Key Highlights

● Revenue hit a quarterly record of $6.76 billion, up 13% year on year.

● Total annual Recurring Revenue reached $27.50 billion, with AI-first products up over 150%.

● Operating Cash Flow reached $2.52 billion, a record for a third quarter.

● Fiscal 2026 revenue target was raised to $26.576 billion to $26.626 billion.

Adobe (NASDAQ:ADBE) reported results for its fiscal third quarter, which ended on 28 August 2026, in a release dated 10 September 2026. The company recorded revenue of $6.76 billion, a quarterly record and an increase of 13% year on year, or 12% in constant currency. It also raised its targets for fiscal 2026, which is why the update drew attention from software investors.

Business and sector

Adobe develops software for creating, editing and distributing digital content, and for managing Marketing and document workflows. Its products include Photoshop, Premiere, Acrobat and Express, sold largely on subscription. The company reports through customer groups, with Creative and Marketing Professionals serving specialist users and Business Professionals and Consumers covering document and mainstream creative tools. The sector is application software, where generative artificial intelligence is changing how content is produced and priced. Adobe's fiscal year ends in late November, so only the fourth quarter remains to be reported for fiscal 2026.

Reported results

Subscription revenue from the Total Customer Group was $6.56 billion, up 14%. Within that, Business Professionals and Consumers contributed $1.91 billion, up 16%, and Creative and Marketing Professionals contributed $4.65 billion, up 13%. Total Adobe annual recurring revenue was $27.50 billion at quarter end, and the company said that revenue from AI-first products, measured as annual recurring revenue, grew by more than 150% year on year.

On profitability, Operating Income was $2.35 billion on a GAAP basis and $2.97 billion on a non-GAAP basis. Net Income was $1.83 billion GAAP and $2.42 billion non-GAAP, equivalent to Diluted Earnings per Share of $4.62 and $6.13 respectively. Operating cash flow reached $2.52 billion, a record for a third quarter. Remaining performance obligations were $22.16 billion, of which 67% is expected to be recognised within twelve months. Adobe also repurchased about 9.5 million shares during the quarter.

Chief executive Shantanu Narayen described the company's milestone of 1 billion monthly active users across its creativity and productivity solutions as a defining moment for Adobe.

Guidance and industry context

Adobe now targets fiscal 2026 revenue of $26.576 billion to $26.626 billion, ending annual recurring revenue growth of 10.2%, and non-GAAP earnings per share of $24.45 to $24.50, with GAAP earnings per share of $18.12 to $18.17. For the fourth quarter it targets revenue of $6.80 billion to $6.85 billion and non-GAAP earnings per share of $6.30 to $6.35. These figures are management targets rather than results. Because the midpoint of the fourth-quarter revenue range sits above third-quarter revenue, the company is implying sequential growth, although that is an inference from the published ranges.

The wider backdrop is a debate over whether generative AI tools will expand Demand for creative software or let customers shift to cheaper alternatives. Adobe's own disclosures point to growth in AI-first products, yet the reported data do not by themselves show how much of the overall business that segment now represents.

Risks and uncertainties

Competition comes from specialist AI image and video generators, design platforms, and large technology groups bundling creative features into broader suites. Pricing pressure, changes in how customers consume AI-generated content, regulatory scrutiny of AI and intellectual property, and currency movements could all affect results. Adobe's GAAP and non-GAAP measures also differ materially, because the adjusted figures exclude certain items defined in the release.

Adobe's Path Into Fiscal 2027

The fourth-quarter report will show whether Adobe delivers within its targets and will provide initial detail on fiscal 2027. Useful indicators include growth in annual recurring revenue, the progress of AI-first products, the size of buybacks, and any commentary on competition.