About the Company

Adobe Systems Incorporated is a global software company headquartered in San Jose, California, recognized for its industry-leading digital media and marketing solutions. Founded in 1982, the company changed the graphic design industry with the introduction of Adobe Photoshop, an image editing tool that is still widely used today. Over the years, it has expanded its offerings to include a range of products such as Adobe Illustrator and Premiere Pro, and also provides cloud services through Creative Cloud. Adobe is also investing heavily in artificial intelligence (AI) and machine learning to improve its products and optimise workflows for creators and marketers, making a significant impact on the digital ecosystem.

New AI model in the Firefly family

The new Firefly Video is designed to generate videos from image and text instructions, putting Adobe among other tech giants such as OpenAI, ByteDance and Meta that offer similar technology. However, Adobe differentiates itself from rivals by using data to which it has legal rights, ensuring that the outputs are safe for commercial use, giving the firm a competitive advantage. This is still a test version, available only to a few customers on a waiting list, with no public release date yet known. According to Digital Media's Chief Technology Officer, Ely Greenfield, the focus when creating Firefly Video was on accessibility and practicality with features that match professional video editing techniques. This tool joins the Firefly Image, Vector and Design models that have also undergone a new update. The success of the existing models is evidenced by their use by companies such as Mattel, Deloitte, IBM and Gatorate, which owns Pepsi, as well as the more than 13 billion images generated. [1] [2]

Also new for Photoshop and Illustrator

The company has also listened to its customers and brought them a huge number of other innovations, including hundreds of new updates to Creative Cloud. Adobe Illustrator users can take advantage of Generative Shape Fill and Project Neo for 3D designs, for example, to save time and expand their creative options. Adobe has also offered several new features in Photoshop, including Generative Workspace, which provides a platform for brainstorming and coming up with ideas, and has also improved editing of 3D designs. The innovations are not limited to visual design, with Frame.io enabling the use of a wide range of media for video editing while integrating Canon, Nikon and Leica brands. Adobe has also strengthened its commitment to businesses, introducing GenStudio, a generative AI app that helps address the content supply chain, making it easier for brands to manage their personalized campaigns and activate them on platforms from Google, Meta, TikTok and others.[3]

Investing in a digital academy

Among the news shared at the event was the expansion of the Adobe Digital Academy, which aims to train 30 million people globally by the end of the decade. These, through various training, courses and programmes, would have the opportunity to gain a basic understanding of generative artificial intelligence and the associated content creation and digital marketing, enabling them to be more employable in today's job market. Adobe will allocate more than USD 100 million for scholarships or product certifications in collaborations with, for example, the Coursera learning platform, schools and other organisations. Another $250,000 will go towards digital marketing certifications. By partnering with General Assembly, it will offer training camps and career resources to students, further supporting their professional development.[4]

Positive feedback from investors and analysts alike

Adobe received an optimistic assessment of its innovations from analysts, believing that the Firefly Video tool could attract more users to premium products and boost sales of Premiere Pro.[5] Investors were equally impressed, with their shares rising 2.9% on the day of the event to close at $509.65, and extending gains by another 0.71% the next day before the market opened. Despite the company's news-making efforts, their stock has lost 9% year-over-year, but is in the green over the long term.* In terms of economic results, Adobe posted solid results in the third quarter of fiscal year 2024 (the period from June 1 to August 30, 2024). While its revenue grew by 11% to USD 5.41 billion, net profit reached USD 1.68 billion, an increase of 20%. Its largest revenue was from the digital media segment, which grew by 11%. Its estimates for the latest quarter call for revenue growth in the range of 5.5 billion to 5.55 billion.[6]

Adobe Systems Inc. stock price development over the past 5 years. (Source: Google Finance)*

Conclusion

The innovations from Adobe Systems, underscore its commitment to being a leader in the digital media industry through cutting-edge technology and user-centric solutions. Additionally, the expansion of the Digital Academy illustrates a proactive approach to workforce development, ensuring that individuals are equipped with the skills needed for the future job market. The positive reception from analysts and investors alike underscores confidence in the company's strategic direction and growth potential. As both the technological and digital worlds continue to change, it is crucial that the Californian firm is able to adapt and improve. [1]

Adam Austera, Principal Analyst at Ozios

* Past performance is no guarantee of future results.

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.

[1] https://www.investing.com/news/stock-market-news/adobe-starts-rollout-of-ai-video-tools-challenging-openai-and-meta-3661795

[2] https://news.adobe.com/news/2024/10/101424-adobe-launches-firefly-video-model

[3] https://news.adobe.com/news/2024/10/101424-adobe-puts-greater-power-possibility-in-hands-of-creators-teams-marketers

[4] https://www.investing.com/news/company-news/adobe-expands-digital-academy-with-a-global-ai-literacy-initiative-93CH-3661847

[5] https://www.investing.com/news/stock-market-news/heres-how-analysts-are-reacting-to-adobes-reveal-of-its-aipowered-video-tool-3662758

[6] https://finance.yahoo.com/news/adobe-reports-record-revenue-q3-200500938.html