Adobe Beats Q3 Estimates, AI-Related ARR Jumps Over 150%

Adobe reported fiscal Q3 2026 results after market close on September 10, with revenue of $6.76 billion, up 13% year over year and above the $6.7 billion consensus. Non-GAAP diluted EPS came in at $6.13, beating the expected $6.08, while GAAP diluted EPS was $4.62.

The company said its AI-first annual recurring revenue (ARR) grew more than 150% year over year, without disclosing the absolute figure. Adobe also announced that monthly active users for its creative and productivity solutions surpassed 1 billion for the first time, a milestone CEO Shantanu Narayen called a key moment for the company.

Adobe raised its full-year outlook, now expecting fiscal 2026 revenue of $26.576 billion to $26.626 billion and non-GAAP EPS of $24.45 to $24.50. However, its Q4 revenue guidance midpoint of $6.825 billion came in slightly below the analyst estimate of $6.85 billion, sending shares down about 2% in after-hours trading.

Subscription revenue remained the dominant driver, totaling $6.582 billion in the quarter, up about 14% year over year and representing more than 97% of total revenue. Total ARR reached $27.5 billion. Revenue from business and individual customers grew 16%, while creative and marketing professional subscription revenue rose 13%.

GAAP net income was $1.827 billion, and non-GAAP net income was $2.424 billion. Operating cash flow hit a Q3 record of $2.523 billion. The company repurchased about 9.5 million shares during the quarter, reducing its diluted share count.