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Adobe Q4 Earnings Beat Estimates, Revenues Up Y/Y, Shares Fall
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Key Takeaways
ADBE posted Q4 EPS of $5.50 and revenues of $6.194B, beating estimates and rising year over year.
AI-influenced ARR now accounts for over one-third of Adobe's total recurring revenue base.
Adobe expects FY26 EPS of $23.30-$23.50 and revenue between $25.9B and $26.1B.
Adobe (ADBE - Free Report) reported fourth-quarter fiscal 2025 non-GAAP earnings of $5.50 per share, beating the Zacks Consensus Estimate by 2.04% and increasing 14.3% year over year.
Total revenues were $6.194 billion, which beat the consensus mark by 1.5% and increased 10.5% year over year both on a reported and constant-currency (cc) basis. Annualized recurring revenues (ARR) at the end of the fourth quarter of fiscal 2025 were $25.66 billion, indicating 11.5% growth from the year-ago same period. Total new AI-influenced ARR now exceeds one-third of ADBE’s overall book of business. Total customers with ARR more than $10 million grew 25% year over year to over 150.
Adobe shares were down 0.61% at the time of writing this article. ADBE dropped 37.6% in the past year, underperforming the Zacks Computer and Technology sector’s 25% and the Zacks Computer Software industry’s 4.9%.
ADBE’s Top Line in Detail
Subscription revenues were $5.989 billion (which accounted for 96.7% of the total revenues), up 11.6% on a year-over-year basis. Product revenues totaled $74 million (1.2% of the total revenues), down 8.6% year over year. Services and other revenues were $131 million (2.1% of the total revenues), down 18.1% year over year.
The Digital Media segment’s revenues were $4.62 billion, up 11% year over year on a reported and cc basis. Digital Media’s ARR was $19.2 billion at the end of the fiscal fourth quarter of 2025, representing 11.5% year-over-year growth.
Digital Experience revenues of $1.52 billion increased 9% year over year, both on a reported and cc basis. Digital Experience subscription revenues of $1.41 billion increased 11% year over year, both on a reported and cc basis. Publishing and Advertising revenues of $60 million compared with $70 million in the year-ago quarter.
Customer Group subscription revenues were $5.96 billion, up 12% year-over-year and 11% at cc. Business Professionals and Consumers’ subscription revenues were $1.72 billion, which represents 15% year-over-year growth on a reported basis and 14% at cc. Creative and Marketing Professionals subscription revenues were $4.25 billion, up 11% year over year on a reported basis and 10% at cc.
ADBE Q4 Operating Details
Adobe reported fourth-quarter fiscal 2025 GAAP gross margin of 90.4%, which expanded 10 basis points (bps) on a year-over-year basis.
Operating expenses were $2.78 billion, up 12.6% year over year. As a percentage of total revenues, the figure increased 80 bps year over year to 44.8%.
The adjusted operating margin was 45.6%, which contracted 70 bps year over year.
ADBE’s Balance Sheet & Cash Flow
As of Nov. 28, 2025, the cash and short-term investment balance was $6.6 billion, up from $5.94 billion as of Aug. 29. Long-term debt, as of Nov. 28, was $6.2 billion, unchanged compared with the figure as of Aug. 29.
Cash generated from operations was $3.16 billion in the reported quarter compared with $2.2 billion in the previous quarter.
Adobe Offers Positive Q1 and FY26 Guidance
For the first quarter of fiscal 2026, Adobe expects total revenues between $6.25 billion and $6.30 billion. Adobe expects Business Professionals and Consumers’ subscription revenue between $1.74 billion and $1.76 billion. Creative and Marketing Professionals subscription revenues are expected between $4.30 billion and $4.33 billion.
Non-GAAP operating margin is expected to be 47%. Adobe expects fiscal first-quarter non-GAAP earnings between $5.85 and $5.90 per share.
For fiscal 2025, Adobe expects total revenues between $25.9 billion and $26.1 billion. Adobe expects Business Professionals and Consumers’ subscription revenue between $7.35 billion and $7.4 billion. Creative and Marketing Professionals subscription revenues are expected between $17.75 billion and $17.9 billion.
Non-GAAP operating margin is expected to be 45%. Adobe expects fiscal 2026 non-GAAP earnings between $23.30 and $23.50 per share.
Zacks Rank & Stocks to Consider
Currently, ADBE carries a Zacks Rank #3 (Hold).
Advanced Energy Industries (AEIS - Free Report) , Amphenol (APH - Free Report) and Reddit (RDDT - Free Report) are some better-ranked stocks that investors can consider in the broader sector.
