Good morning. The next evolution of personalization for customers is slated to be agentic AI—autonomous digital agents capable of independently performing tasks. For marketing software giant Adobe, that means a top priority is building out a collection of its own brand of creative agents.
During the Adobe Summit last week in Las Vegas, I had a conversation with Dan Durn, CFO and EVP of finance, technology services, and operations at Adobe. The company is placing a big bet on agentic AI and announced 10 agents and an agent orchestration tool on its Adobe Experience platform. It’s also designed to work with third-party agents and customer-built agents.
“Agents are a way to bring technology capabilities into the creative workflow to unload those tasks that are just slow and repetitive and require people to just grind their way through it,” Durn told me. For example, one such agent monitors the status of ongoing projects, streamlines approvals, and focuses on collaboration between departments or employees to accelerate workflows.
Addressing content productivity and using real-time data, such as on Adobe’s customer data platform, are the “two pillars that are on the critical path of being successful with personalization,” Durn said.
Boston Consulting Group predicts that over the next five years, $2 trillion in revenue will shift to companies that understand how to create personalized experiences and communication. And new AI capabilities provide more personalization, according to the firm.
Regarding enterprise sales, Adobe (No. 210 in the Fortune 500) reported that in FY 2024 joint creative and marketing deals grew by over 100% year-over-year. “It’s a proof point of that dynamic we see, which is creative and marketing groups coming closer together in the enterprise,” Durn said.
“The predominant driver of growth has been, continues to be new subscribers to the Adobe platform,” he said. “Pricing is a lever for us. Every so often, we’ll want to align the price that we charge our customers to reflect the substantial value that is in our products.” He added, “We’ll use pricing to make sure we’re getting paid for the value we’re delivering.”
In Q1 FY 25, the three months that ended on Feb. 28, Adobe earned record revenue of $5.71 billion, representing 10% year-over-year growth. For Adobe’s standalone and add-on AI products, annual recurring revenue reached over $125 million for the quarter and, over the next nine months, the company expects that figure to double. Although there were better-than-expected results, Wall Street had concerns about monetizing AI growth. However, some analysts are seeing momentum toward the long-term AI strategy.
Bank of America analysts wrote in a March 19 note following Adobe’s investor meeting on March 18: “No financial targets were provided to back momentum with top of funnel efforts, monetization and AI offerings. However, a few disclosures and product introductions suggest momentum is building.” The analysts maintained a Buy rating and a price target of $528.
“This technology allows us to take content creation and production and monetize it in a way that’s more customer value-based or more outcome-based,” Durn told me.
And he sees innovation as part of Adobe’s DNA. “We’ve been at the core and foundation of some of the important digital trends that are shaping the digital economy,” he said of the company.
Sheryl Estrada
sheryl.estrada@fortune.com
This story was originally featured on Fortune.com
