Adobe Inc. is a software company that provides innovative platforms and tools for creativity, productivity, and personalized customer experiences. Its solutions, which are increasingly powered by AI, span digital media products like Creative Cloud and Acrobat, and digital experience offerings for marketing professionals, enabling content creation, management, and delivery across various channels.
Business segments
10-K
Digital MediaDigital ExperiencePublishing and Advertising
Recent News
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Earnings call: Q2 FY2026 FY2026
Intel
Free
Jun 11, 2026Confident
Shantanu Narayen (Chairman and Chief Executive Officer), John Murphy (Executive Vice President and Chief Financial Officer)
Key metrics
Adobe reported record Q2 FY2026 revenue of $6.62 billion, growing 13% year over year as reported and 11% in constant currency.[1] GAAP diluted EPS was $4.25 and non-GAAP EPS was $5.96, both above market forecasts, with non-GAAP EPS up 18% year over year.[1] Total ending ARR reached $27.1 billion, growing 12.5% year over year, including approximatel
Forward guidance
Management guided for Q3 FY2026 total Adobe revenue of $6.67 billion to $6.72 billion, with continued strength expected in creative and marketing professional subscriptions as well as business professionals and consumer subscriptions.[1] They forecast GAAP EPS of $4.40 to $4.45 and non-GAAP EPS of $6.05 to $6.10, with AI-first and freemium models h
Notable Q&A
In the Q&A, analysts focused on AI monetization and the integration of Semrush into Adobe’s product and financial model.[1] Management responded that AI was a significant tailwind for the enterprise business and emphasized that the Semrush acquisition was already contributing roughly $480 million to
Surprise items
The company beat Q2 FY2026 EPS forecasts with non-GAAP EPS of $5.96 versus expectations of $5.82 and delivered record revenue of $6.62 billion.[1] Despite the strong results and AI-driven demand, the stock dipped following the call, reflecting investor sensitivity to guidance and the impact of a $70
(Apr 15, 2026) · (Mar 26, 2026) ·
Fundamentals
Signal
52-week high / low
$376.16 / $190.12
Forward P/E
8.0×
Trailing 13.2×
Dividend
—
Analysts covering
33
Avg target $272.48
Beta
1.43
vs. S&P 500
Short interest
5.5%
Float shorted
Buy
28%
Hold
62%
Sell
10%
Wall Street consensus — sourced weekly via public disclosures
Analyst coverage data sourced from public filings. Xavier analyst thesis summary available after weekly Perplexity scan completes.
Adobe trades at a compelling 12.8x TTM P/E and 8.1x forward P/E — cheap for a high-quality franchise — but the stock sits 40% below its 52-week high with no near-term catalyst until the September 2026 earnings report, and the BofA Underperform initiation at $190 (July 7) introduces a credible structural bear thesis around insufficient AI monetization. The recent HSBC upgrade to Buy ($308 target) and record Q2 results with 13% revenue growth demonstrate fundamental resilience, but the market is clearly in 'show me' mode on AI-driven growth acceleration, making a 5-day directional call difficult with high conviction in either direction.
Strongest bull case
Adobe posted record Q2 revenue of $6.62B (13% YoY growth), beat EPS estimates ($5.96 vs. $5.60), raised full-year FY26 guidance, and carries $27.1B in ARR with 97% subscription revenue — suggesting the AI disruption narrative is overstated and the stock is materially undervalued at 8x forward earnings.
Strongest bear case
BofA just reinstated with Underperform and a $190 price target (July 7) citing 'structurally slower growth and insufficient evidence of substantial AI monetization' — this is a credible, specific bear thesis from a top-tier institution, and with the stock already 40% off its 52-week high and volume running at half of average, there is no clear buying catalyst in the next 5 trading days to close the gap to the $272 consensus target.
What the market may be missing
The CFO departure (Dan Durn, effective June 15) coinciding with a record earnings print may be more significant than the market has priced in — leadership transitions at the CFO level during a critical AI monetization pivot period introduce execution risk and potential strategy discontinuity that is not reflected in the analyst consensus, which was largely set prior to the transition.
Shantanu Narayen discussed the impacts of artificial intelligence on software, emphasizing that bears have it wrong on software's future. He highlighted Adobe's focus on enhancing customer experience through AI and creative cloud innovations. Forward
Shantanu Narayen and Jensen Huang discussed collaboration between Adobe and NVIDIA on AI technologies. They explored how generative AI is transforming creative workflows and software industries. Strategic themes included accelerating innovation throu
ConferenceMar 01, 2026
Adobe Summit Day 1 Keynote - Human Ingenuity Source ↗
Mr. Shantanu Narayen (CEO) · Adobe Summit
Narayen and Huang shared personal origin stories, highlighting human ingenuity in tech innovation. The discussion tied personal journeys to current AI advancements at Adobe and NVIDIA. Forward-looking insights focused on the role of creativity in AI-
CEO letter to shareholders
Signal
No shareholder letter on file for ADBE
Some companies file their annual report without a separate CEO letter.
