Adobe (NASDAQ: ADBE) reported record revenue of US$6.62 billion for the three months ended 29 May 2026 - up 13% year-on-year, or 11% in constant currency, clearing consensus estimates of $6.45 billion.
The Photoshop maker beat the Street on every headline line, raised full-year guidance and tripled its AI-first revenue base - yet shares still fell after hours as a surprise CFO departure handed the bears fresh material.
Non-GAAP diluted earnings per share came in at $5.96 against a Street consensus of $5.81, extending a run of 13 straight quarterly beats on the revenue line.
GAAP earnings of $4.25 per share carried a $0.17 non-cash goodwill impairment tied to the Publishing & Advertising unit - a footnote, but the kind bears collect.
AI line triples off a low base
AI-first annualised recurring revenue tripled year-on-year to exceed $500 million, the number Adobe most wanted the market to see.
Total ARR exited the quarter at $27.10 billion, including roughly $480 million from the recently acquired Semrush.
Business Professionals & Consumers subscription revenue rose 16% to $1.85 billion, while the larger Creative & Marketing Professionals line grew 13% to $4.54 billion.
"Adobe delivered record revenue of $6.62 billion in Q2 reflecting strong AI-driven demand across our customer groups and we are raising our full-year fiscal 2026 revenue and non-GAAP EPS targets on the strength of that performance," Adobe chair and CEO Shantanu Narayen said.
CFO walks as guidance climbs
Adobe guided Q3 revenue of $6.67 billion to $6.72 billion with non-GAAP EPS of $6.05 to $6.10, and lifted FY26 targets to $26.5-26.6 billion in revenue and $24.35-24.45 in non-GAAP EPS - both comfortably above the Street's full-year marks of $26.06 billion and $23.54.
The raise was promptly buried. CFO Dan Durn departs on 15 June, with 20-year company veteran Steve Day stepping in as interim finance chief, and Durn is headed for Marvell Technologies.
Shares fell about 5% in after-hours trade as the exit, plus lingering concerns that AI could eventually pressure software revenues, overshadowed the beat.
The context is unforgiving: the stock had shed roughly 30% this year on fears that generative AI replaces Photoshop subscriptions rather than selling more of them, with Anthropic's Claude Design launch in April sharpening the disruption narrative. Records, it turns out, are negotiable when the narrative isn't.
What to watch:
- Mizuho has argued the stock is not cheap enough to own even at historically low valuations - the multiple debate now hinges on AI revenue scaling faster than disruption fears
- A permanent CFO appointment, given Narayen flagged his own transition plans earlier this year
- Whether AI-first ARR can sustain triple-digit growth into the November quarter, the cleanest live read on the "AI eats software" thesis
- Adobe repurchased roughly 8.5 million shares during the quarter; buyback cadence at depressed prices is the quiet support under the stock
