Ahead of the earnings report, Adobe announced the full commercialization of its AI application Firefly, with pricing lower than OpenAI.
Global design software company Adobe has announced the commercialization plan for its AIGC tool, Firefly AI. It will be priced on a point-based charging model, with prices lower than its competitor, DELL·E from OpenAI. The market has a positive outlook on Firefly's performance. Following the announcement, Adobe's stock price rose by over 3%.
Global leading design software giant, Adobe, has announced the pricing model for its AIGC tool, with a promising future for AI applications.
Ahead of the earnings report, Adobe has unveiled the commercialization plan for its AIGC tool, Firefly AI: a point-based pricing system where users consume points to generate AI graphics. Each point corresponds to one image, and users can receive 25 free points per month, with the option to purchase additional points.
Following the announcement, Adobe's stock rose over 3% by the end of Wednesday's trading session.
Firefly: Generating One Image for $0.35, Adobe Services to Increase in November
Adobe's point-based pricing and design are relatively complex, offering the option to purchase Firefly as a standalone service or as part of the Creative Cloud suite.
According to its official website, the monthly subscription fee for Firefly's personal version in Hong Kong is HK$38, with an annual price of HK$336, including 100 points for generating images and a watermark removal feature. In terms of Chinese yuan, the price for generating one image is approximately ¥0.35.
If users choose to purchase the Adobe Creative Cloud suite, which includes services like Photoshop and Illustrator, the monthly subscription fee is HK$618. Annual subscribers can enjoy a discounted price of HK$228 per month or pay HK$2736 for the year, which includes 1000 points for generating images, educational courses, and other services. Adobe also announced yesterday that starting from November 1st, the subscription price for Creative Cloud will be further increased.
Currently, Firefly can be used in programs such as Photoshop, Illustrator, and Express, as well as on independent websites. Users without a subscription can also generate 25 images for free each month.
In the future, Adobe plans to launch a standalone Firefly App.
Priced Lower than OpenAI's DELL·E, Wall Street Bullish on Firefly's Market Performance
Based on the standalone purchase price of Adobe Firefly, the cost of generating each image is approximately $0.05, which is much lower than OpenAI's AIGC service, DELL·E, which costs $0.13 per generation.
Adobe has long been the sales champion in the creative professional software market. In the first half of the year, the market was initially skeptical of Adobe's performance amidst competition from other AIGC startups, but the introduction of Firefly has turned the tide in Adobe's favor. With its "artist-friendly" and "safety for commercial use" product strategy, Firefly has gained market recognition.
The selling point of Firefly is its humility and safety. Adobe has always emphasized that Firefly is only an auxiliary tool for artists and cannot replace their work. At the same time, it pays special attention to protecting the rights of artists and focuses on solving copyright issues in the process of using AIGC applications. The company claims that the works generated by Firefly can be safely used for commercial purposes, and if clients face copyright claims, Adobe will provide support.
After the U.S. stock market closed on Thursday, Adobe will release its third-quarter earnings report.
Analysts surveyed by FactSet expect Adobe's earnings per share for the third quarter to be $3.98, with revenue of $4.87 billion. They also predict earnings per share of $4.06 and revenue of $5 billion for the fourth quarter.
Among the 37 analysts covering Adobe, 23 have given it a buy rating, 14 have given it a hold rating, and the average target price is $576.17. According to FactSet data, since August 2021, when one analyst briefly gave the stock a sell rating, no sell ratings have been given to the stock.
Citigroup analyst Tyler Radke stated in a report on Wednesday that the monetization direction of Firefly will be a "focus" of the earnings conference call on Thursday evening.
He wrote:
"Although the development of Firefly looks promising so far, we hope to see further evidence that Firefly can achieve long-term sustainable growth as GenAI structurally lowers the barriers to entry for new competitors in the creative field."
Jefferies analyst Brent Thill has given Adobe a buy rating with a target price of $660, which is $100 higher than Wednesday's closing price.
He stated that previously, Adobe stipulated that AIGC tools were only for experimentation and personal projects and could not be used for commercial purposes. However, after the monetization launch, images generated by Firefly can be widely used for advertising, marketing, and other business purposes.
So far this year, Adobe's stock price has risen by 64%, far outperforming the S&P 500's 16% increase, making it one of the most active stocks in the current market for generative AI concepts.
