Adobe Inc., together with its subsidiaries, operates as a diversified software company worldwide. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content; and Document Cloud, a unified cloud-based document services platform. Its flagship product is Creative Cloud, a subscription service that allows members to access its creative products. This segment serves content creators, students, workers, marketers, educators, enthusiasts, and communicators. The Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize, and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, and executives across the C-suite. The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development, and high-end printing, as well as Advertising Cloud offerings. It also provides consulting, technical support, and learning services. The company offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website at adobe.com. It also distributes products and services through distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and original equipment manufacturers. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. Adobe Inc. was founded in 1982 and is headquartered in San Jose, California.

Adobe has strong profitability and very high capital efficiency, but its valuation across several multiples remains mixed. P/E and P/FCF look noticeably below the industry median, which supports the case for a reasonable price relative to earnings and free cash flow. At the same time, P/S and especially P/B are significantly above industry benchmarks, indicating that the market is still paying a premium for the quality of the business and the resilience of its franchise. Gross margin of around 89%, operating margin above 36%, and net margin of almost 29% represent a very strong profile for a software company, and this trend remains stable. ROE, ROA, and ROI are at exceptionally high levels and continue to improve, confirming the business’s high profitability. Revenue, gross profit, EBITDA, and operating profit have generally grown over the past few years, so the fundamental base does not look weak. However, short-term liquidity raises questions: the current ratio is below 1, and the quick ratio is zero, which for an investor means limited working-capital cushion. Debt burden is moderate and even declining in terms of long-term debt, but the debt/equity ratio is still above the industry median, so the balance sheet cannot be called risk-free. The absence of dividends removes one source of support for the valuation, and the entire bet remains on earnings and cash flow growth. Overall, the fundamentals point to a high-quality, high-margin company with strong returns on capital, but with a valuation premium on revenue and balance-sheet metrics and some liquidity risks. Therefore, a moderate conservative negative adjustment to the forecast is appropriate, rather than a deep downward revision.

Adobe Inc.

Сильный индекс, значительно упал. Оптимистичный взгляд на свои позиции резко сменился на неуверенность.

Strong index, significantly down. An optimistic view of his position suddenly changed to uncertainty.

Слабый индекс, значительно упал. Уверенность медведей остается на низком уровне.

Weak index, significantly down. Bearish confidence remains low.

Сильный индекс, без изменений. Рынок не поддерживает быков.

Strong index, flat. The market does not support the bulls.

Сильный индекс, незначительно упал. Рынок на стороне медведей.

Strong index, slightly down. The market is on the bears' side.

Средний индекс, незначительно вырос. Отток средств из лонгов на высоком уровне.

Medium index, slightly up. Outflow of funds from longs at a high level.

Слабый индекс, незначительно упал. Приток средств в шорты остался положительным, но снизился.

Weak index, slightly down. The inflow of funds into shorts remained positive, but decreased.

Adobe looks fundamentally strong in terms of margins and return on capital, but the premium on P/S and P/B, weak liquidity, and the absence of dividends limit the valuation.

Key Points
Adobe is trying to balance near-term revenue growth with customer acquisition through its freemium model.
The stock looks very cheap at current levels.
While off its lows, Adobe (NASDAQ: ADBE) stock is still down nearly 30% on the year over fears that AI will disrupt its business. However, the company continues to see solid revenue growth, produce robust free cash flow, and the stock remains cheap.
Let's take a closer look at Adobe's results and prospects to see if it can finally start to break out to the upside.
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The Freemium strategy
To try to kick-start growth, Adobe has adopted a freemium model meant to help drive user adoption and convert casual users into long-term subscribers. This includes free offerings such as Adobe Express and mobile tools, as well as users getting limited monthly generative AI credits. The hope is that these users will buy more AI credits and eventually move to the company's more advanced premium subscriptions. Adobe said its monthly active freemium users grew 70% year over year to surpass 100 million in the quarter.
For its fiscal third quarter, Adobe saw revenue climb 13% year over year to $6.76 billion. This was above its prior forecast for revenue of between $6.67 billion and $6.72 billion. Adjusted earnings per share (EPS) jumped 15% to $6.13, ahead of its earlier $6.05 to $6.10 outlook.
Among individual segments, business professionals and consumers subscription revenue (which includes Adobe Acrobat and web-based solutions like Express) saw revenue increase by 16% to $1.91 billion. Creative and marketing professionals subscription revenue (which includes programs like Photoshop and Adobe Experience Manager) grew 13% to $4.65 billion.
Looking ahead, Adobe provided the following guidance, as seen in the table below:
Metric
FY 2026 Forecast
Revenue
$26.576 billion to $26.626 billion
Business professionals & consumers subscription revenue
$7.47 billion to $7.49 billion
Creative & marketing professionals subscription revenue
$18.242 billion to $18.272 billion
Total ARR growth
10.2%
Adjusted earnings per share
$24.45 to $24.50
For the fiscal fourth quarter, meanwhile, it provided the following outlook:
Metric
Fiscal Q1 Forecast
Revenue
$6.8 billion to $6.85 billion
Business professionals & consumers subscription revenue
$1.93 billion to $1.95 billion
Creative & marketing professionals subscription revenue
$4.665 billion to $4.695 billion
Adjusted earnings per share
$6.30 to $6.35
Adobe also announced that it has agreed to acquire Topaz Labs. The AI photo and video enhancement software company boasts more than 1 million users, and its technology will be integrated across Adobe's creative AI solutions.
Is Adobe stock a buy?
Adobe has been an unfailing low double-digit revenue grower, although some investors remain wary of the stock despite its consistency. New annual recurring revenue (ARR) growth has slowed, with new ARR seeing a steep 39% year-over-year decline. Right now, this can be attributed to the company trying to find the right balance between near-term revenue growth and longer-term user acquisition through its freemium model, which could lead to more robust growth in the future.
AI revenue is growing quickly, with AI ARR up 150% to $650 million. However, that is still a small percentage of the company's overall revenue and isn't really moving the needle at this point.
Turning to valuation, the stock currently trades at a forward price-to-earnings (P/E) ratio of 9 times fiscal year 2027 analyst estimates (ending November 2027). For a high gross margin software-as-a-service (SaaS) business growing revenue by double digits that generates strong free cash flow, that's a bargain.
While Adobe remains out of favor and has no immediate catalyst, I think the stock is just too cheap at current levels to completely write off. As such, I think patient investors can buy the stock at current levels.
Should you buy stock in Adobe right now?
Before you buy stock in Adobe, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Adobe wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $417,413!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,294!*
Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 210% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 12, 2026.
Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.

