Adobe Inc. (ADBE) Earnings

metirFinance

Nov 2026upcoming

Next quarter

Expected to report Dec 9, 2026 — estimated from last year’s reporting date.

Consensus is $5.10 EPS for Nov 2026 across 11 estimates, ranging $5.03 to $5.15.

ADBE Aug 2026

Reported Sep 10, 2026 · after the close

: 2.26%
: +1.37%

: $4.86
: $4.75
: —
: —

Highlights

Revenue: Q3 revenue reached a record $6.76 billion, up 13% year over year and 12% in constant currency, versus $5.99 billion a year ago and $6.62 billion in Q2.
Earnings: GAAP diluted EPS was $4.62, up from $4.18 a year ago and $4.25 in Q2, but below the supplied consensus of $4.86; non-GAAP EPS was $6.13.
AI monetisation: AI-first ending ARR exceeded $650 million, growing more than 150% year over year, while total ending ARR reached $27.50 billion, up 11.2%.
User expansion: Monthly active users across Adobe’s creativity and productivity products surpassed 1 billion, up more than 20% year over year; creative freemium MAU exceeded 100 million, up more than 70%.
Segment growth: Business Professionals & Consumers subscription revenue rose 16% to $1.91 billion, while Creative & Marketing Professionals subscription revenue increased 13% to $4.65 billion.
Freemium trade-off: Management is prioritising user acquisition and engagement over near-term conversion and pricing actions, contributing to weaker net new ARR while AI usage and the user funnel expand.
Cash generation: Operating cash flow reached a Q3 record of $2.52 billion, and Adobe repurchased approximately 9.5 million shares during the quarter.
Outlook: Adobe raised FY2026 targets to $26.576-$26.626 billion of revenue and $18.12-$18.17 of GAAP EPS, while maintaining 10.2% ending ARR growth guidance.

Analysis

Adobe’s Q3 was a record revenue quarter with accelerating AI engagement, although GAAP EPS came in below the supplied $4.86 consensus at $4.62. Revenue of $6.76 billion rose 13% year over year from $5.99 billion and 2% sequentially from $6.62 billion in Q2. GAAP operating income increased to $2.35 billion from $2.17 billion a year ago and $2.24 billion in Q2, while net income rose to $1.83 billion from $1.77 billion and $1.71 billion, respectively. Non-GAAP EPS was $6.13, up 15% year over year.

The defining feature was Adobe’s decision to use freemium distribution to widen its funnel before maximising monetisation. Creative freemium MAU surpassed 100 million, and total creativity and productivity MAU crossed 1 billion, but management acknowledged that this strategy is weighing on near-term conversion and net new ARR. Against that trade-off, AI-first ARR exceeded $650 million, up more than 150%, and Firefly app and credit-pack ARR grew 40% sequentially. Adobe raised its full-year revenue and EPS targets, while holding ending ARR growth at 10.2%. The quarter also marked a leadership transition: Anil Chakravarthy will become CEO on December 1, with Shantanu Narayen moving to executive chair.

Results and guidance

Adobe delivered broad financial growth, led by subscription revenue and operating leverage. Total subscription revenue was $6.58 billion, up from $5.79 billion a year ago, and customer-group subscription revenue increased 14% to $6.56 billion. GAAP operating margin was approximately 34.8%, versus 36.3% a year ago, reflecting higher operating expenses, while non-GAAP operating income rose to $2.97 billion from $2.77 billion.

Fourth quarter: Adobe targets revenue of $6.80-$6.85 billion, Business Professionals & Consumers subscription revenue of $1.93-$1.95 billion, Creative & Marketing Professionals subscription revenue of $4.665-$4.695 billion, and GAAP EPS of $4.65-$4.70.
Full year: FY2026 revenue guidance increased to $26.576-$26.626 billion from the prior outlook, with GAAP EPS now expected at $18.12-$18.17 and non-GAAP EPS at $24.45-$24.50.
Contract visibility: Remaining performance obligations were $22.16 billion, up 8% year over year, with current RPO at 67%; management said RPO typically steps up in Q4 and remains relatively flat through the following three quarters.

AI and freemium funnel

Adobe is deliberately balancing monetisation against customer acquisition. Management is routing more users into free experiences across Acrobat, Express, Firefly and Creative Cloud, then using engagement and AI intensity to determine when to convert them into paid ARR. That approach is expanding reach but has reduced near-term net new ARR growth and delayed some pricing optimisation.

AI-first ARR: Ending ARR exceeded $650 million and grew more than 150% year over year, while Firefly app and credit-pack ARR increased 40% quarter over quarter.
Engagement: Acrobat AI Assistant MAU doubled sequentially, and AI credit consumption accelerated across Creative Cloud and Firefly, with video usage cited as a particularly strong driver.
User scale: Total Adobe MAU exceeded 1 billion, up more than 20% year over year; Business Professionals & Consumers MAU exceeded 900 million, up more than 25%, and creative freemium MAU surpassed 100 million, up more than 70%.

Customer group performance

Business Professionals & Consumers remained the fastest-growing reported customer group, while Creative & Marketing Professionals continued to grow at a double-digit rate despite the freemium transition. Adobe is using AI agents and broader distribution to deepen engagement across both individuals and enterprises.

Business Professionals & Consumers: Subscription revenue rose 16% year over year to $1.91 billion, supported by Acrobat and Express, SMB demand, enterprise adoption of Acrobat AI capabilities, and new productivity-agent features.
Creative and marketing: Subscription revenue increased 13% to $4.65 billion, or 12% in constant currency. Adobe cited strength in Creative Cloud teams and enterprise offerings, growing Firefly usage, and more than 20% ARR growth in AEM and Agentic web apps, Gen Studio, and AEP and apps.
Enterprise expansion: Adobe doubled the number of paid customers for its brand-visibility solutions sequentially and reported 1,700 customers and early adopters for CX Enterprise CoWorker.

Leadership and capital allocation

The quarter introduced a planned CEO succession alongside continued investment in Adobe’s AI product portfolio. Anil Chakravarthy, currently president of Digital Experience, will become president and CEO on December 1, while Narayen becomes executive chair. Management framed the transition as an internal succession intended to preserve momentum across creativity, productivity and customer experience.

Cash flow: Operating cash flow was a record $2.52 billion, compared with $2.20 billion in Q3 FY2025.
Repurchases: Adobe bought back approximately 9.5 million shares during the quarter, using $2.23 billion for common-stock repurchases; $24.55 billion remained under the April 2026 authorisation.
Product expansion: Adobe agreed to acquire Topaz Labs, whose AI image and video enhancement technology is expected to be integrated into Firefly and Creative Cloud after the transaction closes, subject to regulatory approval.

Adobe Inc.

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