Adobe reported third-quarter fiscal 2026 earnings Wednesday, with the company projecting revenue between $6.67 billion and $6.72 billion and non-GAAP earnings per share between $6.05 and $6.10, according to guidance issued ahead of the report. Analysts polled ahead of the release had forecast revenue of roughly $6.69 billion and earnings of $6.09 per share, both up from the same quarter a year earlier.
The report arrived at a tense moment for Adobe stock, which has fallen in 10 of its last 12 earnings reactions and closed at $255.65 on Wednesday, well below its 52-week high of $370.86. Wall Street’s core question going into the results was whether Adobe’s Creative Cloud and Document Cloud subscription businesses can keep growing as free and low-cost AI-native tools chip away at its user base.
Why are analysts split on the stock?
Of 38 analysts tracked ahead of the report, seven rated Adobe a strong buy, two a moderate buy, 23 a hold, two a moderate sell and four a strong sell, reflecting a broadly neutral consensus rating. Bulls point to Adobe’s full-year guidance, which calls for revenue around $26.55 billion and adjusted earnings per share around $24.40, both above analyst consensus estimates heading into the quarter. Skeptics cite the company’s shift toward free-tier offerings, an ongoing leadership transition and rising spending on AI infrastructure as reasons growth could slow even if the current quarter beats expectations.
Adobe has leaned heavily on its Firefly generative AI tools and AI features built into Photoshop, Premiere Pro and Acrobat to argue that its subscription model can absorb the AI shift rather than be disrupted by it. The company has also folded AI credits and usage-based features into existing Creative Cloud plans, a strategy it says increases engagement among existing subscribers even as it faces competition from standalone AI image and video generation startups that undercut Adobe’s pricing.
Beyond the AI competition question, investors have also been watching Adobe’s leadership transition, which has added uncertainty to the stock heading into the print of Wednesday’s results. The company has not detailed specific subscriber or churn figures ahead of the earnings call, leaving those numbers as one of the more closely watched details once the full report and executive commentary are released.
Wednesday’s broader market backdrop added pressure to the earnings reaction, with all three major U.S. stock indexes closing lower amid rising bond yields and inflation concerns tied to global oil markets, a mood that traders said made the bar for an enthusiastic reception to Adobe’s numbers higher than usual.
Sources: Benzinga · Alphastreet
