Adobe Inc (ADBE) (Q3 2026) Earnings Call Highlights: Record Revenue, 1 Billion MAU, and AI-First ARR Surging Over 150%

• Total Revenue: Record $6.76 billion, up 13% YoY as reported and 12% in constant currency.
• GAAP EPS: $4.62, up 11% YoY.
• Non-GAAP EPS: $6.13, up 15% YoY.
• Total Adobe Ending ARR: $27.5 billion, up 11.2% YoY.
• Total Subscription Revenue: $6.56 billion, up 14% YoY (13% constant currency).
• Business Professionals & Consumers Subscription Revenue: $1.91 billion, up 16% YoY as reported (15% constant currency).
• Creative & Marketing Professionals Subscription Revenue: $4.65 billion, up 13% YoY as reported (12% constant currency).
• Remaining Performance Obligations (RPO): $22.16 billion, up 8% YoY; CRPO up 9% YoY.
• Operating Cash Flow: Q3 record $2.52 billion.
• Cash & Short-Term Investments: $5.64 billion exiting Q3.
• Share Repurchases: Approximately 9.5 million shares repurchased; ~$24.55 billion remaining under April 2026 authorization.
• AI-First Ending ARR: Exceeded $650 million, up more than 150% YoY.
• Firefly Ending ARR: Grew 40% quarter over quarter across Firefly app and credit packs.
• Monthly Active Users: Over 1 billion total MAU, up more than 20% YoY; creative freemium MAU crossed 100 million, up over 70% YoY; Acrobat plus Express MAU surpassed 900 million, up over 25% YoY.
• Q4 FY26 Revenue Target: $6.8 billion to $6.85 billion.
• Q4 FY26 EPS Target: GAAP $4.65 to $4.70; non-GAAP $6.30 to $6.35.
• Q4 FY26 Non-GAAP Operating Margin Target: Approximately 44%.
• FY26 Revenue Target: $26.576 billion to $26.626 billion.
• FY26 EPS Target: GAAP $18.12 to $18.17; non-GAAP $24.45 to $24.50.
• FY26 Non-GAAP Operating Margin Target: Approximately 45%.

Release Date: September 10, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Adobe Inc ADBE reported record Q3 revenue of $6.76 billion, up 12% year-over-year, with non-GAAP EPS growing 15% to $6.13.
• Monthly active users surpassed 1 billion, growing over 20% year-over-year, with creative freemium MAU crossing 100 million, up over 70% year-over-year.
• AI-first ending ARR exceeded $650 million, growing more than 150% year-over-year, and Firefly ending ARR grew 40% quarter-over-quarter.
• Adobe Inc (ADBE) raised full-year revenue and EPS targets, demonstrating confidence in its strategy and execution.
• Strong enterprise adoption with notable customer wins including Amazon, Disney, Honeywell, and T-Mobile, and over 1,700 customers using CX Enterprise Coworker.

Negative Points

• RPO growth slowed to 8% year-over-year, the first single-digit growth since early fiscal 2023, and declined sequentially.
• Net new ARR declined 36-37% year-over-year, driven by the intentional shift to freemium and deferred pricing initiatives.
• Q4 revenue guidance implies only modest sequential growth in Creative & Marketing Professionals, with FX headwinds impacting the outlook.
• The company deferred Creative Cloud pricing optimizations, which may have provided short-term relief but could impact near-term monetization.
• Macroeconomic conditions and foreign exchange headwinds are expected to continue to pressure results in Q4.

Q & A Highlights

Q: Anil, agentic has been a pervasive theme across all of this. Could you just talk about how big of a factor this is going to be in your strategy going forward? And just kind of expand a little bit on what that long-term path looks like for agentic and what the end state could end up being?
A: Anil Chakravarthy (President, Customer Experience Orchestration Business): I see immense opportunity for Adobe to be the leader in agentic software for creativity, productivity and customer experience, just like we've been the leader in SaaS for those categories. Every SaaS company will go through the transformation to agentic software, just like software companies went from on-prem to SaaS. Customers want one product architecture with an interface of their choice (ChatGPT, Claude, Copilot, or Adobe's own), model flexibility with the best model matched to the best task, apps that use enterprise data and context to avoid hallucination, and a provider that helps them realize the full value of AI. I see a massive opportunity for us to be the agentic software leader in creativity, productivity and customer experience.