Adobe: After Lifting Guidance, Is the Beaten-Down Stock Ready to Break Out?

The S&P 500 Index ($SPX) (SPY) on Friday rose by +0.86%, the Dow Jones Industrial Average ($DOWI) (DIA) rose by +0.98%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose by +0.91%. E-mini S&P futures (ESU26) rose +0.83%, and September E-mini Nasdaq futures (NQU26) rose +0.86%.
Stock indexes closed higher, supported by Friday’s -2.4% decline in oil prices. The stock market took Friday’s CPI report largely in stride, even as the 10-year T-note yield closed slightly higher and the odds of a Fed rate hike next week rose to 85%.
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Friday’s Aug US CPI report of +0.4% m/m was in line with market expectations, but the core CPI report of +0.3% m/m was slightly stronger than market expectations of +0.2% m/m. On a year-on-year basis, the Aug CPI report of +3.4% y/y was unchanged from July and was in line with market expectations. Meanwhile, the Aug core CPI report of +2.4% y/y eased slightly from July’s +2.5% and posted a new 5.5-year low, and was in line with market expectations.
Friday’s CPI report caused the markets to raise the odds for a +25 bp FOMC rate hike at next week’s meeting on September 15-16 to 88% from 75% on Thursday.
Stocks were undercut by Friday’s weaker-than-expected US consumer sentiment report. The University of Michigan’s preliminary Sep US consumer sentiment index fell by -3.9 points to 47.8, weaker than market expectations for a -0.6 point decline to 51.3.
Also on the negative side, the University of Michigan reported that Sep US consumer 1-year inflation expectations rose to +4.6% from +4.0% in August, stronger than expectations of +4.2%. Sep consumer 5-10 year inflation expectations rose to +3.4% from +3.3% in August, and were stronger than market expectations of +3.3%.
The US-Canada trade war continues to weigh on stock market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by blocking imports of some Canadian products and slapping new tariffs on others, and by seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) fell -2.4% on Friday, reversing part of Thursday’s +6.7% surge to a 3.5-month high. Oil prices still rose by a net +9% on the week, but fell on Friday after the International Energy Agency warned that high oil prices and restricted oil supply will cause the biggest drop in global oil demand this year since the Covid-19 pandemic.
There were reports that two ships were struck by unidentified projectiles near Oman on Thursday, presumably by Iran. Also, Axios reported that Saudi Crown Prince Mohammed bin Salman called President Trump twice on Thursday, asking him to launch a new military attack against the Houthis in Yemen, who are gaining control of more territory in Yemen near the critical Bab el-Mandeb Strait and have been striking Saudi oil facilities. Saudi Arabia told OPEC on Thursday that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
Overseas stock markets closed mixed on Friday. The Euro Stoxx 50 closed up +0.90%. China's Shanghai Composite closed down -1.18%. Japan's Nikkei-225 Stock Average closed down -1.91%.
Interest Rates
December 10-year T-notes (ZNZ6) fell by -7 ticks. The 10-year T-note yield rose +0.6 bp to 4.969%, following Thursday’s +11 bp surge to a 2.75-year high of 4.963%. T-note prices found support early in the session from lower oil prices but eventually succumbed to the hawkish CPI report and the higher odds of an FOMC rate hike next week. T-note prices had some underlying support as the 10-year breakeven inflation expectations rate fell -4.4 bp to 2.373%, down from Thursday’s 3.25-month high of 2.42%.
European government bond yields were mixed. The 10-year German bund yield today posted a new 24-year high of 3.532% and ended the day up +0.3 bp to 3.504%. The 10-year UK gilt yield edged to a 19-year high of 5.380% but ended the day down -3.1 bp to 5.343%.
Markets are discounting a 78% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29. The ECB at this week’s meeting raised its deposit facility rate by 25 bp to 2.50%, as expected, and said inflation will stay above 2% for an "extended period."
US Stock Movers
Oracle (ORCL) rallied +5% in Thursday’s overnight session on positive cloud news but then lost those gains and ended Friday down -1.7%. Oracle said late Thursday that its cloud infrastructure sales rose +121% to $7.4 billion, above the market consensus of $7.2 billion. Oracle’s co-CEO Clay Magouyrk said, “We are delivering data center and GPU capacity at a pace that would have seemed impossible only a year ago.” The company also said it sold more than $30 billion in AI cloud contracts during the latest quarter, higher than expectations. Fiscal-Q1 sales rose +30% and the adjusted EPS report of $1.92 per share was higher than market expectations of $1.75.
Chipmakers rose nearly across the board on Friday, and the iShares Semiconductor ETF (SOXX) rallied +1.75% on the day. ON Semiconductor (ON) rallied more than +8%. Analog Devices (ADI), NXP Semiconductors (NXPI), Arm Holdings (ARM), and Marvell (MRVL) all rallied more than +4%.
The Magnificent Seven all closed higher on Friday except for Nvidia (NVDA), which showed a small loss. Amazon.com, Alphabet (GOOGL), and Apple (AAPL) all rallied by more than +1%. Apple found continued support after releasing its new iPhone Duo earlier this week, its first foldable phone.
Microsoft (MSFT) rallied +0.65% after saying it plans a data center push to triple its computing power since a current shortage is forcing it to turn away new AI and cloud business.
Crypto stocks traded higher on Friday, supported by a +3.1% gain in Ethereum (^ETHUSD) and a +0.2% gain in Bitcoin (^BTCUSD). Mara Holdings (MARA) rallied more than +4%, Riot Platforms rallied more than +2%, and Strategy (MSTR)and Coinbase (COIN) rallied more than 1%.
Adobe (ADBE) closed up +1.4% despite slightly disappointing guidance, fueling concerns that AI will cannibalize software revenue.
Dell Technologies (DELL) rallied nearly +12% after RBC Capital Markets started research coverage with an outperform rating and $640 price target based on expectations for strong AI infrastructure demand.
Earnings Reports (9/14/2026)
Liberty Live Holdings (LLYVK).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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Stocks Shake Off CPI Report and Rally on Lower Oil Prices

