Adobe Reports Record Q4 and FY2025 Revenue

SAN JOSE, Calif.--( BUSINESS WIRE)--Adobe (Nasdaq:ADBE), the global technology leader that unleashes creativity and productivity for individuals and businesses through innovative platforms and tools, today reported financial results for its fourth quarter and FY2025 ended Nov. 28, 2025.

“Adobe’s record FY2025 results reflect our growing importance in the global AI ecosystem and the rapid adoption of our AI-driven tools,” said Shantanu Narayen, chair and CEO, Adobe. “By advancing our innovative generative and agentic platforms and expanding our customer base, we are excited to target double-digit ARR growth in FY2026.”

“Adobe delivered another outstanding year, fueled by strong global demand for our AI solutions across Business Professionals & Consumers and Creative & Marketing Professionals customer groups,” said Dan Durn, executive vice president and CFO, Adobe. “Looking ahead to FY2026, we are confident in our ability to deliver industry-leading innovations, double-digit ARR growth and world class profitability.”

Fourth Quarter FY2025 Financial Highlights

Fourth Quarter FY2025 Business Segment Highlights

Fourth Quarter FY2025 Customer Group Highlights

FY2025 Financial Highlights

FY2025 Business Segment Highlights

FY2025 Customer Group Highlights

Disclosure Updates

Beginning in FY2026, we will implement reporting and guidance changes. Our reporting and guidance will focus on customer group subscription revenue and total company ending ARR year-over-year growth, while also guiding on total Adobe revenue and EPS. We will continue to report subscription revenue for Digital Media and Digital Experience as supplemental disclosures.

Financial Targets

We revalued ending ARR at the end of FY2025 which resulted in a $460 million increase to Total Adobe ARR, from $25.20 billion to $25.66 billion entering FY2026, primarily from foreign exchange rate changes. We now provide historical information on Total Adobe ARR going back to FY2023 in our investor data sheet.

These targets factor in expectation for current macroeconomic conditions and do not include any contributions from Semrush Holdings, Inc., subject to regulatory approvals and other customary closing conditions.

The following table summarizes Adobe’s FY2026 targets 1:

Total revenue

$25.90 billion to $26.10 billion

Business Professionals & Consumers subscription revenue

$7.35 billion to $7.40 billion

Creative & Marketing Professionals subscription revenue

$17.75 billion to $17.90 billion

Total Adobe ending ARR growth

10.2% year over year

Earnings per share

GAAP: $17.90 to $18.10

Non-GAAP: $23.30 to $23.50

Targets assume non-GAAP operating margin of ~45.0%, GAAP tax rate of ~20.5%, non-GAAP tax rate of ~18.0% and diluted share count of ~403 million for FY2026.

The following table summarizes Adobe’s first quarter FY2026 targets 2:

Total revenue

$6.25 billion to $6.30 billion

Business Professionals & Consumers subscription revenue

$1.74 billion to $1.76 billion

Creative & Marketing Professionals subscription revenue

$4.30 billion to $4.33 billion

Earnings per share

GAAP: $4.55 to $4.60

Non-GAAP: $5.85 to $5.90

Targets assume non-GAAP operating margin of ~47.0%, GAAP tax rate of ~21.5%, non-GAAP tax rate of ~18.0% and diluted share count of ~411 million for first quarter FY2026.

Additional Information

Total Customer Group Subscription Revenue represents all subscription revenue across Business Professionals & Consumers and Creative & Marketing Professionals.

Total Adobe ARR represents the annual value of subscription contracts in the Creative & Marketing Professionals and Business Professionals & Consumers customer groups.

Total AI-Influenced ARR reflects ARR from the product offerings and tiers that the customers select that are enhanced by AI features and functionalities embedded in the product. We will periodically update product offerings and tiers included in Total AI-Influenced ARR based on new AI capabilities and workflows.

Adobe to Host Conference Call

Adobe will webcast its fourth quarter and fiscal year 2025 earnings conference call today at 2:00 p.m. Pacific Time from its investor relations website: http://www.adobe.com/ADBE. Earnings documents, including Adobe management’s prepared conference call remarks with slides and an investor datasheet are posted to Adobe’s Investor Relations Website in advance of the conference call for reference.

