Adobe Inc. 2026 Q3 Earnings Call

Please go ahead. Good afternoon, and thank you for joining us.

With me on the call today are Shantanu Narayen, Adobe's Chair and CEO, Anil Chakravarthy, President of Customer Experience and Orchestration, and Steve Day, Senior Vice President and Interim CFO. On this call, which is being recorded, we will discuss Adobe's third quarter fiscal year 2026 financial results. You can find our press release as well as PDFs of our prepared remarks and financial results on Adobe's investor relations website. The information discussed on this call, including our financial targets and product plans, is as of today, September 10, and contains forward-looking statements that involve risk, uncertainty, and assumptions. Actual results may differ materially from those set forth in these statements. For more information on those risks, please review today's earnings release and Adobe's SEC filings. On this call, we will discuss GAAP and non-GAAP financial measures.

Our reported results include GAAP growth rates and non-GAAP growth rates, including constant currency rates. During this presentation, Adobe's executives will refer to revenue growth in constant currency rates unless otherwise stated. Non-GAAP reconciliations are available in our earnings release and on Adobe's investor relations website. I will now turn the call over to Shantanu.

Thanks, Doug. Good afternoon, everyone, and thank you for joining us. Adobe reported a strong third quarter, achieving $6.76 billion in revenue, representing 12% year-over-year growth. GAAP earnings per share for the quarter was $4.62, representing 11% year-over-year growth, and non-GAAP earnings per share was $6.13, representing 15% year-over-year growth. Over the decades, Adobe's evolving mission from changing the world through digital experiences to now empowering everyone to create, has always focused on creating new market categories to serve an expanding set of customers. It has enabled us to build industry-leading platforms and products in the areas of creativity, productivity, and customer experience, setting a high bar for innovation and category transformation. Adobe will leverage AI to increase the reach, value, and impact we will deliver to customers to drive our next decade of growth.

AI enables us to democratize access to every creative discipline for everyone from the casual creator to the most seasoned creative professional. It enables us to meet the growing creativity and productivity needs of consumers and business professionals who are looking to stand out and communicate more effectively. With AI, Adobe uniquely empowers enterprises to deliver and orchestrate personalized customer experiences. As I reflect on 29 years at Adobe, I'm most proud of the innovative products and platforms we've delivered to customers, including Acrobat and PDF, Adobe Experience Manager, Adobe Experience Platform, InDesign, Photoshop, and Premiere, and more recently, Express and Firefly. It's incredible that these innovations are now used by over 1 billion monthly active users across all businesses, a number that grew greater than 20% year-over-year in Q3 with the creative freemium MAU crossing 100 million and growing greater than 70% year-over-year.

We created the digital marketing category and are the leading provider of customer experience orchestration solutions, delivering over 1 trillion experiences per year for enterprise customers. We're just beginning to capitalize on the massive AI opportunity across creativity, productivity, and customer experiences with AI-first ending ARR now exceeding $650 million and growing more than 150% year-over-year. During this time, Adobe's annual revenue has grown from less than $1 billion to over $26 billion. I'm delighted that Anil Chakravarthy will become Adobe's next President and Chief Executive Officer and join the board of directors effective December 1st. I would also like to thank David Wadhwani for over a decade of partnership, leadership, and passion for our creative community. I'm committed to working closely with Anil to ensure a smooth transition and support Adobe's ongoing growth and transformation as Executive Chair.

As an experienced transformation leader with strong values, integrity, deep knowledge of our business, and passion for products to solve customer needs, Anil is the right person to chart Adobe's growth in this agentic era. He has a proven record of building and delivering category-defining products that serve our broad range of customers, and I have every confidence that Adobe's best days are ahead of us. I'll now turn it over to Anil.

Thank you, Shantanu. Hello, everyone. I am deeply honored to lead Adobe at this pivotal moment. I'm excited by the opportunity to drive Adobe's growth and leadership across creativity, productivity, and customer experiences in the era of agentic software. Adobe's proven track record of empowering individuals and organizations to express their ideas, tell their stories, and make an impact continues to inspire us and fuel our commitment to customers. Thanks to Shantanu's exceptional leadership in transforming Adobe's product portfolio and business model over the decades, we are well-positioned to capitalize on the massive opportunities ahead. I look forward to working closely with our employees and Shantanu to continue serving our customers and transforming Adobe in the era of agentic AI. Turning to Q3 results, subscription revenue for business professionals and consumers was $1.91 billion, growing 15% year-over-year.

