USA | Internet Equity Research June 24, 2025 Cannes 2025: Creative Disruption in the AI Era We tuned in remotely to the annual Cannes Lions Festival of Creativity, which brings together the top advertising & marketing leaders. We left encouraged by AI's ability to innovate ad formats & performance by streamlining creative production and campaign execution. We are bullish on META, GOOGL, & AMZN's position to benefit as advertisers & marketers embrace AI to reach broader audiences across more formats with the ...

作 者 | APAC Investment News 编译 | 华尔街大事件 在现代数字动态中，互联网日益由视觉驱动，大多数社交平台上的算法倾向于优先考虑图像、视 频和动态格式，而非纯文本，因为它们能够带来更高的参与度和留存率。TikTok、Instagram 和 YouTube 等平台的流行就是其中的一部分，也表明视觉内容创作已成为这些领域的战略必需 品。 Adobe( NASDAQ: ADBE )在这些更广泛的动态中显然表现出色，尤其因为它是唯一一家提供垂 直整合 AI 内容供应链的公司： 在这个领域中，没有任何其他平台能够像 Adobe 一样涵盖整个过程，为用户提供从创意火花到 基于精确规范的出色执行的完整渠道。 虽然这种全栈方法确实引人注目，但必须强调的是，它之所以如此有效，是因为 Adobe 创新地 将生成式 AI 融入其生态系统，从而能够生成高质量的图像和视频。与生成式 AI 出现之前的主流 方法相比，这两者都显著降低了视觉创作的成本和复杂性。 这让我们看到了 Adobe genAI 的明星——Firefly。 Firefly 本质上是驱动 Adobe 生成式 AI 未来的引擎，它已在诸多方面展现 ...

Software is ubiquitous and has become the focal point of technological innovation. Apart from running devices and applications, its usage has been extended to managing infrastructure. The Zacks Computer Software industry participants are well-positioned to benefit from the accelerated digital transformation drive across the globe. The shift to cloud and the rise of SaaS (Software-as-a-Service) models offers recurring revenue visibility for vendors and scalability for users.The industry growth is also being ...

Key Takeaways Adobe expanded its CXO platform with new AI tools to enhance automated, on-brand content deployment. Digital Experience revenues rose 10% to $1.46B in 2Q25, beating the consensus estimate by 1.56%. Subscription revenues climbed 11% to $1.33B, driven by the rising adoption of GenStudio and Firefly Services.Adobe (ADBE) continues to strengthen its enterprise focus through the Digital Experience segment, which combines creativity, data and AI to help brands deliver personalized and real-time en ...

Core Insights - Adobe reported second-quarter fiscal 2025 non-GAAP earnings of $5.06 per share, exceeding the Zacks Consensus Estimate by 2.02% and reflecting a year-over-year increase of 12.9% [1][9] - Total revenues reached $5.87 billion, surpassing the consensus mark by 1.50% and showing an 11% year-over-year growth on both reported and constant-currency bases [1][9] Revenue Breakdown - Subscription revenues amounted to $5.64 billion, accounting for 96% of total revenues, with an 11.5% year-over-year increase [2] - Product revenues were $88 million, representing 1.5% of total revenues, down 15.4% year over year [2] - Services and other revenues totaled $144 million, making up 2.5% of total revenues, a slight decline of 0.7% year over year [2] Segment Performance - The Digital Media segment generated revenues of $4.35 billion, which is 74% of total revenues, reflecting an 11% year-over-year increase [3] - Digital Experience revenues were $1.46 billion, accounting for 25% of total revenues, with a 10% year-over-year growth [3] - Publishing and Advertising revenues were $70 million, representing 1% of total revenues, in line with year-over-year performance [4] Subscription Revenue Details - The Business Professionals and Consumers group reported subscription revenue of $1.60 billion, indicating a 15% year-over-year growth [6] - The Creative and Marketing Professionals group generated subscription revenues of $4.02 billion, reflecting a 10% year-over-year growth [6] - Digital Media's annualized recurring revenues (ARR) reached $18.09 billion, representing a 12.1% year-over-year growth [7] Operating Performance - Adobe's non-GAAP gross margin for Q2 was 90%, expanding by 30 basis points year over year [11] - Operating expenses were $2.63 billion, up 12.4% year over year, with the adjusted operating margin contracting to 45.5% [11] Cash Flow and Balance Sheet - As of May 30, 2025, cash and short-term investments totaled $5.71 billion, down from $7.44 billion as of February 28, 2025 [12] - Long-term debt remained stable at $6.17 billion [12] - Cash generated from operations was $2.19 billion in the reported quarter, compared to $2.48 billion in the previous quarter [12] Future Guidance - For Q3 fiscal 2025, Adobe expects total revenues between $5.87 billion and $5.92 billion, with Digital Media revenues projected between $4.37 billion and $4.40 billion [13] - For fiscal 2025, total revenues are expected to be between $23.50 billion and $23.60 billion, with Digital Media revenues between $17.45 billion and $17.50 billion [14] - Adobe anticipates fiscal 2025 non-GAAP earnings between $20.50 and $20.70 [15]