Forward-Looking Statements, Non-GAAP and Other Disclosures

In addition to historical information, this press release contains “forward-looking statements” within the meaning of applicable securities laws, including statements related to our business, strategy, artificial intelligence (“AI”) and innovation momentum; our market and AI opportunity and future growth; market and AI trends; current macroeconomic conditions; fluctuations in foreign currency exchange rates; strategic investments; customer success and groups; expectations regarding acquisitions and other business transactions; and our financial targets and assumptions related thereto, including revenue, operating margin, operating efficiencies, annualized recurring revenue, tax rate, earnings per share and share count. Each of the forward-looking statements we make in this press release involves risks, uncertainties and assumptions based on information available to us as of the date of this press release. Such risks and uncertainties, many of which relate to matters beyond our control, could cause actual results to differ materially from these forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to: failure to innovate effectively and meet customer needs; issues relating to development and use of AI; failure to compete effectively; damage to our reputation or brands; failure to realize the anticipated benefits of investments or acquisitions; service interruptions or failures in information technology systems by us or third parties; security incidents; failure to effectively develop, manage and maintain critical third-party business relationships; risks associated with being a multinational corporation and adverse macroeconomic conditions; complex sales cycles; failure to recruit and retain key personnel; litigation, regulatory inquiries and intellectual property infringement claims; changes in, and compliance with, global laws and regulations, including those related to information security and privacy; failure to protect our intellectual property; changes in tax regulations; complex government procurement processes; risks related to fluctuations in or the timing of revenue recognition from our subscription offerings; fluctuations in foreign currency exchange rates; impairment charges; our existing and future debt obligations; catastrophic events; and fluctuations in our stock price. Further information on these and other factors are discussed in the section titled “Risk Factors” in Adobe’s most recently filed Annual Report on Form 10-K and Adobe's most recently filed Quarterly Reports on Form 10-Q. The risks described in this press release and in Adobe’s filings with the U.S. Securities and Exchange Commission should be carefully reviewed.

Undue reliance should not be placed on the financial information set forth in this press release, which reflects estimates based on information available at this time. These amounts could differ from actual reported amounts stated in Adobe’s Annual Report on Form 10-K for our fiscal year ended Nov. 28, 2025, which Adobe expects to file in Jan. 2026.

Adobe assumes no obligation to, and does not currently intend to, update these forward-looking statements.

A reconciliation between GAAP and non-GAAP earnings results and financial targets and a statement regarding use of non-GAAP financial information are provided at the end of this press release and on Adobe’s investor relations website. Definitions of our non-GAAP financial measures are provided in the Current Report on Form 8-K relating to this press release.

About Adobe

Adobe is changing the world through personalized digital experiences. For more information, visit www.adobe.com.

©2025 Adobe. All rights reserved. Adobe and the Adobe logo are either registered trademarks or trademarks of Adobe (or one of its subsidiaries) in the United States and/or other countries. All other trademarks are the property of their respective owners.

Condensed Consolidated Statements of Income

(In millions, except per share data; unaudited)

Three Months Ended

Year Ended

November 28, 2025

November 29, 2024

November 28, 2025

November 29, 2024

Revenue:

Subscription

5,989

5,365

22,904

20,521

Product

325

386

Services and other

131

160

540

598

Total revenue

6,194

5,606

23,769

21,505

Cost of revenue:

Subscription

522

475

2,027

1,799

Product

Services and other

121

135

501

534

Total cost of revenue

649

616

2,551

2,358

Gross profit

5,545

4,990

21,218

19,147

Operating expenses:

Research and development

1,098

999

4,294

3,944

Sales and marketing

1,728

1,536

6,488

5,764

General and administrative

421

456

1,573

1,529

Acquisition termination fee

—

1,000

Amortization of intangibles

157

169

Total operating expenses

3,284

3,033

12,512

12,406

Operating income

2,261

1,957

8,706

6,741

Non-operating income (expense):

Interest expense

(66

)

(50

)

(263

)

(169

)

Investment gains (losses), net

Other income (expense), net

248

311

Total non-operating income (expense), net

190

Income before income taxes

2,264

1,991

8,734

6,931

Provision for income taxes

408

308

1,604

1,371

Net income

1,856

1,683

7,130

5,560

Basic net income per share

4.45

3.81

16.73

12.43

Shares used to compute basic net income per share

417

441

426

447

Diluted net income per share

4.45

3.79

16.70

12.36

Shares used to compute diluted net income per share

417

443

427

450

Condensed Consolidated Balance Sheets

(In millions; unaudited)

November 28, 2025

November 29, 2024

ASSETS

Current assets:

