Q3 FY2026 results
| Metric | Result | Change |
|---|---|---|
| Total Revenue | $6.76 billion | 12% year-over-year |
| GAAP EPS | $4.62 | 11% year-over-year |
| Non-GAAP EPS | $6.13 | 15% year-over-year |
| Total Ending ARR | $27.5 billion | 11.2% year-over-year |
| Business Professionals and Consumers Subscription Revenue | $1.91 billion | 15% year-over-year |
| Creative and Marketing Professionals Subscription Revenue | $4.65 billion | 12% year-over-year |
Guidance and outlook
- Q4 FY2026 total revenue target: $6.8 billion to $6.85 billion.
- Q4 FY2026 GAAP EPS target: $4.65 to $4.70.
- Q4 FY2026 non-GAAP EPS target: $6.30 to $6.35.
- Full Year FY2026 total revenue target: $26.576 billion to $26.626 billion.
- Full Year FY2026 GAAP EPS target: $18.12 to $18.17.
- Full Year FY2026 non-GAAP EPS target: $24.45 to $24.50.
How management sounded
Positive (+6 on our -10 to +10 scale). Management delivered solid growth, raised full-year guidance, and expressed strong conviction in their agentic AI strategy and leadership transition. Management sounded more upbeat than on 8% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Agentic AI Strategy
Asked: Matt Swanson (RBC Capital Markets) asked about the importance of 'agentic' software in the long-term strategy.
Answer: Anil Chakravarthy stated that Adobe aims to be the leader in agentic software for creativity, productivity, and customer experience, noting that customers want one product architecture, model flexibility, and the ability to use enterprise data without hallucinations.
CEO Transition
Asked: Saket Kalia (Barclays) asked if the choice of Anil Chakravarthy as CEO signals a shift toward digital experience focus.
Answer: Shantanu Narayen noted the Board wanted an internal leader who understands the company, while Chakravarthy emphasized his experience representing 'one Adobe' across all three product categories to enterprise customers.
RPO Trends
Asked: Jay Vleeschhouwer (Griffin Securities) expressed concern regarding single-digit RPO growth.
Answer: Shantanu Narayen explained that RPO growth is consistent with ARR trends and reflects a focus on new user acquisition through freemium models, noting that RPO typically steps up in Q4.
Monetization of AI
Asked: William Fitzsimmons (Piper Sandler) asked which pricing model will become the primary driver for AI revenue.
Answer: Anil Chakravarthy explained that the focus is currently on bringing customers into the funnel, and monetization will vary based on customer context, skill level, and the specific value realized.
What to watch before the next call
- The leadership transition on December 1 as Anil Chakravarthy assumes the CEO role.
- The outcome of the Topaz Labs acquisition, expected to close in Q4.
- Performance at Adobe MAX in November, which management highlighted as a key event for showcasing new agentic AI innovations.
