Adobe (ADBE) Q1 2026 earnings summary

Executive summary

• CEO Shantanu Narayen announced plans to transition after 18 years, with a succession process and leadership continuity underway.

• Achieved record Q1 FY2026 revenue of $6.40 billion, up 12% year-over-year, driven by AI-powered product innovation and robust enterprise demand.

• AI-first annualized recurring revenue (ARR) more than tripled year-over-year, with strong growth across all customer groups.

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

• Net income for the quarter was $1.89 billion, a 4% increase from the prior year period.

Financial highlights

• Q1 revenue reached $6.40 billion, up 12% year-over-year (11% in constant currency).

• Subscription revenue was $6.20 billion, up 13% year-over-year; product revenue was $90 million, and services/other revenue was $110 million.

• GAAP EPS was $4.60 (up 11% YoY); non-GAAP EPS was $6.06 (up 19% YoY).

• Total ending ARR was $26.06 billion, up 10.9% YoY.

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

Outlook and guidance

• Q2 revenue guidance: $6.43–$6.48 billion; GAAP EPS $4.35–$4.40; non-GAAP EPS $5.80–$5.85.

• FY 2026 ARR growth expected at 10.2%.

• Non-GAAP operating margin for Q2 expected at ~44.5%.

• Guidance excludes Semrush acquisition, expected to close in Q2.

• Management anticipates sufficient liquidity and capital resources for operational and strategic needs.