When available, Xavier extracts strategic themes, tone analysis, and
forward-looking statements to help you read between the lines.
Executive compensation
Signal
Name
Title
Total compensation
Shantanu Narayen
Chair of the Board and CEO
$51,173,935
Daniel Durn
CFO AND EXECUTIVE VICE PRESIDENT, FINANCE, TECHNOLOGY, SECURITY AND OPERATIONS
$16,302,026
Anil Chakravarthy
PRESIDENT, CUSTOMER EXPERIENCE ORCHESTRATION BUSINESS
$17,790,824
David Wadhwani
PRESIDENT, CREATIVITY AND PRODUCTIVITY BUSINESS
$17,786,584
Louise Pentland
CHIEF LEGAL OFFICER AND EXECUTIVE VICE PRESIDENT, LEGAL AND GOVERNMENT RELATIONS
4 agreements contain cross-default provisions — a covenant breach on one facility may trigger default on others.
Xavier risk radar
Pro
Covenant headroom
Low leverage — no covenants required
Earnings quality
High quality (cash conversion 1.4x)
Risk trend
Risk increasing — Failure to innovate or compete effectively in the rapidly evolving AI landscape
Mgmt narrative
Management tone: Cautiously optimistic
Analyst drift
Consensus Hold — watch for drift
Insider sentiment
Pattern detection — 90 days needed
Signal history
Signal
Date
Direction
Conf.
Agree.
Thesis
Price
Type
Jul 12, 2026
NEUTRAL
6.1/10
75%
Adobe trades at a compelling 12.8x TTM P/E and 8.1x forward P/E — cheap for a high-quality franchise...
$223.64
Sched.
Jul 11, 2026
NEUTRAL
6.3/10
75%
Adobe screens optically cheap on trailing and forward earnings versus large-cap software, and the st...
$223.64
Sched.
Jun 07, 2026
NEUTRAL
6.2/10
50%
ADBE trades at ~14.7x TTM P/E and ~9.5x forward P/E — deeply discounted for a company delivering mid...
$251.44
Sched.
May 31, 2026
NEUTRAL
6.6/10
50%
ADBE is bouncing sharply off its 52-week lows after a brutal 40%+ drawdown, with a compelling forwar...
$259.21
Sched.
May 24, 2026
NEUTRAL
7.0/10
67%
Adobe screens inexpensive on earnings multiples versus large-cap software, but the stock is trading ...
$244.76
Sched.
May 17, 2026
NEUTRAL
6.1/10
100%
ADBE trades at a deeply discounted forward P/E of ~9.4x, which appears superficially compelling, but...
$247.60
Sched.
May 10, 2026
BULLISH
6.9/10
67%
ADBE screens optically cheap on earnings multiples versus large-cap software, and it trades far belo...
$253.04
Sched.
May 03, 2026
BULLISH
7.3/10
75%
ADBE trades at a forward P/E of ~9.5x — deeply compressed for a business posting 12% revenue growth,...
$250.71
Sched.
Apr 12, 2026
BULLISH
7.2/10
75%
ADBE is trading near a 52-week low of $224.13 — essentially at technical support — despite posting r...
$225.35
Sched.
Showing last 9 signals
ADBEAdobe Inc.
Signal
FY2026 annual report (10-K filed 2026-01-15)
INCOME STATEMENT
?Revenue
$23,769 million11% YoY
Total sales from software licenses, cloud services, hardware, and subscriptions. Up 11% from last year.
?Operating income
$8,706 million
What remains after subtracting all operating costs — salaries, materials, rent, R&D — from revenue. This is the profit from actually running the business, before interest and taxes. Operating margin is 36.6%, meaning 37 cents of every dollar of revenue becomes operating profit.
?Net income
$7,130 million
The bottom line — what the company actually earned after all expenses, interest, and taxes. This is the number that gets divided by shares outstanding to calculate earnings per share (EPS), which directly affects the stock price. Net margin is 25.9%.
?Free cash flow
$9,852 million
Operating cash flow minus capital expenditure. This is the money available for dividends, share buybacks, debt repayment, or acquisitions. Free cash flow is what many professional investors consider the truest measure of financial health.
?EPS (diluted)
$4.25
Earnings per share — net income divided by total shares outstanding (including stock options and convertible bonds that could become shares). This is the single number most investors watch because it directly connects company profits to your ownership stake.
BALANCE SHEET
?Total assets
$29.9B
Everything the company owns — cash, factories, equipment, patents, inventory, investments. Includes intellectual property, data centers, patents, and acquired technology.
?Cash & equivalents
$5,431 million
Money available right now — bank accounts, money market funds, short-term government bonds. This is the company's financial cushion. More cash means more flexibility to invest, acquire, or survive a downturn without borrowing.
?Total debt
$6,210 million
All money the company owes — bonds, bank loans, credit facilities. Compare this to cash to understand the net debt position. The company holds $5,431 million in cash against this debt.
