Adobe has reported financial results for the third quarter of fiscal 2026, which concluded at the end of August. Revenue increased by 13% year-over-year to reach $6.76 billion, setting a new quarterly record. Adjusted earnings per share came in at $6.13.

The company has also modestly raised its full-year revenue and adjusted earnings targets, although its fourth-quarter revenue guidance largely aligns with Wall Street's expectations.

Top and bottom-line figures surpass consensus estimates
Third-quarter revenue climbed to $6.76 billion, up from $5.99 billion in the same period last year, representing a 12% increase on a constant-currency basis. Adjusted EPS stood at $6.13. According to data compiled by FactSet, analysts had forecast average revenue of approximately $6.69 billion and adjusted EPS of $6.08, both figures landing slightly below the company's actual performance.

Adobe highlighted that annualized recurring revenue from its new artificial intelligence-centric offerings grew by more than 150% year-over-year. Monthly active users across its platforms reached 1 billion, indicating that free products and AI features are broadening the company's user base. Adobe has now integrated its proprietary Firefly models, along with select third-party models, into core tools such as Photoshop, Acrobat, and other creative and document applications.

Full-year revenue outlook sees narrow upward revision
For fiscal 2026, Adobe now projects revenue in the range of $26.576 billion to $26.626 billion, an increase from the prior guidance of $26.5 billion to $26.6 billion. Adjusted earnings per share are anticipated to land between $24.45 and $24.50. In the fourth quarter, the company expects revenue of $6.8 billion to $6.85 billion and adjusted EPS between $6.30 and $6.35. Market expectations for fourth-quarter revenue were approximately $6.84 billion, which sits near the upper end of the company's guidance range.

Following the earnings release, Adobe shares experienced a decline of roughly 2% in after-hours trading. Although revenue and profits exceeded expectations for the quarter, investors remain focused on how the free product strategy might impact near-term recurring revenue growth. Additionally, competitive pressures within the generative AI creative tools market continue to pose challenges for the company.

Leadership transition approaches finalization
Adobe has previously announced that Anil Chakravarthy, head of the Digital Experience business, will assume the role of Chief Executive Officer on December 1. Long-standing CEO Shantanu Narayen will transition to the position of Executive Chairman. This earnings report marks one of the final quarterly updates before the leadership handover. The incoming management team will need to advance the commercialization of AI products while carefully managing the balance between free user growth and subscription revenue conversion. The Chief Financial Officer position at Adobe is currently being overseen by an interim leader.