Cash and cash equivalents

5,431

7,613

Short-term investments

1,164

273

Trade receivables, net of allowances for doubtful accounts of $13 and $14, respectively

2,344

2,072

Prepaid expenses and other current assets

1,224

1,274

Total current assets

10,163

11,232

Property and equipment, net

1,873

1,936

Operating lease right-of-use assets, net

312

281

Goodwill

12,857

12,788

Other intangibles, net

495

782

Deferred income taxes

2,186

1,657

Other assets

1,610

1,554

Total assets

29,496

30,230

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Trade payables

417

361

Accrued expenses and other current liabilities

2,648

2,336

Debt

—

1,499

Deferred revenue

6,905

6,131

Income taxes payable

153

119

Operating lease liabilities

Total current liabilities

10,200

10,521

Long-term liabilities:

Debt

6,210

4,129

Deferred revenue

125

128

Income taxes payable

469

548

Operating lease liabilities

361

353

Other liabilities

508

446

Total liabilities

17,873

16,125

Stockholders’ equity:

Preferred stock

—

Common stock

—

Additional paid-in capital

15,361

13,419

Retained earnings

45,354

38,470

Accumulated other comprehensive income (loss)

(245

)

(201

)

Treasury stock, at cost

(48,847

)

(37,583

)

Total stockholders’ equity

11,623

14,105

Total liabilities and stockholders’ equity

29,496

30,230

Condensed Consolidated Statements of Cash Flows

(In millions; unaudited)

Three Months Ended

November 28, 2025

November 29, 2024

Cash flows from operating activities:

Net income

1,856

1,683

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, amortization and accretion

184

218

Stock-based compensation

489

441

Lease-related asset impairments

—

Other non-cash adjustments

(109

)

(116

)

Changes in deferred revenue

496

353

Changes in other operating assets and liabilities

244

264

Net cash provided by operating activities

3,160

2,921

Cash flows from investing activities:

Purchases, sales and maturities of short-term investments, net

(194

)

Purchases of property and equipment

(34

)

(48

)

Purchases and sales of long-term investments, intangibles and other assets, net

Net cash provided by (used for) investing activities

(146

)

Cash flows from financing activities:

Repurchases of common stock

(2,474

)

(2,500

)

Taxes paid related to net share settlement of equity awards, net of proceeds from treasury stock re-issuances

(94

)

(152

)

Other financing activities, net

151

Net cash used for financing activities

(2,555

)

(2,501

)

Effect of exchange rate changes on cash and cash equivalents

(10

)

(19

)

Net change in cash and cash equivalents

449

420

Cash and cash equivalents at beginning of period

4,982

7,193

Cash and cash equivalents at end of period

5,431

7,613

Non-GAAP Results

The following table shows Adobe’s GAAP results reconciled to non-GAAP results included in this release.

(In millions, except per share data)

Three Months Ended

Year Ended

November 28,

2025

November 29,

2024

August 29,

2025

November 28,

2025

November 29,

2024

Operating income:

GAAP operating income

2,261

1,957

2,173

8,706

6,741

Stock-based and deferred compensation expense

501

455

521

1,973

1,881

Amortization of intangibles

306

334

Acquisition-related expenses

—

1,007

Loss contingency (reversal)

—

(44

)

Lease-related asset impairments and other charges

—

100

—

100

Non-GAAP operating income

2,824

2,596

2,773

10,986

10,019

Net income:

GAAP net income

1,856

1,683

1,772

7,130

5,560

Stock-based and deferred compensation expense

501

455

521

1,973

1,881

Amortization of intangibles

306

334

Acquisition-related expenses

—

1,007

Loss contingency (reversal)

—

(44

)

Lease-related asset impairments and other charges

—

100

—

100

Investment (gains) losses, net

(12

)

(14

)

(23

)

(43

)

(48

)

Income tax adjustments

(113

)

(176

)

(97

)

(426

)

(509

)

Non-GAAP net income

2,294

2,132

2,252

8,941

8,281

Diluted net income per share:

GAAP diluted net income per share

4.45

3.79

4.18

16.70

12.36

Stock-based and deferred compensation expense

1.20

1.03

1.23

4.62

4.18

Amortization of intangibles

0.15

0.19

0.72

0.75

Acquisition-related expenses

—

2.24

Loss contingency (reversal)

—

(0.10

)

Lease-related asset impairments and other charges

—

0.23

—

0.22

Investment (gains) losses, net

(0.03

)

(0.03

)

(0.05

)

(0.10

)

(0.10

)

Income tax adjustments

(0.27

)

(0.40

)

(0.24

)

(1.00

)

(1.13

)

Non-GAAP diluted net income per share

5.50

4.81

5.31

20.94

18.42

Shares used to compute diluted net income per share

417

443

424

427

450

Non-GAAP Results (continued)

The following table shows Adobe’s fourth quarter fiscal year 2025 GAAP tax rate reconciled to the non-GAAP tax rate included in this release.

