Adobe (ADBE) — Visual Investors Club

Loading…

Market Capi

$94B

Growth-adj P/E (3-yr hist)i

1.3x

Growth-adj P/E (3-yr proj)i

1.1x

P/S 26Ei

3.5x

P/S 28Ei

3.0x

EV/EBIT 26Ei

7.8x

EV/EBIT 28Ei

5.8x

P/E 26Ei

13x

P/E 28Ei

9.9x

P/S 26Ei

3.5x

EV/EBIT 26Ei

7.8x

P/E 26Ei

13x

P/S 28Ei

3.0x

EV/EBIT 28Ei

5.8x

P/E 28Ei

9.9x

Revenue

2026E

$27B

Gross Margini

89%

Hist. CAGRi

11%

Proj. CAGRi

9.8%

EBIT

2026E

$12B

Op. Margini

37%

Hist. CAGRi

13%

Proj. CAGRi

17%

Net profit

2026E

$7.2B

Net Margini

30%

Hist. CAGRi

14%

Proj. CAGRi

8.8%

Business Model

Subscription software: single segment — Creative Cloud + Experience Cloud tools
Revenue mix: 97%+ subscriptions, highly recurring
Core moat: workflow lock-in — Photoshop/Premiere industry-standard
AI product: Firefly, backed by an NVIDIA partnership and pending Topaz Labs deal
Geography: US ~53%, EMEA ~27%, APAC ~14%
Scale: 1B+ monthly active users; AI-first ARR up 150%+ YoY

Recent Developments

Q3 FY26 (Sep 10): record $6.76B revenue, +13% YoY; non-GAAP EPS $6.13, +15%
Total ending ARR: $27.50B, +11.2% YoY
AI-first ending ARR: above $650M, +150% YoY
Leadership: Anil Chakravarthy becomes CEO Dec 1, 2026; Narayen to Executive Chair
FY26 targets raised: revenue $26.58-26.63B; non-GAAP EPS $24.45-24.50
M&A: Topaz Labs deal agreed; close expected in Q4 FY26

Average Targeti

$275.06+16%

Consensusi

Hold

38 analysts covering

Net cashi

$400M

Div. Yieldi

n/a

Buyback Yldi

4.9%

Market Capi

$94B

P/E 26Ei

13x

Adj. P/E (fwd.)i

1.1x

Revenue 26E

$27B

Proj. CAGRi

9.8%

Gross Margini

89%

EBIT 26E

$12B

Proj. CAGRi

17%

Op. Margini

37%

Net Profit 26E

$7.2B

Proj. CAGRi

8.8%

Net Margini

30%

Average Targeti

$275.06+16%

Consensusi

Hold

38 analysts covering

Company

BETA

Profile

Adobe is a subscription-based software company. Beginning in fiscal 2026, it combined its former Digital Media, Digital Experience, and Publishing and Advertising segments into a single operating and reportable segment, reflecting a shift to unified selling motions and integrated product development. Revenue is now disclosed by customer group instead:

Creative & Marketing Professionals (~69% of revenue): Creative Cloud's professional tools (Photoshop, Illustrator, Premiere Pro), the Firefly AI platform, and Adobe Experience Cloud's marketing, analytics, and customer-data tools sold to enterprise marketing and IT teams.
Business Professionals & Consumers (~28% of revenue): Document Cloud, Acrobat, and Adobe Express subscriptions for individuals, students, and business users.
Other (~3%): non-subscription services, training, and legacy product licenses.

Subscriptions account for over 97% of total revenue, keeping the model highly recurring.

Industry

Adobe sells across the spectrum: individual creatives and students, SMBs on Creative Cloud and Acrobat, and large enterprise teams using its marketing and data platforms. Geographically, the US represents ~53% of revenue, with EMEA at ~27% and Asia-Pacific at ~14%. The creative software market shows high retention from embedded workflows, while the enterprise marketing technology market is large and competitive, with rivals including Salesforce, SAP, and Oracle.