Key Points
Adobe maintains high profitability with a net margin of 30% as it integrates generative AI into its creative suite.
Salesforce dominates the CRM market and generated nearly $14.4 billion in free cash flow during its latest fiscal year.
Which software titan is the smarter investment for your portfolio in 2026?
As enterprise spending shifts toward automation and creativity, investors often find themselves choosing between Adobe (NASDAQ:ADBE) and Salesforce (NYSE:CRM). Which of these cloud software titans offers the best value today?
Adobe dominates the creative world with its suite of design tools, while Salesforce leads theglobal marketfor customer relationship management. Both companies are aggressively integrating artificial intelligence to stay relevant. Comparing their growth, profitability, and current valuations helps determine which stock is better suited for a long term portfolio strategy.
The case for Adobe
Adobe provides essential tools for creative professionals, marketing experts, and business users through its integrated subscription model. The company operates through three primary segments, which include its Creative Cloud, Document Cloud, and Experience Cloud offerings. Many enterprise customers now utilize end to end solutions like GenStudio to streamline their content supply chains, showing how Adobe is successfully linking its creative and marketing software.
In its latest annual report, filed for the fiscal year ended Nov. 28, 2025, revenue reached nearly $23.8 billion, representing growth of approximately 10.5% compared with the prior fiscal year. This growth was accompanied by a net income of nearly $7.1 billion. The company achieved a net margin of 30%, reflecting its ability to generate significant profit from its high value software subscriptions.
As of its November 2025 balance sheet, the company maintained a debt-to-equity ratio of nearly 0.6x, which measures total debt relative to shareholder equity. It also reported a current ratio of approximately 1.0x, indicating that its short term assets are roughly equal to its short term liabilities. Free cash flow, which is cash from operations minus capital expenditures, was close to $9.9 billion for the year.
The case for Salesforce
Salesforce is a dominant force among tech stocks because it provides a unified, AI-powered platform for sales, service, marketing, and commerce. The company serves businesses of all sizes worldwide, from small businesses to large global enterprises, across nearly every industry. No single customer accounts for more than ten percent of total revenues, ensuring the business is not overly dependent on any one client.
According to its latest annual report, filed for the fiscal year ended Jan. 31, 2026, revenue reached close to $41.5 billion, a 9.6% increase year over year. The company reported a net income of approximately $7.5 billion during this period. Its net margin stood at roughly 18%, which is a notable improvement over previous years as management focuses on operating efficiency.
As of its January 2026 balance sheet, Salesforce maintained a debt-to-equity ratio of roughly 0.3x, which compares total debt to the equity held by shareholders. Its current ratio, which evaluates if a company has enough short term assets to cover its short term debts, was nearly 0.8x. Free cash flow for the year was approximately $14.4 billion. Note that stock-based compensation represented roughly 23.4% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
Risk profile comparison
Adobe faces significant rivalry from global software and cloud-native companies, necessitating constant and costly innovation to retain its market share. The rapid integration of generative AI introduces risks including potential liability from biased outputs and high computing costs that could compress its net margin. Additionally, the company is subject to extensive global regulation and recently settled lawsuits related to subscription transparency, highlighting the risk of future regulatory actions.
Salesforce operates in a fragmented market and faces intense competition from established vendors and AI-native start-ups. The deployment of Agentforce and other AI-driven offerings presents emerging ethical and legal challenges regarding data security and accuracy. Furthermore, the company's aggressive acquisition strategy introduces execution risks, while ongoing antitrust matters, such as its legal disputes involving Microsoft (NASDAQ:MSFT), could divert management attention.
Valuation comparison
Adobe appears cheaper based on its Forward P/E, which compares the stock price to future earnings estimates, while Salesforce carries a lower P/S ratio.
Metric
Adobe
Salesforce
Forward P/E
11.3x
14.8x
P/S ratio
4.6x
4.1x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
It's a close call, but I'd go with Salesforce. Though an Adobe trading near multi-year lows is not something a long-term investor should walk past without a second look. Adobe has built one of the most deeply embedded software franchises in the world and the valuation is more attractive than it has been in years. Fears that AI would erode its creative dominance are looking increasingly overblown. For a long-term investor who values predictable cash flows and a proven platform, it is a solid choice.
But Salesforce is executing at a higher level right now. Agentforce has closed thousands of paid deals since launch, and the AI and data cloud business more than doubled year over year. The company is on track for a record year of operating cash flow. I like that enterprises are signing larger, longer deals, which signals growing confidence in the platform's long-term role in their operations.
Both companies are benefiting from AI, but Salesforce is using it to open new doors while Adobe is using it to keep existing ones from closing. Right now, that is the more valuable position.
Should you buy stock in Adobe right now?
Before you buy stock in Adobe, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Adobe wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,917!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,724!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 11, 2026.
Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe, Microsoft, and Salesforce. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.

Adobe vs. Salesforce: Which Software Stock Is a Better Buy in 2026?

