01—Abstract
Summary
Summary of the 10-Q filed June 15, 2026. Cited figures are marked; the original filing is the authoritative source.
Adobe Inc. reported solid financial results for the quarter ending May 29, 2026.
Total revenue increased by 13% year-over-year to $6.62 billiona, driven by a robust 14% growth in subscription revenue, which now constitutes 97% of total revenue. This growth was primarily fueled by strong performance in both the Creative & Marketing Professionals segment and the Business Professionals & Consumers segment. The company also saw a significant increase in goodwill due to the acquisition of Semrush for $1.87 billion, which is expected to enhance its marketing and SEO capabilities.
Despite an increase in operating expenses, particularly in sales and marketing, Adobe maintained its net income at $1.71 billionb, relatively flat compared to the prior year. Cash flow from operations remained strong, increasing by 10% to $5.12 billion for the six-month period.
The company continues to return capital to shareholders through its aggressive stock repurchase program, repurchasing $4.59 billionc in the six-month period. Adobe's Annualized Recurring Revenue (ARR) also saw healthy growth, reaching $27.10 billion, up 12.5% year-over-year.
02—Key points
Key Highlights
- Total revenue grew 13% year-over-year to $6.62 billion.
- Subscription revenue, the primary revenue driver, increased 14% year-over-year to $6.42 billion.
- Acquired Semrush for $1.87 billion, adding to goodwill and enhancing marketing/SEO offerings.
- Net income remained stable at $1.71 billion.
- Operating expenses increased 17% year-over-year, primarily due to higher sales and marketing costs.
- Cash flow from operations increased 10% year-over-year to $5.12 billion for the six-month period.
- Stock repurchase program remains active with $4.59 billion in repurchases during the six-month period.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Adobe Inc. kept $0.26.
- Revenue$6.62B100.0%
- Cost of revenue−$715.0M10.8%
- Gross profit$5.90B89.2%
- Operating costs−$3.67B55.4%
- Operating income$2.24B33.8%
- Interest, other & tax−$526.0M7.9%
- Net income$1.71B25.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed June 15, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $6.62B$5.87B | +12.7% |
| Cost of Revenue | $715.00M$638.00M | +12.1% |
| Gross Profit | $5.90B$5.24B | +12.8% |
| Operating Expenses | $3.67B$3.13B | +17.2% |
| Operating Income | $2.24B$2.11B | +6.1% |
| Net Income | $1.71B$1.69B | +1.2% |
| EPS (Basic) | $4.26$3.95 | +7.8% |
| EPS (Diluted) | $4.25$3.94 | +7.9% |
| Shares Outstanding (Basic) | 402.40M428.20M | −6.0% |
| Shares Outstanding (Diluted) | 402.50M428.90M | −6.2% |
05—Questions
Frequently Asked Questions
What was the impact of the Semrush acquisition on Adobe's financials?
Adobe completed the acquisition of Semrush for $1.87 billion in April 2026. This acquisition added $1.25 billion in goodwill to Adobe's balance sheet and is expected to enhance its offerings in marketing, search engine optimization, and generative engine optimization.
How did Adobe's subscription revenue perform?
Subscription revenue grew by 14% year-over-year to $6.42 billion for the quarter. This segment represents 97% of total revenue and showed strength in both the Creative & Marketing Professionals and Business Professionals & Consumers customer groups.
What is the current status of Adobe's share repurchase program?
Adobe continues to actively repurchase its shares. During the six months ended May 29, 2026, the company repurchased $4.59 billion worth of its common stock. As of May 29, 2026, approximately $26.78 billion remained authorized for future repurchases.
What drove the increase in operating expenses?
Total operating expenses increased by 17% year-over-year, driven primarily by a 16% increase in Sales and Marketing expenses, and a significant 45% increase in General and Administrative expenses. The increase in G&A was largely due to a goodwill impairment charge and legal settlement costs.
06—Continue