…comprehensive generative AI models designed to be commercially safe.” — Shantanu Narayen .
“In Q4, we achieved net new Digital Media ARR of $578 million and revenue of $4.15 billion…AI Assistant…users completed their document-related tasks 4x faster.” — David Wadhwani, President Digital Media .
“We will soon introduce a new higher-priced Firefly offering that includes our video models…increase ARPU.” — David Wadhwani .
“The book of business for Adobe Experience Platform and native apps…surpassed $1 billion…GenStudio…strong customer demand.” — Anil Chakravarthy, President Digital Experience .
“GAAP diluted EPS in Q4 was $3.79 and non-GAAP diluted EPS was a record $4.81…expect ~$200 million headwind to FY’25 revenue as a result of FX.” — Dan Durn, CFO .

Q&A Highlights

AI monetization and tiering: management outlined higher-priced Firefly (video) tiers and deeper GenStudio integration; newer products are meaningful contributors in FY2024 with extrapolated momentum into FY2025 .
ARR growth composition and guidance: shift to ending ARR growth guidance; focus on new subscribers, cross-sell/upsell, and pricing segmentation as growth vectors rather than quarterly linearity .
Pricing sensitivity: balancing proliferation (freemium/web/mobile) vs short-term monetization; segmentation/tiering in core creative to align price with AI-driven value; enterprise value-based selling with automation/workflows .
Document Cloud durability: MAU growth across surfaces (web/mobile/extensions), strong Reader→Acrobat conversion, AI Assistant broadening to multi-document workflows and languages; viewed as durable growth driver .
Consumption monetization: video offering and Firefly Services in GenStudio expected to add to ARR via consumption-like tiers and premium pricing rather than per-generation tracking .
RPO trajectory: largest bookings quarter ever; premium tiers, AEP/apps scaling; management encouraged about continued business drive (no specific cRPO guidance) .

Estimates Context

S&P Global consensus estimates were unavailable at the time of query due to provider rate limits; as a result, beat/miss vs Wall Street consensus cannot be assessed in this recap. We present performance vs company guidance, where Adobe exceeded Q4 targets across revenue, EPS, net new ARR, and segment revenues .

Key Takeaways for Investors

Strong execution: Broad beats vs Q4 guidance across revenue, GAAP/non-GAAP EPS, Digital Media net new ARR, and segment revenues; record cash generation and RPO support durable growth into FY2025 .
AI monetization inflection: Firefly video model and planned higher-priced tiers, GenStudio enterprise adoption, and Acrobat AI Assistant scaling are set to be meaningful ARPU and ARR drivers in FY2025 .
Cross-cloud synergy: GenStudio aligns Creative, Express, and Experience Clouds; largest bookings quarter and AEP/native apps book >$1B suggest pipeline depth and enterprise momentum .
FX headwinds manageable: ~$200M revenue headwind and ARR revaluation (-$117M) are known external factors; underlying constant-currency growth and guidance still robust .
Focus on ending ARR: Methodology change centers investor attention on annual business health; expect growth driven by new users, cross-sell/upsell, and pricing/tiering rather than quarterly variability .
Document Cloud durability: High-teens growth, expanding web/mobile funnel, and AI Assistant value proposition support continued outperformance in productivity workloads .
Near-term catalysts: FY2025 guide, early FY2025 product launches (Firefly video), enterprise GenStudio deals and FX stabilization could drive estimate revisions and sentiment.

Additional Supporting Data

Balance Sheet and Cash Flow detail (Q4): GAAP diluted shares 443M; cash & equivalents $7.61B; short-term investments $0.27B; total debt $5.63B; cash from operations $2.92B .
Non-GAAP adjustments (Q4): stock-based comp $455M; intangibles amortization $84M; lease-related impairments $100M; tax adjustments -$176M; reconciling to non-GAAP net income $2.13B and non-GAAP EPS $4.81 .

ADOBE INC. (ADBE)·Q4 2024 Earnings Summary