third quarter FY2026
Filed Sep 10, 2026Adobe Reports Record Q3 Results
Adobe reported record revenue of $6.76 billion, 13% year-over-year growth, alongside double-digit GAAP and non-GAAP diluted EPS growth, record cash flows from operations of $2.52 billion, subscription-revenue growth across both Customer Groups, and raised FY2026 revenue and EPS targets.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $6.76 billion | – | 13% |
| Total revenue constant-currency growthother | 12% | – | 12% |
| Subscription revenueGAAP | $6,582 million | – | – |
| Product revenueGAAP | $67 million | – | – |
| Services and other revenueGAAP | $111 million | – | – |
| Total cost of revenueGAAP | $763 million | – | – |
| Gross profitGAAP | $5,997 million | – | – |
| Research and development expenseGAAP | $1,288 million | – | – |
| Sales and marketing expenseGAAP | $1,827 million | – | – |
| General and administrative expenseGAAP | $488 million | – | – |
| Amortization of intangiblesGAAP | $40 million | – | – |
| Total operating expensesGAAP | $3,643 million | – | – |
| Operating incomeGAAP | $2.35 billion | – | – |
| Operating incomenon-GAAP | $2.97 billion | – | – |
| Interest expenseGAAP | $(66) million | – | – |
| Investment gains (losses), netGAAP | $21 million | – | – |
| Income before income taxesGAAP | $2,357 million | – | – |
| Provision for income taxesGAAP | $530 million | – | – |
| Effective income tax rateGAAP | 22.5% | – | – |
| Effective income tax ratenon-GAAP | 18.0% | – | – |
| Net incomeGAAP | $1.83 billion | – | – |
| Net incomenon-GAAP | $2.42 billion | – | – |
| Diluted net income per shareGAAP | $4.62 | – | – |
| Diluted net income per sharenon-GAAP | $6.13 | – | – |
| Shares used to compute diluted net income per shareGAAP | 395 million | – | – |
| Total Adobe ARR exiting the quarterother | $27.50 billion | – | – |
| Remaining Performance Obligations exiting the quarterother | $22.16 billion | – | – |
| Current Remaining Performance Obligations exiting the quarterother | 67% | – | – |
| Adobe AI-first ARR growthother | more than 150% | – | more than 150% |
| Monthly active users across creativity and productivity solutionsother | more than one billion | – | – |
| Net cash provided by operating activitiesGAAP | $2.52 billion | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Business Professionals & Consumers subscription revenueAdobe cited an expanding user base through a freemium strategy and deeper engagement with agentic experiences. | $1.91 billion | – | 16% |
| Creative & Marketing Professionals subscription revenueAdobe cited AI innovation, expanding customer reach and leadership across creativity, productivity and customer experience. | $4.65 billion | – | 13% |
fourth quarter FY2026 and FY2026 outlook
- RevenueFourth quarter FY2026 total revenue: $6.80 billion to $6.85 billion; FY2026 total revenue: $26.576 billion to $26.626 billion
- Tax rateFourth quarter FY2026 GAAP tax rate: ~22.0%; fourth quarter FY2026 non-GAAP tax rate: ~18.0%; FY2026 GAAP tax rate: ~22.5%; FY2026 non-GAAP tax rate: ~18.0%
- NoteFourth quarter FY2026 Business Professionals & Consumers subscription revenue: $1.93 billion to $1.95 billion
- NoteFourth quarter FY2026 Creative & Marketing Professionals subscription revenue: $4.665 billion to $4.695 billion
- NoteFourth quarter FY2026 GAAP diluted net income per share: $4.65 to $4.70
- NoteFourth quarter FY2026 non-GAAP diluted net income per share: $6.30 to $6.35
- NoteFourth quarter FY2026 GAAP operating margin: 34.0%
- NoteFourth quarter FY2026 non-GAAP operating margin: 44.0%
- NoteFourth quarter FY2026 diluted share count: ~389 million
- NoteFY2026 Business Professionals & Consumers subscription revenue: $7.470 billion to $7.490 billion
- NoteFY2026 Creative & Marketing Professionals subscription revenue: $18.242 billion to $18.272 billion
- NoteFY2026 total Adobe ending ARR growth: 10.2% year over year
- NoteFY2026 GAAP diluted net income per share: $18.12 to $18.17
- NoteFY2026 non-GAAP diluted net income per share: $24.45 to $24.50
- NoteFY2026 GAAP operating margin: 35.0%
- NoteFY2026 non-GAAP operating margin: 45.0%
- NoteFY2026 diluted share count: ~400 million
Capital returns
- Adobe repurchased approximately 9.5 million shares during the quarter.
- Repurchases of common stock were $(2,232) million.
What drove it
- Total Customer Group subscription revenue was $6.56 billion, representing 14% year-over-year growth, or 13% in constant currency.
- Business Professionals & Consumers subscription revenue was $1.91 billion, representing 16% year-over-year growth, or 15% in constant currency.
- Creative & Marketing Professionals subscription revenue was $4.65 billion, representing 13% year-over-year growth, or 12% in constant currency.
- Adobe AI-first ARR grew more than 150% year over year.