Key Points
Adobe maintains high profitability with a 30% net margin and generated nearly $9.9 billion in free cash flow.
Ciena is experiencing double-digit revenue growth as it provides critical networking infrastructure for cloud providers and hyperscalers.
Which of these technology leaders is the better addition to your portfolio right now?
Should you buy a software king or a networking backbone? Adobe (NASDAQ:ADBE) and Ciena (NYSE:CIEN) offer two distinct ways to play digital transformation. Let's see which fits your portfolio better.
Adobe dominates creative software with its subscription model, while Ciena builds the physical and digital highways that move data. Comparing them requires looking at high-margin software against hardware infrastructure growth. These two firms play essential roles in how the world creates and transmits digital content today.
The case for Adobe
Adobe is a dominant player among tech stocks, producing essential software and cloud services for creativity and productivity. The company organizes its business around major segments like Creative Cloud and Experience Cloud. Today, Adobe is heavily investing in the "Content Supply Chain" by using AI-powered tools such as Adobe Firefly to automate personalized workflows for its global enterprise clients.
In FY 2025, revenue reached nearly $23.8 billion, which is a 10.5% increase compared to the previous year. This growth helped the company generate net income of roughly $7.1 billion, resulting in a net margin of approximately 30%. These figures show an improvement from the 25.9% net margin reported in FY 2024, indicating a strong ability to manage costs as revenue expands.
As of its November 2025 balance sheet, the debt-to-equity ratio was approximately 0.6x, which compares total debt to shareholder equity to assess financial leverage. The current ratio was nearly 1.0x, while free cash flow, defined as cash from operations minus capital expenditures, reached close to $9.9 billion. This provides Adobe with significant capital for reinvestment or returning value to its shareholders.
The case for Ciena
Ciena provides the high-speed networking systems, interconnects, and automation software that power modern data transmission for internet content providers and large hyperscalers. The company serves an expanding group of "neoscalers" that require specialized, high-capacity interconnects to manage increasingly complex digital workloads. Its global reach extends to 39 countries, supporting customers that build and manage the world's most sophisticated communication networks.
In FY 2025, revenue reached nearly $4.8 billion, a significant growth of approximately 18.8% year over year. Despite this revenue jump, net income was roughly $123.3 million, resulting in a net margin of close to 2.6%. This is a slight increase from the 2.1% net margin reported in FY 2024, as the company works to balance higher sales with significant research and development costs.
As of its November 2025 balance sheet, Ciena maintained a current ratio of nearly 2.7x and a debt-to-equity ratio of approximately 0.6x. Free cash flow for the year was close to $665.3 million. Note that stock-based compensation represented roughly 22.9% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
Risk profile comparison
Adobe faces intense competition from large technology firms and new AI-native start-ups that could pressure pricing and market share. The company also deals with regulatory risks regarding generative AI and a recent $150 million settlement over subscription billing practices. Adobe must also compete with established players like ServiceNow (NYSE:NOW) for enterprise attention.
Ciena grapples with high revenue concentration among a few large cloud providers and aggressive pricing pressure in the networking hardware industry. Supply chain dependencies on third-party manufacturers create risks, especially if geopolitical tensions rise or AI-driven component demand spikes. Ciena also competes against global rivals such as ZTE (OTC:ZTCOF) in a market that requires expensive, specialized personnel.
Valuation comparison
Adobe currently trades at a lower Forward P/E and P/S ratio than Ciena despite its higher net margin.
Forward P/E
9.3x
34.1x
P/S ratio
3.8x
8.1x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
I'd go with Ciena, though Adobe at its current valuation is a harder pass up than it looks on paper. Adobe has built one of the most deeply embedded software franchises in the world, and the stock has pulled back to one of its most attractive entry points in years. For a long-term investor who values predictable cash flows and a proven platform, it is a solid choice.
But Ciena is putting up numbers that tell the story of a business firing on all cylinders. Revenue grew 40% year over year, earnings nearly quadrupled, and the company raised its full-year outlook, all while navigating a supply environment where demand is outpacing capacity at every turn. AI data center customers need more optical networking than Ciena can currently build, which has pushed its backlog to a record level and given management extraordinary visibility into future demand.
Customer concentration is a risk worth acknowledging, and the valuation carries high expectations. But the underlying business is accelerating in ways that few networking companies have ever managed.
For a long-term investor, Ciena's record backlog and rising demand make it the stronger bet right now.
Should you buy stock in Adobe right now?
Before you buy stock in Adobe, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Adobe wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,917!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,724!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 11, 2026.
Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe, Ciena, and ServiceNow. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.

Adobe vs. Ciena: Which Technology Stock Is a Better Buy in 2026?

