Adobe Inc. reported its first-quarter fiscal year 2025 earnings, surpassing Wall Street's expectations with revenue of $5.71 billion, up 10% year-over-year, and adjusted earnings per share of $5.08, beating the consensus estimate of $4.97. The company's digital media unit, which includes its flagship creative and document-processing software, saw an 11% increase in sales to $4.23 billion, while the digital experience unit, encompassing marketing and analytics software, reported a 10% rise in revenue to $1.41 billion. Adobe has been incorporating its AI model, Firefly, into apps like Photoshop and Premiere, and announced it would charge about 50 cents per AI-generated video and separately announced price increases for some of its applications. Despite the strong first-quarter performance, Adobe provided a disappointing outlook for the second quarter, forecasting revenue between $5.77 billion and $5.82 billion, slightly below the average analyst estimate of $5.8 billion. Adjusted earnings per share for the second quarter are expected to be between $4.95 and $5.00, compared to the consensus of $5.00. Adobe's shares fell about 5% in extended trading following the announcement, reflecting investor concerns over the company's growth prospects and its ability to monetize new generative artificial intelligence features. The company's stock has slipped 24% over the past 12 months. Adobe is scheduled to host an event for investors next week to provide additional long-range financial information and more details of its AI strategy. 'Adobe’s success over the next decade will be driven by customer-focused innovation and new offerings for creators, marketing professionals, business professionals and consumers,' said Chief Executive Officer Shantanu Narayen. The company reaffirmed its fiscal year 2025 targets, projecting revenue between $23.3 billion and $23.55 billion and adjusted profit between $20.20 and $20.50 per share.