(Reuters) -Adobe raised its fiscal 2025 revenue and profit forecasts on Thursday, signaling strong demand for its design software and increased monetization of its artificial intelligence tools.

Shares of the San Jose, California-based company rose around 4% in extended trading.

Adobe's offerings, including Photoshop, InDesign, Acrobat and Illustrator, have become household names in design software, widely used by enterprises, students and creative professionals to edit, create websites, brochures and graphics.

To capitalize on the AI boom, Adobe has developed an AI product called Firefly, which enables creators to generate videos and images from text and incorporate them into designs.

However, like other software companies, Adobe faces pressure from investors to demonstrate returns on its substantial technology investments, while competition intensifies with smaller firms such as Figma eager to capture market share.

Adobe's shares have fallen over 21% so far this year, reflecting weak investor sentiment, while Jefferies analysts said they do not foresee meaningful acceleration in Firefly's adoption and believe "material AI contribution is more likely a 2026-2027 event".

The company raised its fiscal 2025 revenue forecast to between $23.65 billion and $23.70 billion, up from its previous projection of $23.50 billion to $23.60 billion.

It also raised its forecast for annual adjusted earnings per share to between $20.80 and $20.85, compared with its prior projection of $20.50 to $20.70 per share.

For the fourth quarter, Adobe expects revenue of between $6.08 billion and $6.13 billion, compared with analysts' estimates of $6.08 billion, according to data compiled by LSEG.

It expects fourth-quarter adjusted EPS of between $5.35 and $5.40, while analysts expect $5.34 per share.

Adobe reported revenue of $5.99 billion for the quarter ended August 29, beating estimates of $5.91 billion.