Financial Data and Key Metrics Changes - Adobe achieved record revenue of $5,870,000,000, representing 11% year-over-year growth [5][34] - GAAP earnings per share for the quarter was $3.94, while non-GAAP earnings per share was $5.06, reflecting a 13% year-over-year growth [34] - Cash flows from operations reached a record $2,190,000,000 for Q2 [34] - Remaining performance obligations were $19,690,000,000, growing 10% year-over-year [38] Business Line Data and Key Metrics Changes - Digital Media revenue was $4,350,000,000, growing 12% year-over-year, with ending ARR of $18,090,000,000 [14][34] - Digital Experience revenue was $1,460,000,000, representing 10% year-over-year growth [36][25] - Subscription revenue for Digital Experience was $1,330,000,000, growing 11% year-over-year [25][36] - Subscription revenue for business professionals and consumers grew 15% year-over-year [37] Market Data and Key Metrics Changes - Monthly active users across Adobe's products exceeded 700,000,000, with a 25% year-over-year growth [17][8] - The adoption of Express capabilities within Acrobat saw an approximately 3x quarter-over-quarter increase [18] - The Firefly app attracted new users, with time subscribers growing 30% quarter-over-quarter [10][22] Company Strategy and Development Direction - Adobe's growth strategy focuses on delivering transformative innovation across diverse customer audiences, leveraging AI to enhance creativity and productivity [5][6] - The integration of creativity, marketing, and AI is central to Adobe's strategy, aiming to deliver customer experience orchestration [11][12] - Adobe is expanding its offerings to include comprehensive marketing technology platforms that integrate content, customer data, and profiles [12][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Adobe's ability to deliver strong shareholder value, driven by innovation and customer engagement [40][39] - The company raised its revenue targets for FY 2025, reflecting strong performance and momentum across its portfolio [39][34] - Management highlighted the importance of AI in driving exponential value in the creative economy [40] Other Important Information - Adobe's effective tax rate in Q2 was 19.5% on a GAAP basis and 18.5% on a non-GAAP basis [38] - The company entered into a share repurchase agreement totaling $3,500,000,000 [38] - Adobe is on pace to surpass $250,000,000 in AI Direct ARR by the end of FY 2025 [39] Q&A Session Summary Question: Can you discuss the integration of Acrobat and Express and how the pricing works? - Management noted that the integration allows users to access capabilities of both products seamlessly, enhancing the content creation process [43][45] Question: What is driving the increase in video content uploads on Adobe Stock? - Management emphasized the importance of respecting content creators and integrating Adobe Stock throughout its products to enhance content creation [48][50] Question: What is the initial reaction to the Creative Cloud Pro changes? - Management indicated positive initial feedback and highlighted the growing demand for content creation as a key driver for the changes [57][64] Question: How is Adobe approaching Gen AI usage versus monetization? - Management acknowledged that while AI usage is high, monetization is still in early stages, with significant opportunities ahead [70][71] Question: Can you comment on the competitive environment and the growth of Express? - Management highlighted the strong adoption of Express within businesses and its integration with other Adobe products as a competitive advantage [74][78]

Summary of Intuit's Conference Call Company Overview - **Company**: Intuit - **Key Product**: QuickBooks, which constitutes approximately 60% of the company's revenue [1][4] Core Industry Insights - **Industry**: Financial Software and Services - **Focus Areas**: Small to mid-market businesses, with a strategy to expand into larger enterprises [7][12] Key Points and Arguments Technology and Innovation - Intuit has transitioned to an AI-driven expert platform, enhancing its capabilities through cloud migration, automation, and DevOps practices [4][5] - The introduction of GenOS (Generative Operating System) allows developers to create and deploy generative AI experiences rapidly [4][5] Growth Strategy - The company aims to continue subscriber growth while focusing on increasing Average Revenue Per Customer (ARPC) [6][7] - Intuit is targeting mid-market customers, defined as businesses with annual revenues of $2.5 million or more, and plans to offer tailored solutions for different revenue segments [12][13] Product Development - QuickBooks Advanced and Intuit Enterprise Suite (IES) are key products aimed at mid-market and larger customers, respectively [12][13][15] - The company is focusing on enhancing features based on customer feedback, such as multi-entity support and project management tools [20][21] Market Penetration - Intuit has 7 million subscribers globally and sees opportunities for growth in the U.S. and international markets, particularly in the UK, Australia, and Canada [33][35] - The company is also leveraging Mailchimp to expand its services internationally, with 50% of Mailchimp subscribers located outside the U.S. [36] M&A Strategy - Intuit's recent acquisition of GoCo aims to enhance its human capital management offerings, particularly for mid-market customers [40][41] - The company is focusing on tuck-in acquisitions to fill gaps in its service offerings [41] Financial Services Growth - The money platform, which includes payments and bill pay, has seen a 40% year-to-date growth [46] - Bill pay has been enhanced to cater to high-volume billers, particularly in the mid-market segment [50] Mailchimp Performance - Intuit acknowledges challenges with Mailchimp's growth and is working to simplify the product for smaller businesses while enhancing features for mid-market clients [52][54] - New features such as SMS marketing and improved integration with QuickBooks are being developed [55][56] AI Integration - Intuit is implementing AI across its services, including the introduction of agents to automate various tasks [57][63] - The company plans to monetize AI features separately in the future, enhancing customer discovery and service usage [65] Internal AI Utilization - AI is being used internally to improve product development and customer service, with a focus on increasing efficiency across all departments [66][67] Additional Important Insights - Intuit is committed to understanding customer needs and adapting its offerings accordingly, emphasizing a customer-centric approach in product development and marketing strategies [24][25][53] - The company is focused on creating a seamless experience for customers by integrating various services and ensuring that they are tailored to specific industries [26][28]

