Overview
- Adobe reported fiscal third-quarter results on Sept. 10 that exceeded expectations, with revenue of $6.76 billion and adjusted EPS of $6.13.
- The company said AI annual recurring revenue grew 150% year over year to $650 million and Firefly and GenStudio showed strong ending ARR growth.
- Monthly activity jumped as Adobe passed more than 1 billion monthly active users and grew monthly freemium users by about 70% to over 100 million through free tools and limited AI credits.
- Key monetization signals weakened: net new annual recurring revenue fell roughly 36%–37% year over year and remaining performance obligations rose only about 8%, and the fiscal Q4 revenue guide of $6.80 billion to $6.85 billion slightly missed consensus.
- Analysts cut price targets and investors remain cautious with the stock down about 27%–30% year to date, while some commentators have suggested bullish scenarios such as a short squeeze or potential strategic uses of Adobe’s large market value.