Adobe’s CFO on using AI to hit a $21.5 billion revenue target and stand out among peers including Canva

Good morning. Adobe is betting big on generative AI, announcing last week in Las Vegas new features for products tied to content creation and training models, including some that allow firms to leverage their IP and branding and offer an AI assistant.

But what is Adobe's overall AI strategy? Dan Durn, CFO and EVP of finance, technology services, and operations, said it all comes down to adding value for customers, democratizing access, and expanding opportunities for modernization.

Adobe, no. 233 on the Fortune 500, said at last week's conference that in 2024 it has a total addressable market of $205 billion, and that it will reach a TAM of approximately $293 billion by 2027 largely because of AI.

For fiscal year 2024, Adobe has a total revenue target of $21.3 billion to $21.5 billion. That forecast includes $15.75 billion to $15.85 billion in digital media segment revenue plus digital experience subscription revenue from $4.75 billion to $4.8 billion.

New subscriptions for cloud services continue to be the predominant driver of growth—as a percentage of revenue, they're now responsible for close to 95%, compared with just 28% in 2013, according to Durn. Adobe shifted from offering priority licenses in a software-as-a-service model for its software suite to monthly subscriptions more than a decade ago.

"How many companies have SKUs that they sell to consumers for a few dollars a month, all the way up to large, transformative enterprise deals, with total contract values that can be more than $100 million in size?" Durn said.

But that doesn't mean Adobe is without competition. For example, Canva, an Australian design-software developer just acquired the design platform Affinity, which is geared toward professional users.

So how can Adobe stand out among peers? “We have a pervasive footprint in terms of how work gets done within enterprises, by individuals, within the creativity process, and within the marketing departments, and how the content is generated and delivered," Durn told me. "We cover that entire surface area.”

Adobe's approach to generative AI is natively embedding features into products and workflows, Durn said. “The data we use to train our models is data that we have the IP rights to,” he explained. “We're not scraping the internet. We're not taking IP from others, and then trying to monetize it. So that’s differentiated.”

Given Adobe's overall vision and approach, Durn added, "I feel really good about our position competitively."

Sheryl Estrada
sheryl.estrada@fortune.com

María Soledad Davila Calero curated the Leaderboard and Overheard sections of today’s newsletter.

This story was originally featured on Fortune.com