Key Points
Adobe maintains a massive install base and strong profitability within the creative and productivity software markets.
CrowdStrike continues to drive high revenue growth as a cloud-native leader in the critical cybersecurity infrastructure space.
Which software giant represents the more compelling opportunity for investors looking to balance growth and value in 2026?
Software investing often forces a choice between a stable, cash-rich giant and a high-velocity disruptor, leaving investors to wonder which path leads to better long-term outcomes in an evolving digital economy. Choosing between Adobe (NASDAQ:ADBE) and CrowdStrike (NASDAQ:CRWD) requires weighing established dominance against high-growth potential.
Adobe is the creative world's standard, while CrowdStrike is a cloud-native cybersecurity defender protecting modern enterprise workloads. They are being compared because both rely on subscription models to dominate their respective fields but offer very different risk and reward profiles for retail investors.
The case for Adobe
Adobe operates as a leader among tech stocks by providing creative and productivity software to more than 20,000 enterprise customers. The company uses an integrated cloud-based subscription model to serve diverse groups ranging from students to global corporations. Recent strategic moves include the acquisition of Topaz Labs to enhance content capabilities through generative and agentic artificial intelligence tools.
In its latest annual report, filed for the fiscal year ended Nov. 28, 2025, revenue reached nearly $23.8 billion, representing a year over year growth rate of approximately 10.5%. This growth follows a trend of steady expansion, as revenue was roughly $21.5 billion in the previous year. The company reported a net income of close to $7.1 billion, showcasing a healthy net margin of roughly 30%.
As of its November 2025 balance sheet, the debt-to-equity ratio, which compares total debt to shareholder equity, was approximately 0.6x. The current ratio, measuring the ability to cover short-term liabilities with short-term assets, stood at roughly 1.0x. Free cash flow, which is the cash a company generates after accounting for capital expenditures, reached nearly $9.9 billion during this period, indicating strong cash generation relative to its size.
The case for CrowdStrike
CrowdStrike provides a cloud-native platform designed to protect identity, data, and cloud workloads for a base of nearly 4,733 customers. The company utilizes a direct sales force and an extensive network of channel partners, including a 2026 partnership with Grant Thornton Advisors. Its go-to-market strategy focuses on endpoint protection and managed detection services for both public sector entities and government agencies.
In its latest annual report, filed for the fiscal year ended Jan. 31, 2026, revenue grew by approximately 21.7% to reach nearly $4.8 billion compared with the prior fiscal year. The company reported a net loss of roughly $162.5 million, resulting in a negative net margin of about 3.4%. This loss widened from the prior year, reflecting significant investments in personnel and cloud infrastructure to support the scale of its security cloud.
According to its January 2026 balance sheet, the debt-to-equity ratio was roughly 0.2x, while the current ratio reached approximately 1.8x. Free cash flow totaled close to $1.3 billion in the fiscal year ended Jan. 31, 2026. Note that stock-based compensation represented roughly 68% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
Risk profile comparison
Adobe faces intense competition from global software players and cloud-native entrants who may deploy resources more effectively. The rapid integration of generative AI carries risks of intellectual property infringement and shifting global regulations like the EU AI Act. Furthermore, the company faced a $150 million settlement in early 2026 regarding its online subscription cancellation practices and remains under regulatory scrutiny.
CrowdStrike continues to manage the reputational and operational aftermath of the failure in its July 19, 2024, content configuration update. This incident has led to ongoing costs for customer incentives and active litigation that could affect future results. The company also faces stiff competition from established security vendors and major cloud providers like Amazon (NASDAQ:AMZN), which possess greater financial resources.
Valuation comparison
Adobe appears significantly more conservative on a valuation basis, trading at a much lower multiple of future earnings estimates and annual sales than CrowdStrike.
Forward P/E
11.3x
154.9x
P/S ratio
4.6x
40.3x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
I'd go with CrowdStrike, though Adobe trading near historic lows is not something a long-term investor should dismiss without a second look. Adobe has built one of the most deeply embedded software franchises in the world, and the stock has pulled back to one of its most attractive entry points in years. Fears that AI would erode its creative software dominance are looking increasingly overblown. For a long-term investor who values predictable cash flows and a proven franchise, it is a solid choice.
But CrowdStrike is outpacing Adobe on nearly every growth metric that matters right now. Annual recurring revenue just hit a record, free cash flow surged to nearly a third of total revenue, and the Falcon platform keeps consolidating more of its customers' security spending under one roof. Every major enterprise that adds an AI workload also adds a new attack surface that needs protecting, which means CrowdStrike's addressable market keeps expanding alongside the AI build-out itself.
Cybersecurity is not a discretionary purchase for enterprises the way creative software can be. For a long-term investor, owning the platform that keeps growing because the problem it solves keeps getting bigger is a stronger foundation right now.
Should you buy stock in Adobe right now?
Before you buy stock in Adobe, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Adobe wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,917!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,724!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 11, 2026.
Sara Appino has positions in Amazon. The Motley Fool has positions in and recommends Adobe, Amazon, and CrowdStrike. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.

Adobe vs. CrowdStrike: Which Technology Stock Is a Better Buy in 2026?

