Adobe (ADBE) Q1 2026 earnings summary

Executive summary

• CEO Shantanu Narayen announced his planned transition, with a search for his successor underway while he remains Chair and CEO during the process, maintaining leadership continuity.

• Q1 FY26 revenue reached $6.40 billion, up 12% year-over-year (11% in constant currency), driven by AI-first products, Creative Cloud, Acrobat, and enterprise solutions.

• AI-first offerings' annual recurring revenue (ARR) more than tripled year-over-year, reflecting rapid adoption by individuals and enterprises.

• Monthly active users (MAU) surpassed 850 million, growing 17% year-over-year, with strong adoption across Acrobat, Creative Cloud, Express, and Firefly.

• The company unified its former segments into a single operating segment to reflect integrated product innovation and unified selling motions.

Financial highlights

• Q1 revenue was $6.40 billion, up 12% as reported and 11% in constant currency year-over-year.

• GAAP EPS was $4.60 (up 11%), non-GAAP EPS was $6.06 (up 19%) year-over-year.

• GAAP operating margin was 37.8%; non-GAAP operating margin was 47.4%.

• Total ending ARR reached $26.06 billion, up 10.9% year-over-year.

• Cash flow from operations hit a Q1 record of $2.96 billion; $6.89 billion in cash and short-term investments at quarter end.

Outlook and guidance

• FY26 ARR growth target reaffirmed at 10.2%.

• Q2 revenue guidance: $6.43–$6.48 billion; business professionals and consumers subscription revenue: $1.80–$1.82 billion; creative and marketing professional subscription revenue: $4.41–$4.44 billion.

• Q2 GAAP EPS guidance: $4.35–$4.40; non-GAAP EPS: $5.80–$5.85; non-GAAP operating margin: ~44.5%.

• Guidance does not include potential contribution from the pending Semrush acquisition.

• Management expects continued growth driven by AI-powered solutions, customer-focused innovation, and expansion across global markets.