Key metrics

Monthly active users: Surpassed 1 billion across Adobe's products
Creative freemium MAU: Topped 100 million, up more than 70% year over year
AI-first ending ARR: Exceeded $650 million, up more than 150% year over year
Subscription revenue mix: Over 97% of total revenue, a key durability indicator

Economic moat

Adobe's structural advantages center on deep workflow lock-in across professional creative toolchains — Photoshop, Illustrator, and Premiere Pro remain industry-standard formats and skills, so switching costs extend to file compatibility and professional retraining. The PDF/Acrobat ecosystem creates a parallel document-workflow moat. At the enterprise layer, Adobe Experience Platform integrates data, content, and activation in ways that are costly to replace once embedded. A 2026 strategic partnership with NVIDIA and the pending acquisition of Topaz Labs extend Firefly's technical edge, while its foundation on licensed content continues to differentiate Adobe from generative-AI rivals facing IP litigation risk.

Countryi

United States

Employeesi

31360

Leadership

Executive Chair

Shantanu Narayen

Narayen served as CEO from November 2007 through the company's transformation from a perpetual-license software vendor into a subscription-first cloud business, an 18-year run that multiplied revenue and margins. Following his March 2026 announcement that he would step down once a successor was named, Adobe named an incoming CEO on September 3, 2026, and Narayen will move to Executive Chair effective December 1, 2026, working alongside the new CEO through the transition.

Incoming President & CEO

Anil Chakravarthy

Chakravarthy will become Adobe's President and CEO effective December 1, 2026, moving up from his role as president of Adobe's Customer Experience Orchestration business and worldwide field operations. He previously spent four years as CEO of Informatica, leading its transformation to cloud and subscription services, with earlier executive roles at Symantec and VeriSign.

Interim CFO

Steve Day

Day, a 20-year Adobe veteran, was named interim CFO effective June 15, 2026, after Daniel Durn's resignation. He previously held finance leadership roles across the company, including CFO of the Customer Experience Orchestration business unit, while Adobe continues searching for a permanent CFO.

Other key figures

Lucius DiPhillips continues as CTO (appointed January 2026), overseeing technical direction for Firefly and Adobe Experience Platform. The board includes Frank Calderoni (Lead Independent Director) and Dheeraj Pandey (founder of Nutanix), adding enterprise software and infrastructure perspective through the leadership transition.

Valuation

Current market capi

$94B

Current EVi

$93B

Growth-adj P/E (3-yr hist)i

1.3x

Growth-adj P/E (3-yr proj)i

1.1x

P/S Ratioi

EV/EBITi

P/E Ratioi

Metric	2021	2022	2023	2024	2025	2026E	2027E	2028E
P/Si	20x	8.7x	15x	11x	5.6x	3.5x	3.2x	3.0x
EV/EBITi	43x	19x	31x	22x	12x	7.8x	6.8x	5.8x
P/Ei	66x	33x	53x	42x	19x	13x	11x	9.9x
PEGi	n/a	41x	3.1x	9.1x	0.5x	1.4x	0.6x	0.7x
FCF Yieldi	2.2%	4.9%	2.5%	3.5%	7.4%	11%	13%	15%

Income Statement

Revenue

CAGR (hist. 3-yr)i

CAGR (proj. 3-yr)i

EBIT

CAGR (hist. 3-yr)i

CAGR (proj. 3-yr)i

Net profit

CAGR (hist. 3-yr)i

CAGR (proj. 3-yr)i

Metric	2021	2022	2023	2024	2025	2026E	2027E	2028E
Revenuei	15.8	17.6	19.4	21.5	23.8	26.5	28.9	31.5
Gross profiti	13.9	15.4	17.1	19.1	21.2	n/a	n/a	n/a
EBITDAi	6.4	6.7	7.3	8.4	9.2	12.7	13.7	14.6
EBITi	5.8	6.1	6.7	7.8	8.7	12.0	12.9	14.1
Net profiti	4.8	4.8	5.4	5.6	7.1	7.2	8.2	9.2

Values in billions of USD.

