AI boom powers Adobe to astonishing record revenue and profit growth

Generative Fill before and after — (Image credit: Adobe)

Adobe reported record financial results for the first quarter of fiscal year 2026, highlighting strong subscription growth and surging demand for its AI-powered creative and productivity platforms.

The company, headquartered in San Jose and traded on Nasdaq under the ticker ADBE, said revenue reached $6.40 billion for the quarter ending February 27, marking a 12 percent year-over-year increase, or 11 percent growth in constant currency.

Screenshots of Adobe Photoshop's generative AI — (Image credit: Gareth Bevan / Digital Camera World)

“Adobe delivered record Q1 results with AI-first ARR more than tripling year over year and subscription revenue growing 13 percent. Our mission to empower everyone to create represents an even larger opportunity as content powers all experiences in the AI era.”
Shantanu Narayen, chair and CEO, Adobe

Adobe reported diluted earnings per share of $4.60 on a GAAP basis and $6.06 on a non-GAAP basis. Annualized Recurring Revenue (ARR) exited the quarter at $26.06 billion, underscoring the strength of Adobe’s subscription-driven business model as demand continues to expand across its creative, marketing, and productivity ecosystems.

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Dan Durn, executive vice president and CFO, Adobe had this to say:

“Adobe delivered 13 percent subscription revenue growth and record Q1 cash flow of $2.96 billion. As we accelerate AI-powered capabilities across creativity, productivity and customer experience orchestration, Adobe is well positioned for continued profitable growth.”

Operating performance also remained strong. GAAP operating income reached $2.42 billion during the quarter, while non-GAAP operating income totaled $3.04 billion. GAAP net income came in at $1.89 billion, compared with $2.49 billion on a non-GAAP basis. The company also generated record cash flow from operations of $2.96 billion and ended the quarter with Remaining Performance Obligations of $22.22 billion, with current RPO accounting for 67 percent.

Adobe Firefly GIF showing the expanding of a background and removal of an object — (Image credit: Adobe)

Subscription growth was led by Adobe’s Customer Group business, which generated $6.17 billion in subscription revenue, up 13 percent year over year. Business Professionals and Consumers contributed $1.78 billion in subscription revenue, growing 16 percent, while Creative and Marketing Professionals delivered $4.39 billion, representing 12 percent growth.

During the quarter, Adobe also repurchased approximately 8.1 million shares and said its financial outlook assumes current macroeconomic conditions while excluding any potential contribution from its pending acquisition of Semrush Holdings, which remains subject to regulatory approvals and customary closing conditions.

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For nearly two decades Sebastian's work has been published internationally. Originally specializing in Equestrianism, his visuals have been used by the leading names in the equestrian industry such as The Fédération Equestre Internationale (FEI), The Jockey Club, Horse & Hound, and many more for various advertising campaigns, books, and pre/post-event highlights.

He is a Fellow of the Royal Society of Arts, holds a Foundation Degree in Equitation Science, and holds a Master of Arts in Publishing. He is a member of Nikon NPS and has been a Nikon user since his film days using a Nikon F5. He saw the digital transition with Nikon's D series cameras and is still, to this day, the youngest member to be elected into BEWA, the British Equestrian Writers' Association.

He is familiar with and shows great interest in 35mm, medium, and large-format photography, using products by Leica, Phase One, Hasselblad, Alpa, and Sinar. Sebastian has also used many cinema cameras from Sony, RED, ARRI, and everything in between. He now spends his spare time using his trusted Leica M-E or Leica M2, shooting Street/Documentary photography as he sees it, usually in Black and White.

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