Adobe Inc.

Legal name

ADOBE INC.

Headquarters

SAN JOSE, CA

Incorporated in

Delaware

Fiscal year end

11/27

Exchange & ticker

NASDAQ: ADBE

Industry

Software - Infrastructure

CIK

796343

Website

https://www.adobe.com/ ↗

IR page

https://www.adobe.com/investor-relations.html ↗

Source: Form 10-K (FY2025) cover page and business description

Source: SEC EDGAR filing history. Release dates are the dates the earnings release was furnished to the SEC on Form 8-K (Item 2.02), which is normally the day results are announced. Fiscal years are labeled by the calendar year in which they end.

• Digital Media

  Creative Cloud and Firefly

  Examples: Photoshop, Lightroom, Illustrator, Premiere, Firefly

  Professional creative apps and commercially safe generative AI models.

• Digital Media

  Acrobat and Adobe Express

  Examples: Acrobat Studio, Acrobat Pro, Acrobat Reader, Acrobat AI Assistant, Express

  Document productivity and quick content creation; the Business Professionals & Consumers group grew 15% in FY2025.

• Digital Experience

  Adobe Experience Platform and GenStudio

  Examples: Experience Platform and apps, GenStudio, Firefly Services

  Enterprise marketing and content supply chain software.

Products are from the FY2025 Form 10-K's Item 1 and MD&A.

96% of FY2025 revenue was subscriptions, recognized ratably over the subscription term, so a change in subscriptions or renewals in one period shows up in revenue only gradually. Remaining performance obligations were $22.5B at FY2025 year-end, up 13%. Product licenses (2%) and services (2%) make up the rest.

• Multi-year / recurring

  Subscriptions (Creative Cloud, Acrobat, Experience Platform and others)

  96% of FY2025 revenue ($22.9B)

  Typical term: Recognized ratably over the subscription term

  Total Adobe ARR was $25.2B at FY2025 year-end, up 11.5%.

• Spot / one-off transaction

  Product

  1% of FY2025 revenue ($325M)

  Typical term: Product revenue, recognized when delivered

  Declining (−16% in FY2025) as subscriptions dominate.

• Short-term contract

  Services and other

  2% of FY2025 revenue ($540M)

  Typical term: Services and other revenue

  Down 10% in FY2025.

Source: Form 10-K (FY2025) — MD&A, revenue

Adobe's 10-K says it competes with software companies, AI companies, hardware makers, operating system developers, and social media companies, describing competing product types for business professionals and consumers, creative professionals, and marketers. No company is named.

Company names link to this site’s analysis where one exists; “site ↗” opens the company’s own website.

Adobe built its Digital Experience business largely through acquisitions — Magento and Marketo (2018), Workfront (2021) — and added Frame.io to Creative Cloud (2021). Its largest attempted deal, Figma, was abandoned with a $1B termination fee paid in FY2024. In April 2026 it bought Semrush.

Cash spent on acquisitions, FY2021–FY2025: $2.83B

1. Apr 2026 (FY2026)

   Semrush Holdings

   $1.87B, primarily cash

   A publicly held brand visibility platform company.

   Stated purpose (company)

   "Enhances our ability to serve marketers at every scale with solutions for search engine optimization, generative engine optimization and agentic search optimization."

   Since then: Results included from the acquisition date.

   Source: Form 10-Q (Q3 FY2026) — Acquisitions · Form 10-K (FY2025) — Liquidity (agreement)

2. Oct 2021 (FY2021)

   Frame.io

   About $1.18B, primarily cash

   A privately held cloud-based video collaboration platform.

   Stated purpose (company)

   Integrated into Creative Cloud.

   Source: Form 10-K (FY2021) — acquisitions

3. Q1 FY2021

   Workfront

   About $1.52B cash

   A privately held workflow platform company.

   Stated purpose (company)

   Integrated into the Digital Experience segment.

   Source: Form 10-K (FY2021) — acquisitions

4. Oct 2018 (FY2018)

   Marketo

   About $4.74B cash

   Older deal, core to today's business

   A privately held marketing cloud platform for business-to-business marketers.

   Stated purpose (company)

   Integrated into the Adobe Marketing Cloud as the Marketo Engagement Platform.

   Since then: Part of today's Digital Experience segment ($5.9B of FY2025 revenue).

   Source: Form 10-K (FY2018) — acquisitions

5. Jun 2018 (FY2018)

   Magento

   About $1.64B

   Older deal, core to today's business

   A privately held commerce platform company.

   Stated purpose (company)

   Integrated into the Adobe Experience Cloud as Magento Commerce Cloud.

   Since then: Part of today's Digital Experience segment.

   Source: Form 10-K (FY2018) — acquisitions

The abandoned Figma acquisition isn't listed as a deal; Adobe paid a $1B termination fee in FY2024. Deal dates are closing dates; Adobe's fiscal year ends in late November or early December.

