Adobe Inc. (NASDAQ: ADBE) reported record fiscal third-quarter results on Thursday, comfortably beating Wall Street expectations, though shares slipped roughly 1% in after-hours trading as investors weighed the outlook against an already strong run-up into the print.
The design and marketing software giant posted revenue of $6.76 billion for the quarter, up 13% year-over-year (12% in constant currency), topping the consensus estimate of $6.69 billion compiled by analysts polled on Yahoo Finance. Non-GAAP diluted earnings per share came in at $6.13, ahead of the Street’s consensus forecast of $6.08, while GAAP diluted EPS was $4.62.
Subscription revenue climbed to $6.58 billion from $5.79 billion a year earlier, with total Digital Media and Digital Experience subscription revenue reaching $6.56 billion, up 14% year-over-year.
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Adobe’s Annualized Recurring Revenue exiting the quarter hit $27.50 billion, and the company highlighted that AI-first ARR grew more than 150% year-over-year, underscoring progress in monetizing generative and agentic AI tools such as Firefly and GenStudio amid intensifying competition from Microsoft and Google.
Adobe also reported record operating cash flow of $2.52 billion, Remaining Performance Obligations of $22.16 billion, and said it surpassed 1 billion monthly active users across its platforms. The company repurchased approximately 9.5 million shares during the quarter.
Looking ahead, Adobe raised its full-year guidance, now targeting fiscal 2026 revenue of $26.576 billion to $26.626 billion and GAAP EPS of $18.12 to $18.17.
Despite the beat-and-raise quarter, the modest post-market pullback suggests investors remain cautious about the pace of AI monetization and looming leadership transition, with incoming CEO Anil Chakravarthy set to take over in December.
