09:13 AM EDT, 09/12/2025 (MT Newswires) -- Adobe's (ADBE) fiscal third-quarter results were positive for generative artificial intelligence sentiment as the software maker topped market expectations and lifted its full-year outlook, RBC Capital Markets said in a client note emailed Friday.

The company late Thursday posted adjusted earnings of $5.31 per share for the quarter ended Aug. 29, up from $4.65 a year earlier, while revenue climbed 11% to $5.99 billion. Both metrics came in ahead of the consensus on FactSet.

"Headline numbers were generally above expectations as the company continues to execute in a dynamic macro and competitive environment," RBC analysts, including Matthew Swanson, wrote in the note. "While top-line numbers remained strong, profitability stood out particularly due to the number of investments the company has been making on its product roadmap."

RBC believes the quarter was a positive for aligning the company's product roadmap with "quantifiable" results and a boost for generative AI sentiment, with Adobe Chief Executive Shantanu Narayen saying the company's AI-first annualized recurring revenue, or ARR, already exceeded its year-end target of $250 million.

AI-influenced ARR reached $5 billion, up from $3.5 billion as of the end of fiscal 2024, indicating the "pervasiveness" of the technology throughout the product portfolio, according to the brokerage. The software maker's product portfolio is also beginning to grow beyond its Adobe suite, with senior management highlighting an expanded list of generative models and new marketing offerings with Amazon Ads and Meta, among others, RBC said.

For fiscal 2025, the company anticipates adjusted EPS to be in a range of $20.80 to $20.85, up from its previous projections of $20.50 to $20.70. Revenue is pegged at $23.65 billion to $23.7 billion, up from the prior guidance of $23.5 billion to $23.6 billion.

Adobe shares were up 3.3% in the most recent premarket activity.

Despite the improved full-year outlook, Adobe's fourth-quarter forecast indicated "some deceleration," according to RBC. The company estimates adjusted EPS of $5.35 to $5.40 on revenue between $6.08 billion and $6.13 billion for the quarter. The firm's management said there is nothing one-time in nature influencing dynamics, as the fundamental business continues to perform well, RBC said in its note.

With Adobe's annual creativity conference, Adobe Max, coming up in October, RBC expects the company's focus to remain on pricing models and new generative tools. "Our focus will remain on integrations and building out of the ecosystem which has been area of success (year-to-date), and we feel positions the company well for durable growth in the enterprise," according to Swanson.

The brokerage maintained its outperform rating on Adobe's stock and its price target of $430.