Adobe Inc. reported fiscal third-quarter results that topped analyst expectations on both profit and revenue, but a cautious fourth-quarter sales view triggered a modest selloff in early trading.
Shares of the company, which trades on NASDAQ under the ticker ADBE, fell 2.7% in premarket action on Friday after the report.
For the quarter ended July, Adobe said adjusted earnings per share reached $6.13, beating the consensus estimate of $6.07. Revenue came in at $6.76 billion, above the $6.69 billion forecast and up 13% year over year. Cash flow from operations totaled $2.52 billion, and the company repurchased approximately 9.5 million shares during the period.
Subscription revenue remained the dominant driver. Total Customer Group subscription revenue rose 14% to $6.56 billion, broken down into Business Professionals and Consumers subscriptions of $1.91 billion, up 16%, and Creative & Marketing Professionals subscriptions of $4.65 billion, up 13%. Adobe also reported that its total annualized recurring revenue reached $27.50 billion at the close of the quarter, and that it surpassed one billion monthly active users across its creativity and productivity platforms.
The mixed reaction from investors centered on Adobe’s fourth-quarter outlook. The company guided for revenue of $6.80 billion to $6.85 billion, a midpoint of $6.825 billion that fell short of the $6.85 billion consensus estimate. Adjusted EPS for the quarter is expected to come in between $6.30 and $6.35, with a midpoint of $6.325 that aligned with the $6.30 consensus figure.
On a full-year basis, Adobe raised its fiscal 2026 revenue outlook to a range of $26.576 billion to $26.626 billion, and increased its adjusted EPS target to $24.45 to $24.50.
“Adobe delivered record Q3 results, reflecting the strength of our AI innovation, expanding customer reach and leadership across creativity, productivity and customer experience,” Chair and CEO Shantanu Narayen said in a statement.
Wall Street’s response was measured. Jefferies analysts wrote that “results were uneventful with a small revenue beat and raise and unchanged operating margin views,” adding that the company’s valuation remained “depressed as investors await clarity.”
