Shares of the creativity software provider Adobe Inc. were trading slightly lower today, even though the company topped Wall Street’s targets and delivered a revenue outlook in line with estimates.

Adobe reported net income of $1.4 billion for its fiscal third quarter, rising from the $1.14 billion profit it delivered a year earlier. Earnings before certain costs such as stock compensation came to $4.09 per share, ahead of Wall Street’s consensus estimate of $3.98. The company’s revenue rose 10% from a year earlier, to $4.89 billion, beating the analyst forecast of $4.87 billion.

The company also reported $3.59 billion sales from its digital media segment sales, which includes its iconic Creative Cloud design software, versus the analysts’ expectation of just $3.57 billion.

Although Adobe’s stock fell more than 2% in the extended trading session, it’s up more than 63% in the year to date, driven by a number of advancements it has made in artificial intelligence. The company has announced numerous tools this year that aim to help design professionals become more productive, including its generative AI Firefly models for creative expression. These include a text-to-image generator that can be used to create images using words, a tool in Premiere Pro that helps to transform raw footage into a professional video, and a generative fill tool for Photoshop that helps to modify images with text prompts.

In a conference called, Adobe Chief Financial Officer Dan Durn addressed concerns raised by analysts about the costs of maintaining these new AI services. He said that in the six-month beta of Firefly, more than 2 billion images were created by users. “All this has done while we’re delivering strong margins,” he said.

The company reported a operating margin of 46.3% during the quarter, up from 45.3% in the preceding quarter and 44.1% a year earlier.

Adobe Chairman and Chief Executive Shantanu Narayen (pictured) said the company’s success in the quarter was driven by value-added services. He said that as Firefly is integrated into more of Adobe’s tools, the company has become very good “segmenting our customers and understanding how we can make sure that they have the right offering.”

Liz Miller, an analyst with Constellation Research Inc., told SiliconANGLE Adobe has demonstrated extremely durable growth, with its approach to AI being a great example of this. She said the company is focused on using AI to fill the gaps and improve productivity in the areas of creativity and engagement, and has done a very good job of this.

“The general availability of Firefly is just the start,” Miller continued. “Keep your eyes on Adobe’s digital experience group, which has needed to step into a solid and repeatable growth pattern. This quarter the group has seen impressive growth thanks to boosts in solutions like Journey Optimizer, which doubled its book of business.”

Looking to the fourth quarter, Adobe is targeting earnings of $4.10 to $4.15 per share on sales of $4.975 billion to $5.025 billion. Wall Street is looking for earnings of $4.06 per share on revenue of exactly $5 billion.

Just as it did in the previous quarter, when it announced plans to monetize its Firefly model ahead of its earnings call, Adobe dropped another update just one day prior to this report. The company announced general availability of the commercial version of Firefly, which implements a credit system to charge customers for using it within multiple applications. Customers will be charged based on “the generated input’s computational costs and the value of the generative AI feature used,” the company said.

Photo: Fortune Live Media/Flickr