Adobe Inc.

Adobe reported Q3 revenue of $6.76 billion, up 13% as reported and 12% in constant currency. GAAP EPS was $4.62, up 11% year over year, and non-GAAP EPS was $6.13, up 15%. Total Adobe ending ARR was $27.5 billion, up 11.2% year over year; total customer group subscription revenue was $6.56 billion, up 14% reported or 13% in constant currency; RPO was $22.16 billion, up 8%; and cash from operations was a Q3 record $2.52 billion. For Q4, Adobe guided to revenue of $6.8 billion to $6.85 billion, GAAP EPS of $4.65 to $4.70, and non-GAAP EPS of $6.30 to $6.35. For FY2026, it raised guidance to revenue of $26.576 billion to $26.626 billion and non-GAAP EPS of $24.45 to $24.50, while targeting full-year total Adobe ending ARR book-of-business growth of 10.2% year over year.

Shantanu Narayen said Adobe’s long-term opportunity is to use AI to expand its reach across creativity, productivity, and customer experience, and he repeatedly tied that vision to the company’s move into agentic software. He highlighted the scale of Adobe’s installed base, including more than 1 billion monthly active users across businesses, and said AI-first ending ARR now exceeds $650 million, up more than 150% year over year. His tone was confident and reflective, while also framing Anil Chakravarthy’s incoming leadership as a continuation of Adobe’s transformation rather than a reset.

Interim CFO Steven Day emphasized that Q3 was a record revenue quarter at $6.76 billion and a record cash-from-operations quarter at $2.52 billion. He cited total ending ARR of $27.5 billion, RPO of $22.16 billion, and cash and short-term investments of $5.64 billion, while noting repurchases of approximately 9.5 million shares and about $24.55 billion remaining under the April 2026 authorization. On margins and tax, he guided Q4 non-GAAP operating margin to approximately 44% and FY2026 non-GAAP operating margin to approximately 45%, with a non-GAAP tax rate of approximately 18% for both periods.

Analysts focused heavily on agentic software, asking how central it would become to Adobe’s strategy and how the company plans to compete technically and commercially. Management said agentic software is a major strategic opportunity, with focus on user interface flexibility, model choice, enterprise context, and value realization through Adobe’s apps and workflows. Questions also centered on RPO softness, net new ARR, freemium trade-offs, and the pause in pricing optimization; management said RPO/CRPO trends were consistent with ARR patterns and seasonality, freemium is intentionally driving user acquisition first, and pricing will be calibrated as users show value and readiness to convert.