Adobe (ADBE.US) is expected to see both revenue and profit growth in Q3, with its AI business remaining the focus.

Adobe (ADBE.US) will report its third-quarter earnings after the market closes on Thursday, with investors focused on whether the company's artificial intelligence (AI) business can maintain its growth momentum. According to data compiled by Visible Alpha, analysts expect the software company to post third-quarter revenue of $5.37 billion, up 10% year-on-year; net profit of $1.57 billion, up 12% year-on-year; and earnings per share of $3.51. Adobe's digital media segment (which includes Creative Cloud subscriptions) achieved $487 million in net annual recurring revenue (ARR) in the second quarter, up from $470 million a year ago, helping the company post better-than-expected second-quarter results and driving its stock up more than 14% the next day. Analysts expect the segment's net ARR to slightly decline to $462 million in the third quarter, according to Visible Alpha. Oppenheimer analysts said investors may still see the metric "re-accelerate" in the second half of the year. Investors may also be paying attention to the latest monetization of Adobe's AI products, which the company previously noted that many Creative Cloud users are upgrading their subscription plans to access its generative AI model Firefly. Besides Firefly, the company has also introduced generative AI in Document Cloud and Adobe Express. The company may also launch new AI services at its Adobe MAX conference in October. Oppenheimer analysts said they expect to announce "generative video, editing, and audio solutions nearing test stage." Since Adobe reported better-than-expected second-quarter results, its stock has surged nearly 23%, although it has fallen about 5% so far this year.