- Adobe achieved more than one billion monthly active users across creativity and productivity solutions.
Concerns
- Product revenue was $67 million, compared with $68 million.
- Services and other revenue was $111 million, compared with $129 million.
- Total cost of revenue was $763 million, compared with $642 million.
- Total operating expenses were $3,643 million, compared with $3,173 million.
- Cash and cash equivalents at end of period were $4,359 million, compared with $4,982 million.
What to watch
- Fourth quarter FY2026 total revenue target of $6.80 billion to $6.85 billion.
- Fourth quarter FY2026 Business Professionals & Consumers subscription revenue target of $1.93 billion to $1.95 billion.
- Fourth quarter FY2026 Creative & Marketing Professionals subscription revenue target of $4.665 billion to $4.695 billion.
- FY2026 total Adobe ending ARR growth target of 10.2% year over year.
- Fourth quarter FY2026 non-GAAP operating margin target of 44.0% and FY2026 non-GAAP operating margin target of 45.0%.
- Development and use of AI, macroeconomic conditions, fluctuations in foreign currency exchange rates, strategic investments, and fluctuations in revenue recognition from subscription offerings.
Balance sheet and cash flow
- Cash and cash equivalents were $4,359 million as of August 28, 2026, compared with $5,431 million as of November 28, 2025.
- Short-term investments were $1,280 million as of August 28, 2026, compared with $1,164 million as of November 28, 2025.
- Current debt was $1,597 million as of August 28, 2026, compared with — as of November 28, 2025.
- Long-term debt was $4,766 million as of August 28, 2026, compared with $6,210 million as of November 28, 2025.
- Net cash provided by operating activities was $2,523 million, compared with $2,198 million.
- Purchases of property and equipment were $(85) million, compared with $(72) million.
- Net cash used for investing activities was $(668) million, compared with $(279) million.
- Net cash used for financing activities was $(2,415) million, compared with $(1,876) million.
- Repayment of debt was $(250) million.
- Cash and cash equivalents at end of period were $4,359 million, compared with $4,982 million.
Analysis
Adobe reported record third-quarter FY2026 revenue of $6.76 billion, up 13% year over year and 12% in constant currency. Subscription revenue was $6,582 million versus $5,791 million, while product revenue was $67 million versus $68 million and services and other revenue was $111 million versus $129 million. The result was led by Customer Group subscription revenue of $6.56 billion, up 14% year over year, with Business Professionals & Consumers growing 16% and Creative & Marketing Professionals growing 13%.
Profitability increased from the prior-year period. GAAP operating income was $2.35 billion versus $2,173 million, and non-GAAP operating income was $2.97 billion versus $2,773 million. GAAP net income was $1.83 billion versus $1,772 million, while non-GAAP net income was $2.42 billion versus $2,252 million. GAAP diluted EPS was $4.62 versus $4.18 and non-GAAP diluted EPS was $6.13 versus $5.31. Total operating expenses were $3,643 million compared with $3,173 million, including higher research and development, sales and marketing, and general and administrative expense.
Adobe highlighted AI-led adoption and reach indicators. Adobe AI-first ARR grew more than 150% year over year, total Adobe ARR exiting the quarter was $27.50 billion, and RPO was $22.16 billion with cRPO of 67%. The company also reached more than one billion monthly active users across creativity and productivity solutions. Management attributed the expanded user base to a freemium strategy and cited agentic experiences as a means to deepen engagement.
Cash generation was a further strength, with record cash flows from operations of $2.52 billion, compared with $2,198 million. Adobe repurchased approximately 9.5 million shares during the quarter, with repurchases of common stock of $(2,232) million, and repaid $(250) million of debt. Cash and cash equivalents ended the period at $4,359 million, while current debt was $1,597 million and long-term debt was $4,766 million.
The outlook calls for fourth-quarter FY2026 total revenue of $6.80 billion to $6.85 billion and non-GAAP diluted EPS of $6.30 to $6.35. For FY2026, Adobe raised its targets to total revenue of $26.576 billion to $26.626 billion, GAAP diluted EPS of $18.12 to $18.17, and non-GAAP diluted EPS of $24.45 to $24.50. The FY2026 outlook assumes non-GAAP operating margin of 45.0%, GAAP tax rate of approximately 22.5%, non-GAAP tax rate of approximately 18.0%, and diluted share count of approximately 400 million.
Management, verbatim
Adobe delivered record Q3 results, reflecting the strength of our AI innovation, expanding customer reach and leadership across creativity, productivity and customer experience.
Shantanu Narayen, chair and CEO, Adobe
Adobe delivered double-digit revenue and EPS growth in Q3 and we're raising full year revenue and EPS targets.
Steve Day, senior vice president and interim CFO, Adobe
Not in the filing
stated, not guessed- Previous-release outlook and prior-guidance comparison
- Free cash flow
- Dividend declaration or payment
- Q3 GAAP gross margin
- Q3 non-GAAP operating margin
- Quarter-over-quarter total revenue growth
- Quarter-over-quarter Customer Group subscription revenue growth
- Prior-year and prior-quarter ARR
- Prior-year and prior-quarter RPO and cRPO
- Prior-year and prior-quarter monthly active users
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.