Adobe

Adobe makes software for creative work, documents and digital marketing. Its Creative Cloud apps include Photoshop, Lightroom, Illustrator and Premiere, and its Acrobat products create, edit and sign PDF documents. Its customer experience products, such as Adobe Experience Manager, help companies make and deliver content and run marketing campaigns. Adobe adds generative AI features, such as its Firefly models, to these products and also sells AI-first products.

Almost all revenue comes from subscriptions, which were $6.58 billion of $6.76 billion in revenue in Q3 FY2026. Adobe reports two customer groups: Business Professionals & Consumers, and Creative & Marketing Professionals. In April 2026, it bought Semrush, a platform for search and brand visibility.

The market fears that generative AI tools from other companies will make Adobe's creative software less necessary. If people can make images, video and designs with simple AI prompts, demand for paid Creative Cloud seats and their prices can fall. Changes in leadership add doubt. The CFO left on June 15, 2026, the head of the creativity and productivity business left on September 27, 2026, and Anil Chakravarthy becomes CEO on December 1, 2026.

The results so far do not show a decline. In Q3 FY2026, revenue grew 13%, total ARR grew 11.2% to $27.50 billion, AI-first ARR grew more than 150%, and Adobe reached 1 billion monthly active users. For the gap to close, four things must be true. Total ARR must keep growing at about 10% or more, as in the FY2026 target of 10.2%, also without the help of acquisitions such as Semrush.

AI-first ARR must keep growing fast enough to replace any lost seat revenue. The new free and low-price users must turn into paid subscribers. The non-GAAP operating margin must stay near the 45% target for FY2026. The first evidence comes with the Q4 FY2026 report, estimated for about December 10, 2026, which should also give the FY2027 targets under the new CEO.

The question about AI is a long one, so the gap can close only slowly, over the next two to three years of results.

1. Dec 10, 2026 · est.Pending

   Q4 FY2026 earnings and FY2027 targetsTotal ARR growth of about 10.2% for FY2026 and FY2027 targets with continued double-digit ARR growth pass; ARR growth below target or FY2027 targets with slower growth fail.
2. Mar 15, 2027 · est.Pending

   Q1 FY2027 earnings: first quarter under the new CEOAI-first ARR that keeps growing fast and a non-GAAP operating margin near 45% pass; slower total ARR growth or a falling margin fail.

Every passed and failed checkpoint across all picks

• October 12, 2026Wells Fargo cut its rating on Adobe to Underweight. It cited a survey of 100 chief information officers in which companies plan to move part of their IT budgets to AI, slower organic growth, weaker pricing power and risk from the management changes. HSBC cut its rating to Hold in the same week. The stock fell about 4% on October 12.
• September 10, 2026Adobe reported record Q3 FY2026 results. Revenue grew 13% to $6.76 billion. GAAP EPS was $4.62 and non-GAAP EPS was $6.13. Total ARR was $27.50 billion, AI-first ARR grew more than 150%, and users passed 1 billion a month. Adobe raised its FY2026 targets to revenue of $26.576 billion to $26.626 billion and non-GAAP EPS of $24.45 to $24.50.
• September 3, 2026Adobe announced that Anil Chakravarthy, the head of its Customer Experience Orchestration business, becomes President and CEO on December 1, 2026. Shantanu Narayen will then retire as CEO and become Executive Chair. David Wadhwani, President of the Creativity & Productivity business, stepped down on September 27, 2026.

• Generative AI tools from other companies can make images, video and designs with simple prompts. They can reduce demand for paid Creative Cloud seats or force lower prices. Adobe names AI and cloud-native companies among its competitors.
• Leadership changes at the same time. A new CEO starts on December 1, 2026, the CFO role has had an interim holder since June 15, 2026, and the head of the creativity and productivity business left on September 27, 2026. A change in strategy or execution can follow.
• Part of the reported growth comes from acquisitions. Semrush added about $480 million of ARR in Q2 FY2026, so ARR growth without acquisitions is lower than the reported 11.2%. A slowdown in the core business can be hidden for some quarters.
• Adobe has $1.35 billion of senior notes due in February and April 2027 and plans to refinance them. Higher interest rates would raise the cost, but the amount is small against its cash flow.

Adobe funds itself mainly with its cash flow and has a small amount of debt. At August 28, 2026, it had $6.15 billion of senior notes at par and $250 million of commercial paper at a rate of 3.77%. Read more