Fourth Quarter

Fiscal 2025

Effective income tax rate:

GAAP effective income tax rate

18.0

Income tax adjustments

3.0

Stock-based and deferred compensation expense

(2.3)

Amortization of intangibles

(0.3)

Investment gains (losses), net

0.1

Non-GAAP effective income tax rate (*)

18.5

(*)

Represents Adobe’s fixed long-term non-GAAP tax rate applicable for fiscal 2023 through fiscal 2025

Reconciliation of GAAP to Non-GAAP Financial Targets and Assumptions

The following tables show Adobe's annual fiscal year 2026 financial targets and assumptions reconciled to non-GAAP financial targets and assumptions included in this release.

(Shares in millions)

Fiscal Year 2026

Low

High

Diluted net income per share:

GAAP diluted net income per share

17.90

18.10

Stock-based and deferred compensation expense

5.51

5.50

Amortization of intangibles

0.39

Income tax adjustments

(0.50)

(0.49)

Non-GAAP diluted net income per share

23.30

23.50

Shares used to compute diluted net income per share

403

Fiscal Year 2026

Operating margin:

GAAP operating margin

36.0

Stock-based and deferred compensation expense

8.4

Amortization of intangibles

0.6

Non-GAAP operating margin

45.0

Fiscal Year 2026

Effective income tax rate:

GAAP effective income tax rate

20.5

Stock-based and deferred compensation expense

(2.5)

Non-GAAP effective income tax rate (*)

18.0

(*)

Represents Adobe’s fixed long-term non-GAAP tax rate based on projections and currently available information for fiscal 2026 through fiscal 2028

Reconciliation of GAAP to Non-GAAP Financial Targets and Assumptions (continued)

The following tables show Adobe's first quarter fiscal year 2026 financial targets and assumptions reconciled to non-GAAP financial targets and assumptions included in this release.

(Shares in millions)

First Quarter Fiscal 2026

Low

High

Diluted net income per share:

GAAP diluted net income per share

4.55

4.60

Stock-based and deferred compensation expense

1.24

Amortization of intangibles

0.10

Income tax adjustments

(0.04)

Non-GAAP diluted net income per share

5.85

5.90

Shares used to compute diluted net income per share

411

First Quarter

Fiscal 2026

Operating margin:

GAAP operating margin

38.0

Stock-based and deferred compensation expense

8.4

Amortization of intangibles

0.6

Non-GAAP operating margin

47.0

First Quarter

Fiscal 2026

Effective income tax rate:

GAAP effective income tax rate

21.5

Stock-based and deferred compensation expense

(3.0)

Income tax adjustments

(0.5)

Non-GAAP effective income tax rate (*)

18.0

(*)

Represents Adobe’s fixed long-term non-GAAP tax rate based on projections and currently available information for fiscal 2026 through fiscal 2028

Use of Non-GAAP Financial Information

Adobe continues to provide all information required in accordance with GAAP, but believes evaluating its ongoing operating results may not be as useful if an investor is limited to reviewing only GAAP financial measures. Adobe uses non-GAAP financial information to evaluate its ongoing operations and for internal planning and forecasting purposes. Adobe's management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Adobe presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate Adobe's operating results. Adobe believes these non-GAAP financial measures are useful because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making. This allows institutional investors, the analyst community and others to better understand and evaluate Adobe’s operating results and future prospects in the same manner as management.

Adobe's management believes it is useful for itself and investors to review, as applicable, both GAAP information as well as non-GAAP measures, which may exclude items such as stock-based and deferred compensation expenses, amortization of intangibles, investment gains and losses, income tax adjustments and other items that are not considered part of Adobe’s ongoing operations, and the income tax effect of the non-GAAP pre-tax adjustments from the provision for income taxes. Adobe uses these non-GAAP measures in order to assess the performance of Adobe's business and for planning and forecasting in subsequent periods. Whenever such a non-GAAP measure is used, Adobe provides a reconciliation of the non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed above.