Q: Anil, it's great to hear Firefly and credit pack ARR continues to grow well, and that credit consumption is accelerating. Can you talk about what's driving the acceleration there? Is it broad usage or certain types of generations that are really behind it? And how do you think that evolves from here?
A: Anil Chakravarthy (President, Customer Experience Orchestration Business): Our freemium strategy is first focused on acquiring new users, and that has performed very well. Creative freemium MAU has grown to over 100 million, growing over 70% year over year, bringing people into the funnel. We then focus on increasing their intensity of AI usage and engagement, and that engagement is what is starting to translate into ARR, with Firefly ending ARR across apps and credit packs showing 40% quarter-over-quarter growth. Shantanu Narayen (CEO) added that video in particular is seeing a lot of usage, and credit consumption within Creative Cloud's core desktop applications is also very robust, reflecting how fundamental AI has become to those products.

Q: Your Q4 guidance implies only modest sequential revenue growth in Creative & Marketing Professionals. Could you walk us through the assumptions driving that outlook?
A: Anil Chakravarthy (President, Customer Experience Orchestration Business): We reiterated our full-year guide of 10.2% ending ARR growth. In Business Professionals & Consumers, the innovation we just announced in Acrobat and Express gives us a tailwind for Q4 growth. With Firefly and Creative Cloud, we have breakthrough releases planned in the run-up to MAX, giving us confidence for creators and Creative Professionals. In customer experience, we're starting with a strong pipeline and will get the benefit of seasonality and our innovations. Steven Day (Interim CFO) added that the Q4 guide represents a raise of around $50 million at the midpoint across CMP subs, BP&C subs, and the overall company versus the June guide.

Q: Net new ARR was down 36%, 37% year over year. I just wanted to get a sense of some of the drivers. Is it really more about seat volume softness, lapping pricing? Or is it really just the freemium funnel that you've talked about and you're doing intentionally that's kind of impacting that?
A: Anil Chakravarthy (President, Customer Experience Orchestration Business): Our strategy is to drive both and balance across acquiring new customers as well as growing ARR. We've taken a portion of our traffic to make sure we are sending them to the right place so we can acquire customers through the freemium funnel, then engage them and increase the intensity of their use. At the right time, we will calibrate where we convert them into ARR. That's the approach we've taken to tap into this large base of next-generation creators we can bring into the Adobe family, and that's what is driving the performance you see.

Q: I'm a little concerned about your RPO number. The single-digit growth year over year was the first single-digit growth since early fiscal '23 and down sequentially. Was there anything unusual about the consumption of RPO coming out of Q2? Or maybe just talk about some of the details there?
A: Steven Day (Interim CFO): RPO grew 8% year on year and CRPO 9%, reflecting continued execution against our strategic initiatives. The growth is consistent with our ARR trends and reflects our focus to accelerate new user acquisitions through the freemium business model. If you take a step back and look at these trends over the course of a typical year, both RPO and CRPO step up in our fourth quarter and then remain fairly flat over the next three quarters. This year is no different to prior years in that shape.

Q: I guess one question we get a lot is how you monetize AI across either Creative Cloud, Acrobat or enterprise products — through bundled credits, credit packs, premium tiers, per seat pricing, and usage-based contracts. Over time, which pricing model do you expect to become the primary driver of AI revenue?
A: Anil Chakravarthy (President, Customer Experience Orchestration Business): Our first focus is to bring as many customers as we can into our funnel and into the Adobe family, which is what you're seeing with the freemium strategy. After that, it really depends on what exactly they're doing, their skill level, and the context — whether they are individuals or enterprise customers. We're happy to work with Microsoft Copilot in the enterprise or ChatGPT for consumers, making sure they get value and driving up intensity of usage and engagement. Once we have the value, we can map it to the monetization, which helps us with better segmentation. We have a wide variety of ways to monetize that, and we'll apply them based on the context of the customer and what they're doing.

Q: On the Topaz Labs deal, what strategic gap does Topaz help fill in the product portfolio that maybe couldn't have been addressed with internal development or partnerships? And how should we think about how those Topaz capabilities could be folded into existing solutions?
A: Anil Chakravarthy (President, Customer Experience Orchestration Business): Topaz really was the state-of-the-art technology for us in terms of AI enhancements across imaging and video. A number of our customers have been using their technology along with ours, and we had a lot of great feedback from our customers. We believe they'll bring a great natural adjacency and fit right into what we have with Creative Cloud, Firefly, and Firefly Enterprise. We're excited about closing that in

For the complete transcript of the earnings call, please refer to the full earnings call transcript.