Core Viewpoint - The article discusses the strong performance of Palantir Technologies due to advancements in artificial intelligence (AI) and highlights two other AI stocks, Salesforce and Adobe, that are expected to outperform Palantir in the near future [1][2][3]. Palantir Technologies - Palantir has seen a remarkable stock increase of 1,630% since December 2022, with a current market cap exceeding $300 billion [2]. - The company's financial results are strong, with a year-over-year revenue growth of 39% in the first quarter and an operating margin of 44% [6]. - Despite excellent operating results, Palantir's stock is considered overvalued, trading at more than 75 times the management's revenue outlook for 2025 and 175 times EBITDA expectations for the next 12 months [7][8]. Salesforce - Salesforce is enhancing its enterprise software solutions with AI through its Agentforce platform, which has generated around $100 million in annual recurring revenue shortly after launch [9][10]. - The company expects total sales to exceed $41 billion this year, with an operating margin of 34% [10]. - Salesforce stock trades at just 6 times management's revenue guidance, with a forward P/E ratio of 23, and analysts have a median price target of $355, indicating a potential 35% upside [13]. Adobe - Adobe has integrated AI innovations into its creative and marketing software, leading to increased pricing and customer acquisition [14][15]. - The company reported $125 million in annual recurring revenue directly from AI services, expecting this to double by year-end, and $3.5 billion in AI-influenced annual recurring revenue across its portfolio [16]. - Adobe stock trades for about 7 times management's estimate for 2025 revenue, with a forward P/E below 20, and analysts have a median price target of $477.50, suggesting a 19% upside [18][19].

Salesforce, Inc. (CRM) and Adobe Inc. (ADBE) are two well-established leaders in the cloud software space. Both companies help businesses improve customer engagement, boost productivity and support digital transformation. Adobe is better known for its tools for creatives and marketers, while Salesforce leads in customer relationship management. Recently, both firms have been betting big on artificial intelligence (AI) to drive future growth. This raises an important question for investors: Which of the two ...

Core Viewpoint - Adobe's stock has increased by 19% in a month due to its focus on Generative AI and innovative portfolio, but faces challenges from competition and monetization issues [1][3] Company Performance - Adobe's AI business is small compared to competitors like Microsoft and Alphabet, with Microsoft benefiting from Azure AI services and Alphabet from its AI infrastructure [2] - Adobe shares have underperformed compared to Microsoft and DocuSign, which returned 24.9% and 20.9% respectively, while Adobe outperformed Alphabet's 8.2% return [3] Valuation Metrics - Adobe's stock is considered overvalued with a forward price/sales ratio of 7.28X, higher than the sector average of 6.14X and competitors like Salesforce and DocuSign [6] AI Portfolio Development - Adobe has expanded its AI offerings with products like Adobe GenStudio and Firefly Services, aimed at enhancing marketing collaboration [9] - The company plans to monetize Firefly through new Creative Cloud offerings and is integrating AI across its portfolio, which is expected to drive top-line growth [10] Financial Guidance - Adobe's AI business is projected to grow from over $125 million in Q1 FY25, expected to double by the end of FY25 [11] - For FY25, Adobe anticipates Digital Media segment revenues between $17.25 billion and $17.40 billion, with total revenue guidance between $23.30 billion and $23.55 billion [12][13] Earnings Estimates - The Zacks Consensus Estimate for FY25 earnings is $20.36 per share, reflecting a 10.53% growth over FY24, although it has seen a decline in estimates recently [14] - The estimate for Q2 FY25 earnings is $4.96 per share, suggesting a 10.71% growth from the previous year [16]