Adobe’s fourth quarter was shaped by strong demand for its AI-powered creative and productivity tools, with management highlighting significant increases in user acquisition and engagement across key applications. CEO Shantanu Narayen credited the performance to the rapid integration of generative AI features into the company’s flagship products, which led to higher consumption of premium offerings and robust enterprise adoption. Management also pointed to expanded partnerships and the growing ecosystem around Firefly and Creative Cloud as supporting factors in the quarter.
Is now the time to buy ADBE? Find out in our full research report (it’s free for active Edge members).
Adobe (ADBE) Q4 CY2025 Highlights:
- Revenue: $6.19 billion vs analyst estimates of $6.11 billion (10.5% year-on-year growth, 1.4% beat)
- Adjusted EPS: $5.50 vs analyst estimates of $5.40 (1.9% beat)
- Adjusted Operating Income: $2.82 billion vs analyst estimates of $2.78 billion (45.6% margin, 1.5% beat)
- Revenue Guidance for Q1 CY2026 is $6.28 billion at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for the upcoming financial year 2026 is $23.40 at the midpoint, in line with analyst estimates
- Operating Margin: 36.5%, up from 34.9% in the same quarter last year
- Annual Recurring Revenue: $19.2 billion
- Billings: $6.69 billion at quarter end, up 12.3% year on year
- Market Capitalization: $145.6 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Adobe’s Q4 Earnings Call
- Mark Murphy (JPMorgan) asked about early customer use cases and economic potential of Firefly Foundry. CEO Shantanu Narayen and President David Wadhwani described strong enterprise uptake and significant upsell opportunities, citing managed services for content automation.
- Matt Swanson (RBC Capital Markets) questioned ROI and value creation from integrating Creative Cloud and Experience Cloud. Narayen and President Anil Chakravarthy pointed to closed-loop measurement and cost savings in marketing content production.
- Alex Zukin (Wolfe Research) inquired about SEMrush acquisition synergies. Chakravarthy explained the deal’s focus on brand visibility across AI-driven channels and unified analytics for marketers.
- Keith Weiss (Morgan Stanley) asked when AI user growth would translate into accelerated ARR growth. Narayen indicated Q4 was an inflection, with leading indicators—like MAU and generative credit usage—showing early revenue conversion.
- Jake Rubersch (William Blair) probed monetization of services integrated into platforms like ChatGPT. Wadhwani described the freemium funnel strategy and growing conversion of top-of-funnel users into paid subscribers.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will monitor (1) the pace of freemium user conversion to paid subscriptions as generative credit consumption rises, (2) the adoption and revenue contribution of Firefly Foundry and GenStudio in enterprise content automation, and (3) progress on the SEMrush acquisition and its impact on Adobe’s position in AI-powered brand optimization. Developments in partnerships with large tech platforms may also influence Adobe’s competitive standing.
Adobe currently trades at $347, up from $343.13 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
Our Favorite Stocks Right Now
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
