Adobe (ADBE) Financial Results Summary
QuoteReporter
Adobe (ADBE) Q3 2026: Record Revenue and EPS Growth — Strongly Positive
Adobe (Nasdaq: ADBE) reported impressive financial results for its third quarter of fiscal year 2026, showcasing significant growth across key metrics. The company achieved record revenue of $6.76 billion, reflecting a $768 million increase or 13% year-over-year growth. This performance is a clear indicator of Adobe's robust business momentum, particularly in the context of its AI-driven initiatives.
Key Financial Metrics
- Revenue: $6.76 billion, up $768 million or +13% YoY
- Diluted EPS: $4.62 (GAAP), $6.13 (non-GAAP)
- Operating Income: $2.35 billion (GAAP), $2.97 billion (non-GAAP)
- Net Income: $1.83 billion (GAAP), $2.42 billion (non-GAAP)
- Cash Flows from Operations: $2.52 billion
- Annualized Recurring Revenue (ARR): $27.50 billion
Analyst Opinion
This quarter is undoubtedly a strong one for shareholders. The 13% revenue growth and diluted EPS of $4.62 (up from $4.18 in Q3 FY2025) demonstrate Adobe's effective execution of its growth strategy, particularly in expanding its customer base and enhancing user engagement through innovative AI solutions. The increase in cash flows from operations to $2.52 billion further underscores the company's operational efficiency and financial health.
Moreover, Adobe's achievement of 1 billion monthly active users across its creativity and productivity solutions marks a significant milestone, indicating strong market penetration and user adoption. The company's commitment to a freemium strategy is likely to deepen engagement and drive long-term growth.
Shareholder Returns and Guidance
Adobe also announced a share repurchase of approximately 9.5 million shares during the quarter, reflecting its confidence in the business and commitment to returning value to shareholders.
Looking ahead, Adobe has raised its full-year revenue and EPS targets:
- Updated FY2026 Revenue Target: $26.576 billion to $26.626 billion
- Updated FY2026 EPS Target: GAAP: $18.12 to $18.17, Non-GAAP: $24.45 to $24.50
For the upcoming fourth quarter, Adobe anticipates total revenue between $6.80 billion and $6.85 billion, with diluted EPS expected to range from $4.65 to $4.70 (GAAP) and $6.30 to $6.35 (non-GAAP).
Forward Catalysts
Investors should closely monitor Adobe's continued execution of its AI-first strategy and the impact of its freemium model on user engagement and subscription growth. Additionally, the upcoming fourth quarter results will be critical in assessing whether Adobe can maintain its growth trajectory and meet its elevated guidance. The market will also be keen to see how the company navigates potential macroeconomic challenges while sustaining its innovation momentum.
In summary, Adobe's Q3 FY2026 results reflect a strong performance that not only meets but exceeds expectations, positioning the company favorably for future growth and shareholder value creation.
Condensed Consolidated Statements of Income
(In millions, except per share data; unaudited)
Note: All amounts are in thousands.
| Three Months | August 28, 2026 | August 29, 2025 | Nine Months | August 28, 2026 | August 29, 2025 | |
|---|---|---|---|---|---|---|
| Revenue | ||||||
| Subscription | $ 6,582 | $ 5,791 | $ 19,196 | $ 16,915 | ||
| Product | 67 | 68 | 246 | 251 | ||
| Service and other | 111 | 129 | 334 | 409 | ||
| Total revenue | 6,760 | 5,988 | 19,776 | 17,575 | ||
| Cost of revenue | ||||||
| Subscription | 633 | 510 | 1,759 | 1,505 | ||
| Product | 5 | 5 | 16 | 17 | ||
| Service and other | 125 | 127 | 367 | 380 | ||
| Total cost of revenue | 763 | 642 | 2,142 | 1,902 | ||
| Gross profit | 5,997 | 5,346 | 17,634 | 15,673 | ||
| Operating expenses | ||||||
| Research and development | 1,288 | 1,088 | 3,596 | 3,196 | ||
| Sales and marketing | 1,827 | 1,639 | 5,419 | 4,760 | ||
| General and administrative | 488 | 408 | 1,497 | 1,152 | ||
| Amortization of intangible assets | 40 | 38 | 112 | 120 | ||
| Total operating expenses | 3,643 | 3,173 | 10,624 | 9,228 | ||
| Operating income | 2,354 | 2,173 | 7,010 | 6,445 | ||
| Non-operating income (expense) | ||||||
| Interest expense | -66 | -67 | -194 | -197 | ||
| Investment gains (losses), net | 21 | 23 | 44 | 31 | ||
| Other income (expense), net | 48 | 58 | 157 | 191 | ||
| Total non-operating income | 3 | 14 | 7 | 25 | ||
| Income before income taxes | 2,357 | 2,187 | 7,017 | 6,470 | ||
| Provision for income taxes | 530 | 415 | 1,589 | 1,196 | ||
| Net income | $ 1,827 | $ 1,772 | $ 5,428 | $ 5,274 | ||
| Basic net per share | $ 4.63 | $ 4.18 | $ 13.48 | $ 12.28 | ||
| Shares used to compute basic net income per share | 395 | 423 | 403 | 429 | ||
| Diluted net income per share | $ 4.62 | $ 4.18 | $ 13.47 | $ 12.26 | ||
| Shares used to compute diluted net income per share | 395 | 424 | 403 | 430 |
Condensed Consolidated Balance Sheets
(In millions; unaudited)
Note: All amounts are in millions.
| August 28, 2026 | November 28, 2025 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 4,359 | $ 5,431 |
| Short-term investments | 1,280 | 1,164 |
| Trade receivables, net of allowances for doubtful accounts of $12 and $13, respectively | 2,081 | 2,344 |
| Prepaid expenses and other current assets | 1,438 | 1,224 |
| Total current assets | 9,158 | 10,163 |
| Property and equipment, net | 1,870 | 1,873 |
| Operating lease right-of-use assets, net | 286 | 312 |
| Goodwill | 14,037 | 12,857 |
| Other intangibles, net | 956 | 495 |
| Deferred income taxes | 1,928 | 2,186 |
| Other assets | 1,746 | 1,610 |
| Total assets | $ 29,981 | $ 29,496 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Trade payables | $ 529 | $ 417 |
| Accrued expenses and other current liabilities | 2,516 | 2,648 |
| Debt | 1,597 | — |
| Deferred revenue | 7,094 | 6,905 |
| Income taxes payable | 63 | 153 |
| Operating lease liabilities | 89 | 77 |
| Total current liabilities | 11,888 | 10,200 |
| Long-term liabilities: | ||
| Debt | 4,766 | 6,210 |
| Deferred revenue | 110 | 125 |
| Income taxes payable | 567 | 469 |
| Operating lease liabilities | 310 | 361 |
| Other liabilities | 576 | 508 |
| Total liabilities | 18,217 | 17,873 |