The S&P 500 Index ($SPX) (SPY) is up +0.89%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.81%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.95%. E-mini S&P futures (ESU26) are up +0.82%, and September E-mini Nasdaq futures (NQU26) are up +0.85%.
Stock indexes are trading higher today, supported by today’s decline of more than -2% in oil prices. The stock and bond markets took today’s CPI report largely in stride. Aug core CPI came in at +0.3% m/m, slightly above market expectations of +0.2%, while nominal CPI was +0.4% m/m, in line with expectations. T-note prices are trading slightly higher, even though the markets raised the odds of a FOMC rate hike next week to 88% from 75% on Thursday.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
Today’s Aug US CPI report of +0.4% m/m was in line with market expectations, but the core CPI report of +0.3% m/m was slightly stronger than market expectations of +0.2% m/m. On a year-on-year basis, the Aug CPI report of +3.4% y/y was unchanged from July and was in line with market expectations. Meanwhile, the Aug core CPI report of +2.4% y/y eased slightly from July’s +2.5% and posted a new 5.5-year low, and was in line with market expectations.
Today’s CPI report caused the markets to raise the odds for a +25 bp FOMC rate hike at next week’s meeting on September 15-16 to 88% from 75% on Thursday.
Stocks were undercut by today’s weaker-than-expected US consumer sentiment report. The University of Michigan’s preliminary Sep US consumer sentiment index fell by -3.9 points to 47.8, weaker than market expectations for a -0.6 point decline to 51.3.
Also on the negative side, the University of Michigan reported that Sep US consumer 1-year inflation expectations rose to +4.6% from +4.0% in August, stronger than expectations of +4.2%. Sep consumer 5-10 year inflation expectations rose to +3.4% from +3.3% in August, and were stronger than market expectations of +3.3%.
The US-Canada trade war continues to weigh on stock market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by blocking imports of some Canadian products and slapping new tariffs on others, and by seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) are down more than -2% today, giving back part of Thursday’s +6.7% surge to a 3.5-month high. Oil prices are still sharply higher on the week, but fell back today after the International Energy Agency today warned that high oil prices and restricted oil supply will cause the biggest drop in global oil demand this year since the Covid-19 pandemic.
There were reports that two ships were struck by unidentified projectiles near Oman on Thursday, presumably by Iran. Also, Axios reported that Saudi Crown Prince Mohammed bin Salman called President Trump twice on Thursday, asking him to launch a new military attack against the Houthis in Yemen, who are gaining control of more territory in Yemen near the critical Bab el-Mandeb Strait and have been striking Saudi oil facilities. Saudi Arabia told OPEC on Thursday that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
Overseas stock markets are mixed. The Euro Stoxx 50 is up +0.66%. China's Shanghai Composite closed down -1.18%. Japan's Nikkei-225 Stock Average closed down -1.91%.
Interest Rates
December 10-year T-notes (ZNZ6) are up +1 tick. The 10-year T-note yield is down -3.1 bp to 4.932%, following Thursday’s +11 bp surge to a 2.75-year high of 4.963%. T-note prices shook off the CPI report and the higher odds of an FOMC rate hike next week and are trading higher on today’s decline in oil prices. The 10-year break-even inflation expectations rate is down -3.9 bp to 2.378%, falling back from Thursday’s 3.25-month high of 2.42%.
European government bond yields are mixed. The 10-year German bund yield today posted a new 24-year high of 3.532% and is up +1.1 bp to 3.512%. The 10-year UK gilt yield edged to a 19-year high of 5.380% but then backed off and is down -3.2 bp to 5.342%.
Markets are discounting a 78% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29. The ECB at this week’s meeting raised its deposit facility rate by 25 bp to 2.50%, as expected, and said inflation will stay above 2% for an "extended period."
US Stock Movers
Oracle (ORCL) is up +0.6% after reporting late Thursday that its cloud infrastructure sales rose +121% to $7.4 billion, above the market consensus of $7.2 billion. Oracle’s co-CEO Clay Magouyrk said, “We are delivering data center and GPU capacity at a pace that would have seemed impossible only a year ago.” The company also said it sold more than $30 billion in AI cloud contracts during the latest quarter, higher than expectations. Fiscal-Q1 sales rose +30% and the adjusted EPS report of $1.92 per share was higher than market expectations of $1.75.
The positive Oracle news boosted other cloud infrastructure stocks, with Applied Digital (APLD) up more than +2% and Coreweave (CRWV) up more than +1%.
Chipmakers are higher nearly across the board on the positive Oracle news, with TI (TXN), ON Semiconductor (ON), and Analog Devices (ADI) up more than +4%.
The Magnificent Seven are all trading higher today, led by gains of more than +2% in Apple (AAPL) and Alphabet (GOOGL). Apple is seeing continued support after releasing its new iPhone Duo earlier this week, its first foldable phone.
Microsoft (MSFT) is trading slightly higher after saying it plans a data center push to triple its computing power since a current shortage is forcing it to turn away new AI and cloud business.
Crypto stocks are trading higher due to today’s rally of about +2% in bitcoin. Mara Holdings (MARA) is up more than +7%. Strategy (MSTR)and Coinbase (COIN) are up more than +5%.
Adobe (ADBE) is little changed after providing slightly disappointing guidance, which fueled concerns that AI will cannibalize software revenue.
Dell Technologies (DELL) is up more than +10% after RBC Capital Markets started research coverage with an outperform rating and $640 price target based on expectations for strong AI infrastructure demand.
Earnings Reports (9/11/2026)
Kroger Co (KR) and Rent the Runway Inc (RENT).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

Key Points
Adobe's creative media tools face growing competition from other companies using generative AI.
Adobe's response has been to allow users to use some of its core products for free, in hopes of monetizing them later.
The company now counts more than 100 million monthly active users of its freemium products.
The stock market's "show-me" mentality for artificial intelligence stocks -- rewarding companies with tangible results and punishing those that are heavy on expectation and promise -- claimed another victim Thursday.
Adobe (NASDAQ:ADBE) reported earnings after the close on Sept. 10, emphasizing user acquisition over its paid products. On top of that, fourth-quarter guidance fell short of analysts' expectations, sending the stock down nearly 5% in after-hours trading.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Adobe has managed to recover its losses on Friday morning and pull even. But investors are signaling their skepticism for Adobe stock even though it's showing strong growth in its AI products.
Let's see what happened.
Image source: The Motley Fool.
Adobe is in a challenging spot
Adobe is best known for its Creative Cloud suite of software, including Photoshop, Illustrator, and Premiere Pro. It's been tremendously popular with graphic artists and digital media professionals, and Adobe monetized the software through a subscription model.
But that was before the days of generative AI. Now, someone using one of the powerful AI engines such as ChatGPT, Claude, Grok, or Gemini can merely enter a prompt and, within seconds, receive an altered image or entirely new content.
Adobe's answer to this has been Adobe Firefly, its generative AI model that lets users interact with Photoshop and other products via text prompts. And it has embraced a freemium model that lets users use many of its products and AI features. That helps users new to Adobe try out its powerful software and get used to the ecosystem before they encounter paid features and higher usage limits.
Anil Chakravarthy, president of Adobe's customer experience orchestration business, who will become CEO on Dec. 1, discussed the strategy during the company's earnings call.
"One of the things we have obviously done is, for example, taken a portion of our traffic to make sure that we are sending them to the right place so we can acquire customers for, through the freemium funnel," he said. "And then we engage them and then increase the intensity of their use. And, obviously, at the right time, we will calibrate where we convert them into ARR (annualized recurring revenue). So that is the approach we have taken to make sure that we are really tapping into this large base of next-generation creators we can bring into the Adobe family."
Adobe's earnings by the numbers
The company's freemium strategy has been very successful in bringing in new users. Monthly active users of the company's creative freemium products -- Firefly, Express, and web and mobile versions of Premiere, Photoshop, and Lightroom -- topped 100 million in the third quarter, up 70% from a year ago.
Overall revenue was $6.76 billion, up 13% from a year ago, and diluted earnings per share were $4.62. Adobe said its ARR was $27.50 billion, with AI-first ARR up more than 150% year over year.
Management issued fourth-quarter guidance that included revenue in the range of $6.8 billion to $6.85 billion, but the midpoint fell below analysts' expectations. For the full year, Adobe is expecting revenue in the range of $26.576 billion to $26.626 billion.
The outlook for Adobe
I think Adobe's strategy of scaling engagement and monetizing later makes sense. It's the same strategy Mark Zuckerberg used when he launched Facebook, eventually turning the company into the social media powerhouse now known as Meta Platforms. And it's the strategy that Zuckerberg is continuing to follow now that he's investing heavily in AI -- provide a free product and get your customers hooked. Whether it's Meta's free personal AI assistants or Adobe's free access to Photoshop, the concept is the same.
But today's market is inclined to reward tangible successes from AI companies rather than potential. That's why Adobe stock will continue to tread water until the company can show more success in converting a healthy percentage of its freemium customers into paid subscribers.
Should you buy stock in Adobe right now?
Before you buy stock in Adobe, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Adobe wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $409,917!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,341,724!*
Now, it’s worth noting Stock Advisor’s total average return is 942% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 11, 2026.
Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe and Meta Platforms. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Adobe Just Reported Earnings. Here's What Investors Need to Know.

