Adobe heads into its first-quarter earnings report later on Thursday with its stock down roughly 18% so far this year. Amid booming valuations in the AI space, Adobe's stock below average performance has made the upcoming earnings a test of investor confidence.
Adobe is set to report earnings after the market closes Thursday, with traders anticipating a big move from the Photoshop maker's stock following the results.
The 2025 Q4 earnings season is nearly over, with more than 96% of S&P 500 companies already delivering their results. It's overall been another great cycle, with growth remaining strong while beats percentages aren't too far off from historical levels.
ADBE heads into Q1'26 results, with revenues expected at $6.28B and EPS at $5.88, as AI-powered Acrobat, Express and Firefly adoption aim to offset GenAI competition.
Beyond analysts' top-and-bottom-line estimates for Adobe (ADBE), evaluate projections for some of its key metrics to gain a better insight into how the business might have performed for the quarter ended February 2026.
The 2026 Q1 earnings season will take the spotlight when the big banks report their results in about four weeks, but we will already have seen fiscal February-quarter results from almost two dozen companies by then, including Oracle and Adobe.
ARR above 10%, margins expanding to 47%, and a third of the book already AI-influenced. Adobe isn't being disrupted—it's monetizing the disruption. The AI-threat thesis has crushed ADBE, off 57% from its peak. But revenues grew 10%, operating profit 29%, and ARR 11.5% in FY2025. The fundamentals haven't confirmed the selloff. Three things to watch: Total ARR trajectory, non-GAAP operating margin vs. the 47% target, and BP&C subscription growth as the Canva battleground indicator.
At what point does the broad stock market cease to “look” expensive? Of course, the AI run-up has made for rather swollen valuation metrics in a wide number of names.
Adobe (ADBE) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Adobe is upgraded to Strong Buy as its valuation has dropped to 11.5x forward non-GAAP P/E (nearly 50% below my last rating), driven by fears of SaaS disruption. In the latest 4Q earnings, ADBE's ARR and RPO growth remained resilient, and its balance sheet is healthy with $385M in net cash. FCF margin reached 41.4% in FY2025, with FCF expected to grow 9.6% YoY in FY2026, bringing its P/FCF fwd to 10.2x.
Adobe (ADBE) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.