10:51 AM EDT, 09/12/2025 (MT Newswires) -- Adobe's (ADBE) Q3 results show that it is making faster-than-expected progress in monetizing generative artificial intelligence, with $250 million in direct AI-related annual recurring revenue, or ARR, and $5 billion influenced by AI, RBC said in a note Thursday.

Analysts, including Matthew Swanson, said the company took five quarters to generate its first $125 million in direct GenAI ARR, but it only took two more quarters to double that figure. They added that while there are still questions around GenAI monetization and how Adobe will compete in this space, investor sentiment appears to be improving.

Adobe's broader goal is to create a full ecosystem centered around generative content, one that improves return on investment and adds value by enabling seamless workflows across its Creative Cloud and Experience Cloud offerings. New tools like the Large Language Model Optimizer for brand visibility are supporting Adobe's role as a key player in both creative and marketing sectors, the analysts added.

"We believe Adobe should outperform its peer group over the next 12 months," the analysts said, adding that the company remains a compelling mix of growth, profitability, and resilience, especially in the current macroeconomic environment.

"We also continue to view generative AI as both a near- and long-term benefit to both the creative and experience businesses, which we think can be a catalyst to 2025 revenue growth and also improve overall investor sentiment."

RBC is keeping its outperform rating and $430 price target on Adobe.

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