Our strategy for business professionals and consumers is to deliver AI-powered applications that transform how users comprehend, create, and share content. We are delivering new conversational and agentic interfaces in Adobe Reader, Acrobat, and Express through an integrated freemium experience. Our differentiation is grounded in a deep understanding of the PDF format and three decades of document expertise to transform Acrobat from the world's leading PDF tool into a comprehensive document productivity platform powered by AI. Today, people open more than 400 billion PDFs with Acrobat every year to read, edit, and create content. By integrating AI deeply into our products, we are helping customers realize the value of AI faster, more accurately, securely, and cost-efficiently. We are meeting users wherever they work and expanding our reach across the digital ecosystem by extending Acrobat's capabilities to major platforms including ChatGPT, Chrome, Cloud, Microsoft Edge, and WhatsApp.

This approach to innovation positions Adobe to drive deeper user engagement, unlock new enterprise opportunities, and sustain our leadership as the trusted platform for digital documents in the age of AI. Yesterday, we announced significant advances in Acrobat powered by the Adobe Productivity Agent that help people and teams understand the information in their documents faster, create polished work more easily, and access trusted knowledge at scale. Acrobat now turns complex documents into visually rich interactive reports and summary slides, as well as audio formats like personal podcasts, enabling users to quickly absorb key insights. New features like knowledge base and analyzer empower teams to ask questions across massive document collections and surface structured insights from thousands of files. This unlocks the value of existing organizational knowledge, driving smarter, faster decision-making at scale, all with enterprise-grade governance, security, trust, and compliance.

With a focus on winning the next generation of business professionals, Student Spaces in Acrobat is now available globally, targeting the higher education market and empowering students to generate flashcards, quizzes, and study guides to help them better understand and master their curriculum. Additional business professional and consumer highlights include business professionals and consumer MAU grew over 25% year-over-year to over 900 million. Acrobat AI Assistant MAU doubled quarter-over-quarter. Strong enterprise adoption of Acrobat AI capabilities among ETLA customers. Notable customer wins this quarter include Amazon, Deutsche Post DHL, Honeywell, Jysk, Renault, and the U.S. Department of Energy Los Alamos National Laboratory. In Q3, subscription revenue for creative and marketing professionals was $4.65 billion, growing 12% year-over-year. Our strategy for creators and creative professionals is to empower everyone to bring their creative visions to life across any media type and surface.

With Firefly, we are making creativity more accessible, intuitive, and efficient for creators of every experience level. For creative professionals, we are delivering the most comprehensive AI-driven power and precision applications through Creative Cloud across every stage of the creative process. Our differentiation is rooted in our deep domain expertise across media types, including imaging, design, video, photography, illustration, animation, and 3D, and complemented by our depth of intelligence across creative workflows. With Firefly and Creative Cloud, Adobe is reinventing creative software with agentic AI to deliver immediate personalized value, meeting users where they are with tools and agents that adapt to their needs. Adobe remains committed to delivering intuitive context-aware experiences that honor creative craft, accelerate creative velocity, and ensure that the next generation of creators can thrive in an ever-changing world.

Adobe's strategy is to offer customers choice as well as intelligent routing to use the best models for their needs, fully integrated in Adobe applications, eliminating the friction of switching between workflows and platforms. The Adobe Creative Agent empowers customers by handling the orchestration and execution of complex, repetitive creative workflows. We expanded the Adobe Creative Agent to additional Creative Cloud flagship apps, including Photoshop and Premiere, extending conversational agentic workflows deeper into our professional applications. We also introduced several innovations in Photoshop, giving professionals more choice and control at every stage of the creative process. This includes a new AI-assisted editor, now in beta, offering customers the option of using a dedicated interface and natural language pop bar alongside our generative tools powered by leading AI models. Adobe Firefly is the all-in-one creative AI studio for the next generation of creators.