The S&P 500 Index ($SPX) (SPY) is up +0.87%, the Dow Jones Industrial Average ($DOWI) (DIA) is up +0.97%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.77%. E-mini S&P futures (ESU26) are up +1.01%, and September E-mini Nasdaq futures (NQU26) are up +0.89%.
Stock indexes are trading higher today, supported by today’s decline of more than -3% in oil prices. The stock and bond markets took today’s CPI report largely in stride. The Aug core CPI of +0.3% m/m was slightly stronger than market expectations of +0.2%, but the nominal CPI of +0.4% m/m was in line with market expectations. T-note prices are trading mildly higher, even though the markets raised the odds of a FOMC rate hike next week to 88% from 75% on Thursday.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
Today’s Aug US CPI report of +0.4% m/m was in line with market expectations, but the core CPI report of +0.3% m/m was slightly stronger than market expectations of +0.2% m/m. On a year-on-year basis, the Aug CPI report of +3.4% y/y was unchanged from July and was in line with market expectations. Meanwhile, the Aug core CPI report of +2.4% y/y eased slightly from July’s +2.5% and posted a new 5.5-year low, and was in line with market expectations.
Today’s CPI report caused the markets to raise the odds for a +25 bp FOMC rate hike at next week’s meeting on September 15-16 to 88% from 75% on Thursday.
The US-Canada trade war continues to weigh on stock market sentiment. On Tuesday, Canada imposed tariffs of 15% to 50% on hundreds of US goods in retaliation for the US action last month to impose 50% tariffs on $20 billion of imports from Canada. The US responded by blocking imports of some Canadian products and slapping new tariffs on others, as well as seeking to bar Canadian companies from selling to US government contractors.
Oct WTI crude oil prices (CLV26) are down more than -3% today, giving back part of Thursday’s +6.7% surge to a 3.5-month high. Oil prices are still sharply higher on the week, but fell back today after the International Energy Agency today warned that high oil prices and restricted oil supply will cause the biggest drop in global oil demand this year since the Covid-19 pandemic.
There were reports that two ships were struck by unidentified projectiles near Oman on Thursday, presumably by Iran. Also, Axios reported that Saudi Crown Prince Mohammed bin Salman called President Trump twice on Thursday, asking him to launch a new military attack against the Houthis in Yemen, who are gaining control of more territory in Yemen near the critical Bab el-Mandeb Strait and have been striking Saudi oil facilities. Saudi Arabia told OPEC on Thursday that its crude production in August fell to 6.238 million bpd, the lowest since 1990.
Overseas stock markets are mixed. The Euro Stoxx 50 is up +0.81%. China's Shanghai Composite closed down -1.18%. Japan's Nikkei-225 Stock Average closed down -1.91%.
Interest Rates
December 10-year T-notes (ZNZ6) are up +4 ticks. The 10-year T-note yield is down -4.1 bp to 4.922%, following Thursday’s +11 bp surge to a 2.75-year high of 4.963%. T-note prices shook off the CPI report and the higher odds of an FOMC rate hike next week and are trading higher on today’s decline in oil prices. The 10-year break-even inflation expectations rate is down -2.6 bp to 2.390%, falling back from Thursday’s 3.25-month high of 2.42%.
European government bond yields are steady to lower. The 10-year German bund yield today posted a new 24-year high of 3.532% but then backed off and is little changed at 3.502%. The 10-year UK gilt yield edged to a 19-year high of 5.380% but then backed off and is down -4.4 bp at 5.329%.
Markets are discounting a 78% chance of a +25 bp ECB rate hike at the ECB’s next meeting on October 29. The ECB at this week’s meeting raised its deposit facility rate by 25 bp to 2.50%, as expected, and said inflation will stay above 2% for an "extended period."
US Stock Movers
Oracle (ORCL) is up more than +2% after reporting late Thursday that its cloud infrastructure sales rose +121% to $7.4 billion, above the market consensus of $7.2 billion. Oracle’s co-CEO Clay Magouyrk said, “We are delivering data center and GPU capacity at a pace that would have seemed impossible only a year ago.” The company also said it sold more than $30 billion in AI cloud contracts during the latest quarter, higher than expectations. Fiscal-Q1 sales rose +30% and the adjusted EPS report of $1.92 per share was higher than market expectations of $1.75.
The positive Oracle news boosted other cloud infrastructure stocks, with Applied Digital (APLD) up +2%, and Coreweave (CRWV) up +1%.
Chipmakers are higher across the board on the positive Oracle news, with Qualcomm (QCOM) and Intel (INTC) up more than +3%.
The Magnificent Seven are all trading higher today, led by gains of more than +1% in Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), and Meta (META). Apple is seeing continued support after releasing its new iPhone Duo earlier this week, its first foldable phone.
Adobe (ADBE) is down 0.4% after providing slightly disappointing guidance, which fueled concerns that AI will cannibalize software revenue.
Dell Technologies (DELL) is up more than +8% after RBC Capital Markets started research coverage with an outperform rating and $640 price target based on expectations for strong AI infrastructure demand.
Earnings Reports (9/11/2026)
Kroger Co (KR) and Rent the Runway Inc (RENT).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

