Adobe Stock Slides Despite Record Q2 Beat and Raised Guidance

Adobe (NASDAQ: ADBE) shares tumbled more than 6% in after-hours trading on Thursday after the creative software giant reported record fiscal second-quarter results that beat analyst expectations on both the top and bottom lines — yet failed to satisfy investors hungry for more.

The San Jose-based company posted Q2 revenue of $6.62 billion, up 13% year-over-year and ahead of the Yahoo Finance analyst consensus estimate of approximately $6.45 billion. Non-GAAP earnings per share came in at $5.96, comfortably topping the Street’s expectation of $5.81.

CEO Shantanu Narayen pointed to robust AI-driven demand as the engine of growth, noting that Adobe’s AI-first annualized recurring revenue (ARR) tripled year-over-year to surpass $500 million. Total Adobe ARR exiting the quarter stood at $27.10 billion, which includes approximately $480 million from its Semrush acquisition. The company also generated $2.17 billion in operating cash flow and repurchased around 8.5 million shares during the period.

Looking ahead, Adobe raised its full-year FY2026 revenue target to $26.50–$26.60 billion and lifted its non-GAAP EPS outlook to $24.35–$24.45. Q3 guidance also topped expectations, with revenue projected at $6.67–$6.72 billion — roughly 3% above prior Wall Street forecasts.

Despite the clean beat-and-raise quarter, shares dropped to around $218.80 in extended trading from a previous close of $233.38. Weighing on sentiment may be the surprise announcement that CFO Dan Durn is departing on June 15, with SVP Steve Day stepping in as interim replacement — adding an element of leadership uncertainty to an otherwise solid report.