Inputs (FY2025): free cash flow $9.85B (operating CF − capex); enterprise value $136.3B = market cap $136.68B + debt $6.21B − cash and short-term investments $6.6B; r = WACC of 9.0% using this page’s default assumptions (β 0.95, risk-free 4.0%, market premium 5.5%).

A simplified model for seeing what the market price assumes, not a forecast or a target price. It treats free cash flow as growing at one constant rate forever; the result swings widely with small changes in r and g, and is undefined when g reaches r. Free cash flow here is operating cash flow minus capex, which is after interest — a full DCF of enterprise value would use cash flow before interest. Market cap and enterprise value use the fiscal year-end price, not today’s.

• ✓

  Operating CF ÷ net income: averages 1.47x

  Profit is backed by cash coming in.

• ✓

  Accrual ratio (latest): -9.7%

  A small share of profit rests on accounting estimates.

• ✓

  Core-earnings share (operating income ÷ pretax income): 100%

  Most profit comes from core operations.

• ✓

  Days sales outstanding: 43 → 36 days

  No major slowdown in collecting on sales.

1. 1. Predictable subscription cash flow

   96% of revenue is subscriptions, ARR grew 11.5% to $25.2B, and operating cash flow was $10.0B in FY2025 with capex of only $0.2B.

   What has to hold

   Subscribers keep renewing as AI tools spread.

   The other side

   The 10-K names AI companies and new entrants among its competitors; ratable revenue would show any renewal slowdown only with a lag.

   Evidence: Form 10-K (FY2025) MD&A and Item 1A

2. 2. Shrinking share count

   Shares outstanding fell from 475M (FY2021) to 413M (FY2025), about 13%, as Adobe spent heavily on buybacks; diluted EPS rose from $10.02 to $16.70.

   What has to hold

   Cash flow continues to fund repurchases.

   The other side

   FY2025 buybacks exceeded operating cash flow and were partly funded by more debt ($6.2B at year-end).

   Evidence: SEC EDGAR XBRL; Form 10-K (FY2025) MD&A

3. 3. Valuation reset

   P/E at the FY2025 year-end price was about 19x, down from 42x at FY2024 year-end and 62x at FY2021 year-end, while EPS kept rising.

   What has to hold

   Earnings keep growing at recent rates.

   The other side

   A lower multiple can mean the market expects slower growth; the 10-K doesn't address valuation.

   Evidence: SEC EDGAR XBRL and fiscal year-end prices

P/E and FCF yield above use the fiscal year-end share price, not today's price. Adobe pays no dividend.

1. 1Competition & technology shift

   AI and new competitors

   Company disclosure (summarized from the 10-K)

   The 10-K lists failure to innovate in response to rapid technological change, intense competition — including AI companies, cloud-native companies, and social media platforms with built-in editing — and issues from developing and using AI as risks.

   Company’s stated mitigation

   Building AI into its apps, Firefly models trained on licensed content, and partner models available within its applications.

   This site’s assessment

   Impact High / Likelihood High

2. 2Demand & macro

   Subscription renewals

   Company disclosure (summarized from the 10-K)

   Because revenue is recognized ratably, the 10-K warns that a change in subscriptions or renewals may not be immediately reflected in revenue, so a slowdown could surface with a lag.

   Company’s stated mitigation

   Not stated in the 10-K.

   This site’s assessment

   Impact Med / Likelihood Med

3. 3Governance & quality

   Acquisitions

   Company disclosure (summarized from the 10-K)

   The 10-K says it may not realize the expected benefits of acquisitions. In FY2024 it paid a $1B termination fee when its Figma acquisition was abandoned, and in April 2026 it completed the $1.87B Semrush acquisition.

   Company’s stated mitigation

   Not stated in the 10-K.

   This site’s assessment

   Impact Med / Likelihood Med

4. 4Supply chain

   Service interruptions and third parties

   Company disclosure (summarized from the 10-K)

   The 10-K lists failures of its own IT systems or those of third parties, and its reliance on third-party distributors, sales partners, and other third parties for critical operations, as risks.

   Company’s stated mitigation

   Not stated in the 10-K.

   This site’s assessment

   Impact Med / Likelihood Low

5. 5FX & interest rates

   Currency

   Company disclosure (summarized from the 10-K)

   41% of FY2025 revenue came from outside the Americas; the 10-K says it may not be able to effectively hedge currency exposure. Revaluing at FY2026 opening rates would have raised year-end ARR by about $460M.

   Company’s stated mitigation

   Hedging, which the 10-K says may not be fully effective.

   This site’s assessment

   Impact Med / Likelihood Med

6. 6Law & regulation

   Privacy, AI, and other regulation

   Company disclosure (summarized from the 10-K)

   The 10-K cites increasing regulatory focus on privacy and security, compliance with laws globally, and litigation and regulatory inquiries as risks.

   Company’s stated mitigation

   Not stated in the 10-K.

   This site’s assessment

   Impact Med / Likelihood Med