Adobe Beats Q1, but Stock Slips on Guidance and CEO Transition
Adobe topped Q1 FY2026 estimates with EPS of $6.06 and revenue of $6.4 billion (up 12.1%), driven by AI-first ARR growth; ARR reached $26.06 billion and operating cash flow was a record $2.96 billion. Subscription revenue rose across segments, while CEO Shantanu Narayen said he will step down after a successor is named. For Q2, guidance calls for revenue of $6.43–$6.48 billion and adjusted EPS of $5.80–$5.85, and despite the beat the stock fell in after-hours trading as investors weigh the outlook and leadership transition. Analysts’ Hold rating with a ~$370 target suggests meaningful upside remains but sentiment is mixed.
