Dive Brief:

• Web design software provider Adobe Systems is moving forward on its plans to “infuse” artificial intelligence across its full suite of products, with the technology set to play a key role as a generator of future revenue and growth, executives said Wednesday during the company’s investor day.
• “I would say every dollar of revenue, we want that to be $1 of revenue that has an AI implication on it,” CEO Shantanu Narayen said during the Photoshop and Adobe Acrobat provider’s investor day presentation. Prior to its investor event, the San Jose, California-based company on Tuesday released a fleet of new announcements related to its AI initiatives, including new products and partnerships surrounding its “Firefly” platform — a suite of generative AI models which enable image and video generation, according to the company’s website.
• Adobe is “incredibly well positioned to capitalize on the massive AI opportunity on the horizon,” CFO Dan Durn said during the investor day presentation according to a transcript. “Arguably, the best positioned.”

Dive Insight:

As well as the new capabilities related to its Firefly platform, Adobe also announced new integrations with Amazon Web Services, and a move to bring AI agents into Microsoft’s Copilot as part of an existing collaboration between the two companies.

The aim to incorporate AI across all aspects of the company’s products comes as the software provider looks to reassure wary investors that its investments in the technology will reap compelling rewards.

Investments in AI contributed to surging revenues for its most recent quarter, with Adobe reporting $5.7 billion in revenue for its Q1 ended Feb. 28 — a 10% rise year-over-year, the company said last week. Annual recurring revenue for the company’s standalone and add-on AI products reached $125 million at the end of the quarter, with Adobe projecting that figure will double over the next nine months.

Despite strong results, however, the company’s stock price slumped about 14% following its earnings report on March 13, as skeptical investors remained unconvinced Adobe was showing a clear path to AI monetization, CFO Dive previously reported.

Both Narayen and Durn took pains to address AI monetization concerns in their Thursday remarks, pointing to growth and rising engagements for solutions such as its Firefly platform.  

“We are seeing strength with creative and marketing professionals, and you can see it in usage and engagement,” Durn said. “Customers, they are generating over 1 billion Firefly assets every month.”

The question of AI’s monetization or return on investment is looming large for many companies and their CFOs, as both AI vendors and users weigh the technology’s present costs against its potential gains.

ROI is at the center of the tug-of-war between executives contemplating AI’s risk versus its rewards: a recent study by Big Four accounting firm KPMG found technology ROI is the main sticking point between the finance and IT functions, CFO Dive sister publication CIO Dive recently reported. Nearly one-third of CFOs stated technology innovation spending is excessive, according to the survey, compared to only 16% of chief information officers.

Adobe’s executives are confident that the technology will be a key driver of future growth, they said during the investor presentation.

“AI monetization, our innovation, it’s infused across the breadth of our products, and it’s influencing billions of ARR,” Durn said Wednesday. “And you can see the impact. New users, more usage, better retention, more value. And that’s only going to continue as AI becomes an increasing driver of Adobe’s growth.”