10-QPeriod: Q2 FY2026

ADOBE INC. Quarterly Report for Q2 Ended May 29, 2026

Filed June 15, 2026For Securities:ADBE

Summary

Adobe Inc. reported solid financial results for the quarter ending May 29, 2026. Total revenue increased by 13% year-over-year to $6.62 billion, 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 billion, 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 billion 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.

Financial Highlights

54 data points
Beta

Revenue

$6.62B

89.2% Gross Margin

Net Income

$1.71B

25.9% Net Margin

EPS (Diluted)

$4.25

Total Assets

$29.93B

Cash & Equivalents

$4.92B

Free Cash Flow

$2.11B

Financial Statements
Beta
Revenue$6.62B
Cost of Revenue$715.00M
Gross Profit$5.90B
Operating Expenses$3.67B
Operating Income$2.24B
Net Income$1.71B
EPS (Basic)$4.26
EPS (Diluted)$4.25
Shares Outstanding (Basic)402.40M
Shares Outstanding (Diluted)402.50M

Key Highlights

  • 1Total revenue grew 13% year-over-year to $6.62 billion.
  • 2Subscription revenue, the primary revenue driver, increased 14% year-over-year to $6.42 billion.
  • 3Acquired Semrush for $1.87 billion, adding to goodwill and enhancing marketing/SEO offerings.
  • 4Net income remained stable at $1.71 billion.
  • 5Operating expenses increased 17% year-over-year, primarily due to higher sales and marketing costs.
  • 6Cash flow from operations increased 10% year-over-year to $5.12 billion for the six-month period.
  • 7Stock repurchase program remains active with $4.59 billion in repurchases during the six-month period.

Frequently Asked Questions

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.

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.

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.

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.