?Shares outstanding
410.5 million
Total number of shares that exist — owned by all investors, insiders, and institutions combined. When the company reports EPS, this is the denominator. Share buybacks reduce this number, which increases EPS even without earnings growth.
?Debt-to-equity ratio
0.4%
How much debt the company uses for every dollar of shareholder equity. Under 100% means more equity than debt (conservative). Over 200% means heavy leverage. Banks and utilities naturally run higher ratios.
CASH FLOW
?Operating cash flow
$5.1B
Actual cash generated from running the business — not accounting profits, real money coming in the door. This is more trustworthy than net income because it's harder to manipulate. A company can report profits but still run out of cash.
?Capital expenditure
$95M
Money spent on long-term assets — data centers, server infrastructure, and R&D facilities. This is the cost of maintaining and growing the business.
?Free cash flow
$5.0B
Operating cash flow minus capital expenditure. This is the money available for dividends, share buybacks, debt repayment, or acquisitions. Free cash flow is what many professional investors consider the truest measure of a company's financial health.
?Depreciation & amortization
$367M
A non-cash expense that spreads the cost of servers, data center equipment, and acquired technology over their useful life. This reduces reported income but no cash actually leaves the company — that's why it gets added back to calculate EBITDA and operating cash flow.
EARNINGS QUALITY
?Accrual quality
HIGH
Measures how well reported earnings match actual cash generation. HIGH means earnings are backed by real cash. LOW means the company may be using accounting techniques to inflate reported numbers. Professional investors check this before trusting EPS.
?Recurring revenue
96%
96% of revenue comes from repeat sources — ongoing contracts, subscriptions, or regular customer purchasing patterns rather than one-time sales. Higher recurring revenue means more predictable future earnings.
?Cash conversion
1.4x
Operating cash flow divided by net income. Above 1.0x means the company generates more cash than it reports in profits — a sign of high-quality earnings. At 1.4x, the company is generating significantly more cash than reported profits — very healthy.
?Management tone
Cautious Optimistic
How management sounds in their SEC filings — are they confident, cautious, or defensive? This is analyzed from the actual language used in the 10-K annual report. A shift in tone from prior years can signal changing conditions before the numbers reflect it.
?Top risk factor
Increasing
Failure to innovate or compete effectively in the rapidly evolving AI landscape could materially harm business and financial results, including reputational damage and increased liability. Risk trend: increasing. This is the single biggest threat to the company's future earnings as identified in their SEC filing.
Click any row to expand the plain-English explanation. Source: SEC EDGAR XBRL filings.
Capital intelligence
Signal
Weighted Average Cost of Capital · Return on Invested Capital · Economic Value Added
ROIC
60.99%
WACC
11.72%
🟢 VALUE CREATOR — EVA Spread: 49.27%
?WACC
11.72%
Weighted Average Cost of Capital — the minimum return Adobe Inc. must earn on its investments to satisfy both debt holders and shareholders. Computed from a 94.81% equity / 5.19% debt capital structure. If the company earns less than 11.72% on its invested capital, it is destroying shareholder value.
?Cost of equity
12.13%
The return shareholders demand for holding ADBE stock instead of a risk-free Treasury bond. Computed using the Capital Asset Pricing Model: Risk-Free Rate (4.25%) + Beta (1.43) × Equity Risk Premium (5.50%). A beta of 1.43 means ADBE is more volatile than the overall market.
?Cost of debt (after-tax)
4.21%
What Adobe Inc. effectively pays on its borrowed money after the tax deduction on interest. Interest is tax-deductible, so the true cost is lower than the stated rate. Effective tax rate used: 23.50%.
?Capital structure
E: 94.81% / D: 5.19%
How Adobe Inc. finances its operations — the split between equity (stock market value: $87.8B) and debt (total borrowings: $4.8B). More debt means more leverage — higher potential returns but higher risk.
?ROIC
60.99%
Return on Invested Capital — how efficiently Adobe Inc. turns its total invested capital into after-tax operating profit. NOPAT ($7.0B) ÷ Invested Capital ($11.4B). This exceeds WACC, meaning the company creates value for shareholders.
?EVA
$5.6B
Economic Value Added — the dollar amount of value Adobe Inc. created (or destroyed) above its cost of capital. NOPAT ($7.0B) minus the capital charge (Invested Capital × WACC = $1.3B). Positive EVA means every dollar of capital is earning more than it costs.
?NOPAT
$7.0B
Net Operating Profit After Tax — operating income adjusted for taxes, ignoring how the company is financed. Operating Income ($9.1B) × (1 - Tax Rate 23.50%). This isolates the company's core business profitability from its financing decisions.
Xavier consensus signals are intelligence outputs, not investment advice. All signals are generated by a multi-model AI system and reflect public information at time of generation. Past signal accuracy does not guarantee future performance. Wall Street analyst consensus sourced from public disclosures, summarized weekly. Financial data sourced from SEC EDGAR and yfinance. Insider transactions sourced from SEC EDGAR Form 4 filings. Updated Jul 12, 2026.