Cashflow & CAPEX

Operating cashflow · Levered Free Cash Flow

Free Cash Flow

CAPEX

Metric	2021	2022	2023	2024	2025	2026E	2027E	2028E
Operating CFi	7.2	7.8	7.3	8.1	10.0	n/a	n/a	n/a
Levered FCFi	5.8	6.3	6.6	8.0	8.8	n/a	n/a	n/a
FCFi	6.9	7.4	6.9	7.9	9.9	10.3	11.3	12.2
CAPEXi	-0.33	-0.44	-0.36	-0.18	-0.18	-0.22	-0.26	-0.30

Values in billions of USD.

Profitability

Margins

Metric	2021	2022	2023	2024	2025
Gross margini	88%	88%	88%	89%	89%
Operating margini	37%	35%	34%	36%	37%
Net margini	31%	27%	28%	26%	30%

Rentability

Metric	2022	2023	2024	2025
ROEi	33%	36%	36%	55%
ROCEi	31%	33%	38%	45%
ROAi	18%	19%	19%	24%

Balance Sheet

Balance sheet

Metric	2021	2022	2023	2024	2025
Total assetsi	27.2	27.2	29.8	30.2	29.5
Cash & ST inv.i	5.8	6.1	7.8	7.9	6.6
Total liabilitiesi	12.4	13.1	13.3	16.1	17.9
Total equityi	14.8	14.1	16.5	14.1	11.6
Total debti	4.7	4.6	4.1	6.1	6.7

Values in billions of USD.

Liquidity ratios

Debt-to-Equity-Ratio

Sentiment

BETA

Last earnings

Adobe's fiscal third quarter (reported September 10, 2026) posted record revenue of $6.76 billion, up 13% year over year, beating a consensus estimate near $6.69 billion.

Non-GAAP EPS of $6.13 topped the roughly $6.08 consensus; GAAP EPS was $4.62.

The standout metric was reach: Adobe crossed 1 billion monthly active users across its products, with creative freemium MAU (Firefly, Express, and web/mobile Photoshop, Lightroom, and Premiere) topping 100 million, up more than 70% year over year, and AI-first ending ARR above $650 million, up more than 150% year over year.

Management raised full-year guidance to $26.58–$26.63 billion in revenue and non-GAAP EPS of $24.45–$24.50, while noting that monetizing the larger free user base will take time.

Recent developments

Adobe agreed to acquire Topaz Labs on June 25, 2026, adding AI video and image upscaling and restoration models for integration into Firefly, Photoshop, Lightroom, and Premiere; terms were not disclosed.

CFO Dan Durn resigned, and 20-year Adobe finance veteran Steve Day became interim CFO effective June 15, 2026, with a permanent search ongoing.

On September 3, 2026, Adobe named Anil Chakravarthy as incoming President and CEO effective December 1, 2026; Shantanu Narayen will move to Executive Chair.

Adobe expanded agentic-AI partnerships with major marketing holding companies Accenture, Omnicom, Stagwell, and WPP on June 22, 2026, embedding its content and data platforms into large-brand marketing workflows.

Debate & sentiment

Bulls point to AI-first ARR growth above 150% and rising engagement with paid and AI-native tools as evidence Adobe is monetizing its AI push faster than skeptics assume.

Bears, reflected in a BofA downgrade to Underperform in July 2026, argue generative AI is structurally shrinking Adobe's addressable market as cheaper, nimble tools capture incremental demand.

A key swing factor is conversion timing: several analysts trimmed price targets on limited near-term evidence that the newly expanded freemium base is converting to paid subscriptions as quickly as hoped.

The pending CEO handoff in December 2026 alongside a still-open permanent CFO search adds execution uncertainty that could move sentiment either way.

Short ratioi

4.0

Short % of floati

4.4%

Analyst Reports

Consensusi

Hold

Average targeti

$275.06+16%

Highest targeti

$373.00+57%

Lowest targeti

$195.00-18%

38 analysts covering

Buy7

Outperform4

Hold23

Underperform0

Sell4

Shareholder Value

Share counti · dilutioni / buyback yieldi

Dividend per sharei · yieldi

Stock-based compensationi · % of revenuei

Nice, you made it all the way through!

Imagine this for every stock you own.

Free for 14 days, then $9/month for every report, every metric, and every feature. Straightforward, as it should be. Future additions included. Cancel anytime.

Adobe (ADBE) — Visual Investors Club