Adobe ADBE reported third-quarter fiscal 2026 non-GAAP earnings of $6.13 per share, which rose 15.4% year over year and beat the Zacks Consensus Estimate by 0.82%.
Revenues of $6.76 billion increased 12.9% and beat the consensus mark by 1.02%. Growth was led by customer-group subscriptions, while total Adobe ending annualized recurring revenue (ARR) reached $27.50 billion, up 11.2% year over year. AI-first ending ARR exceeded $650 million and grew more than 150% year over year.
ADBE’s Top Line in Detail
Subscription revenues were $6.58 billion, up 13.7% year over year, and accounted for 97.4% of total revenues. Product revenues fell 1.5% to $67 million. Services and other revenues declined 14.0% to $111 million.
Adobe Inc. Price and Consensus
Total Customer Group subscription revenues were $6.56 billion, rising 14% year over year as reported and 13% in constant currency. The recurring-revenue mix continued to dominate Adobe's top line in the quarter.
Business Professionals & Consumers subscription revenues were $1.91 billion, increasing 16% year over year as reported and 15% in constant currency. Acrobat + Express monthly active users (MAUs) surpassed 900 million, growing more than 25%, while Acrobat AI Assistant MAU doubled sequentially.
Creative & Marketing Professionals subscription revenues totaled $4.65 billion, up 13% as reported and 12% in constant currency. Creative freemium MAU crossed 100 million and advanced more than 70% year over year.
ADBE’s AI Adoption Gains Momentum
Firefly ending ARR across the Firefly App and Firefly credit packs grew 40% sequentially. Adobe also cited accelerating usage among Firefly Enterprise customers and continued strength in Creative Cloud Teams and Enterprise offerings.
Within marketing, ending ARR grew more than 20% year over year for each of Adobe Experience Manager and agentic web apps, Adobe GenStudio, and Adobe Experience Platform and apps. The number of paid Brand Visibility customers doubled quarter over quarter.
Adobe said its products now serve more than one billion monthly active users across its businesses, a base that grew more than 20% year over year. The company is also extending Acrobat capabilities to platforms, including ChatGPT, Chrome, Claude, Microsoft Edge and WhatsApp.
Adobe also announced an agreement to acquire Topaz Labs, whose AI enhancement models are expected to be integrated across Firefly, Firefly Services and Creative Cloud applications. The transaction is expected to be closed in the fourth quarter, subject to regulatory approvals and customary conditions.
Adobe’s Operating Costs Put Pressure on Margins
GAAP gross margin was 88.7%, down about 60 basis points (bps) from 89.3% reported in the year-ago quarter.
Operating expenses rose 14.8% year over year to $3.64 billion, reflecting higher research and development, sales and marketing, and general and administrative costs.
GAAP operating income increased to $2.35 billion from $2.17 billion, but the operating margin contracted to 34.8% from 36.3%.
Non-GAAP operating income was $2.97 billion, translating to a 44% margin versus 46.3% in the year-ago quarter.
ADBE's Cash Flow Hits a Q3 Record
Cash flows from operations reached a third-quarter record of $2.52 billion, up 14.8% year over year. Adobe ended the quarter with $5.64 billion in cash and short-term investments.
Remaining performance obligations (RPO) were $22.16 billion, up 8% year over year, while current RPO grew 9%.
Adobe repurchased roughly 9.5 million shares and exited the quarter with about $24.55 billion remaining under its April 2026 repurchase authorization.
Adobe Raises Fiscal 2026 Targets
For the fourth quarter of fiscal 2026, Adobe expects revenues between $6.80 billion and $6.85 billion. Non-GAAP earnings are forecast between $6.30 and $6.35 per share, with a non-GAAP operating margin of roughly 44%.
Business Professionals & Consumers subscription revenues are projected to be $1.93-$1.95 billion, while Creative & Marketing Professionals subscription revenues are expected in the range of $4.665-$4.695 billion.
For fiscal 2026, Adobe raised its revenue target to $26.576-$26.626 billion and non-GAAP earnings outlook to $24.45-$24.50 per share. Fiscal 2026 non-GAAP operating margin is projected at approximately 45%.
The company also expects ending ARR growth of 10.2% year over year, based on its fiscal 2026 beginning book of business of $25.66 billion.
Zacks Rank & Stocks to Consider
Currently, ADBE carries a Zacks Rank #4 (Sell).
Coherent COHR, MACOM Technology Solutions MTSI and Teradyne TER are some better-ranked stocks that investors can consider in the broader sector.
Coherent, MACOM Technology Solutions and Teradyne each sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rates for Coherent, MACOM Technology Solutions and Teradyne are currently pegged at 52.49%, 42.35% and 54.38%, respectively.
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ADBE Q3 Earnings Beat Estimates, Revenues Rise on Subscription Growth

In early trading on Friday, shares of Honeywell International topped the list of the day's best performing components of the Nasdaq 100 index, trading up 7.5%. Year to date, Honeywell International registers a 42.2% gain.
And the worst performing Nasdaq 100 component thus far on the day is Adobe, trading down 2.8%. Adobe is lower by about 30.9% looking at the year to date performance.
Two other components making moves today are SanDisk, trading down 2.4%, and Marvell Technology, trading up 4.1% on the day.

Adobe Inc.

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