Latest quarter
Adobe reported Q3 FY2026 revenue of $6.8 billion, up 12.9% from $6.0 billion a year earlier. Revenue exceeded the consensus of $6.7 billion, while adjusted EPS of $6.13 exceeded the consensus of $6.08.
The company reported diluted EPS of $4.62, compared with $4.18 in Q3 FY2025. Gross margin was 88.7%, versus 89.3% a year earlier, while operating margin was 34.8%, compared with 36.3%. Adobe reported free cash flow of $2.4 billion, up from $2.1 billion a year earlier.
The filing said subscription revenue grew 14% year over year, with Creative & Marketing Professionals supported by Creative Cloud flagship apps, Adobe Experience Manager and agentic web apps, including Semrush, while Business Professionals & Consumers was supported by Acrobat. Adobe reported that Q3 revenue of $6.8 billion was above its own guidance of $6.7 billion to $6.7 billion.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $6.8 billion | $6.0 billion | 12.9% |
| Diluted EPS | $4.62 | $4.18 | 10.5% |
| Gross margin | 88.7% | 89.3% | −0.6 percentage points |
| Operating margin | 34.8% | 36.3% | −1.5 percentage points |
| Free cash flow | $2.4 billion | $2.1 billion | 14.7% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $6.13 | $6.08 | Beat by 0.82% |
| Revenue | $6.8 billion | $6.7 billion | Beat by 1.02% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
| Against its own guidance | For | Guided | Reported | Result |
|---|---|---|---|---|
| Revenue | Q3 FY2026 | $6.7 billion–$6.7 billion | $6.8 billion | Above the guide |
What management said on the call
Shantanu Narayen said Adobe’s total ARR reached $27.50 billion at the end of Q3, growing 11.2% year over year, and attributed the increase to Creative Cloud flagship apps, Acrobat, Adobe Experience Manager and agentic web apps, including Semrush. He said AI-first ending ARR exceeded $650 million and grew more than 150% year over year.
Anil Chakravarthy said Business Professionals & Consumers subscription revenue was $1.91 billion, up 15% year over year, and that the group’s monthly active users exceeded 900 million. He said the company is expanding AI-powered applications and conversational and agentic interfaces across Adobe Reader, Acrobat and Express. Chakravarthy also said Creative & Marketing Professionals subscription revenue was $4.65 billion, up 12% year over year, and that Creative Freemium monthly active users surpassed 100 million.
Chakravarthy said Firefly ending ARR across the Firefly app and credit packs grew 40% quarter over quarter. He also said more than 20,000 global enterprises rely on Adobe, and CX Enterprise Coworker had over 1,700 customers and early adopters.
Steve Day said Q3 total customer-group subscription revenue grew 14% year over year and remaining performance obligations grew 8% year over year. He said Adobe repurchased approximately 9.5 million shares during the quarter and had approximately $24.55 billion remaining under its April 2026 authorization. Day said the company’s Q4 targets assume current macroeconomic conditions.
On the call, Narayen said Anil Chakravarthy will become Adobe’s next president and chief executive officer effective December 1, while Narayen will work with him during the transition as executive chair.
Guidance
Adobe raised its FY2026 total revenue target to $26.6 billion to $26.6 billion from $20.5 billion to $20.6 billion. The company raised its FY2026 Business Professionals and Consumers subscription-revenue target to $7.5 billion to $7.5 billion from $7.4 billion to $7.5 billion, and its Creative and Marketing Professionals subscription-revenue target to $18.2 billion to $18.3 billion from $18.2 billion to $18.3 billion.
Adobe raised its FY2026 GAAP EPS target to $18.12 to $18.17 from $17.90 to $18.00, and its non-GAAP EPS target to $24.45 to $24.50.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Tax rate, non-GAAP | FY2026 | 18.0% | — | New |
| Tax rate, GAAP | FY2026 | 22.5% | — | New |
| Operating margin, non-GAAP | FY2026 | 45.0% | — | New |
| EPS, non-GAAP | FY2026 | $24.45–$24.50 | — | New |
| EPS, GAAP | FY2026 | $18.12–$18.17 | — | New |
| Revenue, Creative and Marketing Professionals | FY2026 | $18.2 billion–$18.3 billion | — | New |
| Revenue, Business Professionals and Consumers | FY2026 | $7.5 billion–$7.5 billion | — | New |
| Revenue, Total Adobe | FY2026 | $26.6 billion–$26.6 billion | — | New |
| Tax rate, non-GAAP | Q4 FY2026 | 18.0% | — | New |
| Tax rate, GAAP | Q4 FY2026 | 22.0% | Q3 FY2026: 23.0% | Cut |
| Operating margin, non-GAAP | Q4 FY2026 | 44.0% | Q3 FY2026: 44.0% | Held |
| EPS, non-GAAP | Q4 FY2026 | $6.30–$6.35 | Q3 FY2026: $6.05–$6.10 | Raised |
| EPS, GAAP | Q4 FY2026 | $4.65–$4.70 | Q3 FY2026: $4.40–$4.45 | Raised |
| Revenue, Creative and Marketing Professionals | Q4 FY2026 | $4.7 billion–$4.7 billion | Q3 FY2026: $4.6 billion–$4.6 billion | Raised |
| Revenue, Total Adobe | Q4 FY2026 | $6.8 billion–$6.9 billion | — | New |
| Revenue | FY2026 | $20.5 billion–$20.6 billion | — | New |