Adobe (NASDAQ:ADBE) Issues Quarterly Earnings Results, Beats Estimates By $0.05 EPS

Adobe (NASDAQ:ADBE) announced its earnings results on Thursday. The software company reported $6.13 EPS for the quarter, topping the consensus estimate of $6.08 by $0.05, FiscalAI reports. The business had revenue of $6.76 billion during the quarter, compared to analysts’ expectations of $6.69 billion. Adobe had a net margin of 28.69% and a return on equity of 65.11%. The firm’s revenue was up 12.9% on a year-over-year basis. During the same quarter in the prior year, the company posted $5.31 earnings per share. Adobe updated its Q4 2026 guidance to 6.300-6.350 EPS and its FY 2026 guidance to 24.450-24.500 EPS.

Here are the key takeaways from Adobe’s conference call:

• Adobe reported Q3 revenue of $6.76 billion, up 13% year over year, with non-GAAP EPS of $6.13, up 15%. Management raised its FY 2026 revenue and EPS targets, citing strong year-to-date performance.
• AI adoption is accelerating, with AI-first ending ARR exceeding $650 million, up more than 150% year over year. Creative freemium MAUs surpassed 100 million, Acrobat AI Assistant MAUs doubled sequentially, and Firefly ending ARR rose 40% quarter over quarter.
• Adobe’s push to expand its freemium funnel is prioritizing user acquisition over near-term monetization, contributing to a 36%-37% year-over-year decline in net new ARR. RPO growth also slowed to 8%, although management said the seasonal Q4 pattern remains intact.
• Anil Chakravarthy will become CEO on December 1, with Shantanu Narayen moving to executive chair. Management emphasized continuity and an increased focus on agentic AI across creativity, productivity, and customer experience.
• Adobe highlighted strong enterprise momentum, including more than 1,700 early adopters of CX Enterprise Coworker and over 20% ARR growth across key Experience Cloud offerings. The planned Topaz Labs acquisition is expected to add advanced AI image and video enhancement capabilities, subject to regulatory approval.

Adobe Stock Down 2.4%

Adobe stock opened at $248.83 on Friday. The firm has a market capitalization of $98.91 billion, a PE ratio of 14.24, a P/E/G ratio of 0.89 and a beta of 1.42. The company’s 50-day moving average is $252.89 and its 200-day moving average is $245.59. Adobe has a fifty-two week low of $190.12 and a fifty-two week high of $370.86. The company has a debt-to-equity ratio of 0.42, a current ratio of 0.75 and a quick ratio of 0.75.

Key Stories Impacting Adobe

Here are the key news stories impacting Adobe this week:

• Positive Sentiment: Adobe reported record fiscal Q3 revenue of $6.76 billion, up 12.9% year over year, while adjusted EPS of $6.13 exceeded the $6.08 consensus estimate. The company also cited strong demand for AI-integrated products, AI-first annual recurring revenue growth of more than 150%, over 1 billion monthly active users, and approximately 9.5 million share repurchases. Adobe Reports Record Q3 Results
• Positive Sentiment: Adobe raised its fiscal 2026 outlook, calling for adjusted EPS of $24.45 to $24.50 and revenue of roughly $26.6 billion, above prior expectations. Management said its AI strategy is gaining traction across creative, productivity, and customer-experience products. Adobe posts record quarter, lifts guidance as AI push pays off
• Neutral Sentiment: Analysts largely maintained cautious ratings after the report. Piper Sandler kept a Hold rating while raising its price target to $250, and William Blair also maintained Hold, citing the Q3 beat but slower forward-looking metrics and a steady outlook. Adobe Maintained at Hold
• Negative Sentiment: Fiscal Q4 revenue guidance of approximately $6.8 billion to $6.85 billion was viewed as slightly below or near expectations, renewing concerns that growth is slowing and that AI-native competitors could pressure Adobe’s core franchises. The market reaction indicates investors wanted a stronger acceleration in AI-driven sales. Why is Adobe stock falling despite a revenue and earnings beat?
• Negative Sentiment: Bank of America Securities reiterated a Sell rating and a $220 price target, pointing to decelerating growth and uncertainty over AI monetization. Analysts are also weighing Adobe’s freemium transition, strategic uncertainty, and the shift to incoming CEO Anil Chakravarthy, which could increase execution risk. Adobe Rated Sell

Insider Transactions at Adobe

In other Adobe news, CAO Jillian Forusz sold 416 shares of the business’s stock in a transaction that occurred on Wednesday, July 29th. The stock was sold at an average price of $264.33, for a total transaction of $109,961.28. Following the transaction, the chief accounting officer owned 3,824 shares of the company’s stock, valued at $1,010,797.92. The trade was a 9.81% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, Director David A. Ricks acquired 10,000 shares of the company’s stock in a transaction on Thursday, June 25th. The stock was acquired at an average price of $194.51 per share, for a total transaction of $1,945,100.00. Following the purchase, the director directly owned 17,655 shares of the company’s stock, valued at approximately $3,434,074.05. This trade represents a 130.63% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. 0.20% of the stock is currently owned by corporate insiders.

Institutional Trading of Adobe

A number of hedge funds have recently made changes to their positions in the business. Compound Planning Inc. grew its stake in Adobe by 52.3% in the 4th quarter. Compound Planning Inc. now owns 5,181 shares of the software company’s stock valued at $1,813,000 after buying an additional 1,779 shares during the last quarter. Axxcess Wealth Management LLC lifted its position in Adobe by 46.5% during the fourth quarter. Axxcess Wealth Management LLC now owns 3,224 shares of the software company’s stock worth $1,128,000 after acquiring an additional 1,024 shares during the last quarter. Corient Private Wealth LLC boosted its holdings in shares of Adobe by 89.6% during the fourth quarter. Corient Private Wealth LLC now owns 430,537 shares of the software company’s stock worth $150,684,000 after acquiring an additional 203,494 shares during the period. Strive Financial Group LLC bought a new stake in shares of Adobe during the fourth quarter worth approximately $2,535,000. Finally, Blue Sparrow LLC DE acquired a new position in shares of Adobe in the fourth quarter valued at approximately $17,500,000. 81.79% of the stock is owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several equities research analysts have commented on ADBE shares. Freedom Capital cut shares of Adobe from a “strong-buy” rating to a “hold” rating in a research report on Friday, June 12th. Piper Sandler decreased their price objective on Adobe from $280.00 to $240.00 and set a “neutral” rating for the company in a report on Friday, June 12th. Weiss Ratings raised Adobe from a “sell (d)” rating to a “sell (d+)” rating in a research report on Tuesday, September 1st. Dbs Bank lowered Adobe from a “moderate buy” rating to a “hold” rating in a report on Tuesday, May 19th. Finally, JPMorgan Chase & Co. reduced their price target on Adobe from $420.00 to $340.00 and set an “overweight” rating for the company in a research report on Friday, June 12th. Seven equities research analysts have rated the stock with a Buy rating, twenty-one have given a Hold rating and five have issued a Sell rating to the company’s stock. According to MarketBeat, the company presently has an average rating of “Hold” and a consensus price target of $283.52.

Adobe Company Profile

Adobe Inc (NASDAQ:ADBE) develops software and services used for digital content creation, document management and digital experiences. The company serves creative professionals, marketers, enterprises, educators and consumers worldwide through subscription-based and cloud-enabled products.

Adobe’s Creative Cloud portfolio includes applications such as Photoshop, Illustrator, InDesign, Premiere Pro and After Effects, along with related tools for photography, graphic design, video production and web development.