Image: Bigstock
Adobe Q4 Earnings Beat Estimates, Revenues Up Y/Y, Shares Fall
Key Takeaways
Adobe (ADBE - Free Report) reported fourth-quarter fiscal 2025 non-GAAP earnings of $5.50 per share, beating the Zacks Consensus Estimate by 2.04% and increasing 14.3% year over year.
Total revenues were $6.194 billion, which beat the consensus mark by 1.5% and increased 10.5% year over year both on a reported and constant-currency (cc) basis. Annualized recurring revenues (ARR) at the end of the fourth quarter of fiscal 2025 were $25.66 billion, indicating 11.5% growth from the year-ago same period. Total new AI-influenced ARR now exceeds one-third of ADBE’s overall book of business. Total customers with ARR more than
$10 million grew 25% year over year to over 150.
Adobe shares were down 0.61% at the time of writing this article. ADBE dropped 37.6% in the past year, underperforming the Zacks Computer and Technology sector’s 25% and the Zacks Computer Software industry’s 4.9%.
ADBE’s Top Line in Detail
Subscription revenues were $5.989 billion (which accounted for 96.7% of the total revenues), up 11.6% on a year-over-year basis. Product revenues totaled $74 million (1.2% of the total revenues), down 8.6% year over year. Services and other revenues were $131 million (2.1% of the total revenues), down 18.1% year over year.
Adobe Inc. Price, Consensus and EPS Surprise
Adobe Inc. price-consensus-eps-surprise-chart | Adobe Inc. Quote
The Digital Media segment’s revenues were $4.62 billion, up 11% year over year on a reported and cc basis. Digital Media’s ARR was $19.2 billion at the end of the fiscal fourth quarter of 2025, representing 11.5% year-over-year growth.
Digital Experience revenues of $1.52 billion increased 9% year over year, both on a reported and cc basis. Digital Experience subscription revenues of $1.41 billion increased 11% year over year, both on a reported and cc basis. Publishing and Advertising revenues of $60 million compared with $70 million in the year-ago quarter.
Customer Group subscription revenues were $5.96 billion, up 12% year-over-year and 11% at cc. Business Professionals and Consumers’ subscription revenues were $1.72 billion, which represents 15% year-over-year growth on a reported basis and 14% at cc. Creative and Marketing Professionals subscription revenues were $4.25 billion, up 11% year over year on a reported basis and 10% at cc.
ADBE Q4 Operating Details
Adobe reported fourth-quarter fiscal 2025 GAAP gross margin of 90.4%, which expanded 10 basis points (bps) on a year-over-year basis.
Operating expenses were $2.78 billion, up 12.6% year over year. As a percentage of total revenues, the figure increased 80 bps year over year to 44.8%.
The adjusted operating margin was 45.6%, which contracted 70 bps year over year.
ADBE’s Balance Sheet & Cash Flow
As of Nov. 28, 2025, the cash and short-term investment balance was $6.6 billion, up from $5.94 billion as of Aug. 29. Long-term debt, as of Nov. 28, was $6.2 billion, unchanged compared with the figure as of Aug. 29.
Cash generated from operations was $3.16 billion in the reported quarter compared with $2.2 billion in the previous quarter.
Adobe Offers Positive Q1 and FY26 Guidance
For the first quarter of fiscal 2026, Adobe expects total revenues between $6.25 billion and $6.30 billion. Adobe expects Business Professionals and Consumers’ subscription revenue between $1.74 billion and $1.76 billion. Creative and Marketing Professionals subscription revenues are expected between $4.30 billion and $4.33 billion.
Non-GAAP operating margin is expected to be 47%. Adobe expects fiscal first-quarter non-GAAP earnings between $5.85 and $5.90 per share.
For fiscal 2025, Adobe expects total revenues between $25.9 billion and $26.1 billion. Adobe expects Business Professionals and Consumers’ subscription revenue between $7.35 billion and $7.4 billion. Creative and Marketing Professionals subscription revenues are expected between $17.75 billion and $17.9 billion.
Non-GAAP operating margin is expected to be 45%. Adobe expects fiscal 2026 non-GAAP earnings between $23.30 and $23.50 per share.
Zacks Rank & Stocks to Consider
Currently, ADBE carries a Zacks Rank #3 (Hold).
Advanced Energy Industries (AEIS - Free Report) , Amphenol (APH - Free Report) and Reddit (RDDT - Free Report) are some better-ranked stocks that investors can consider in the broader sector.
Astera Labs, Amphenol and Reddit 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 rate for Advanced Energy Industries, Amphenol and Reddit is currently pegged at 33.4%, 38.7% and 38.6%, respectively.