What Management Said

Read the full Q1 2026 transcript ↗

For more information on those risks, please review today's earnings release and Adobe's SEC filings. Our reported results include GAAP growth rates and non-GAAP growth rates, including constant currency rates. During this presentation, Adobe's executives will refer to revenue growth in constant currency rates unless otherwise stated. Non-GAAP reconciliations are available in our earnings release and on Adobe's Investor Relations website.

Earlier today, we announced that I will be transitioning from my role as CEO after over 18 years and 100 earnings calls. Let me outline what Adobe is doing to drive our top-line growth while maintaining a high level of profitability. Our growth has always been fueled by attracting new users, individual consumers, students, and business professionals into our products, delighting them and driving adoption. In Q1, we surpassed 850 million monthly active users of Acrobat, Creative Cloud, Express and Firefly, achieving 17% year-over-year growth, a clear indication that we have both strong usage and a foundation for monetization.

In Q1, globally, we achieved over 30% year-over-year growth in AEP and apps, as well as Adobe GenStudio ending ARR. We had a strong start to the year, achieving $6.4 billion in revenue in Q1, representing 11% year-over-year growth. GAAP earnings per share for the quarter was $4.60, and non-GAAP earnings per share was $6.06, representing 11% and 19% year-over-year growth, respectively. Importantly, we saw tremendous MAU growth in our new initiatives that dampens ARR in the short term, but sets us up to deliver in the quarters ahead.

What went well
  • Adobe achieved Q1 revenue of $6.40 billion, growing 11% year-over-year in constant currency, with non-GAAP EPS of $6.06 up 19% year-over-year.
  • Total Adobe ending ARR reached $26.06 billion, growing 10.9% year-over-year, with total customer group subscription revenue of $6.17 billion up 13%.
  • Monthly active users of Acrobat, Creative Cloud, Express, and Firefly surpassed 850 million, achieving 17% year-over-year growth, while creative freemium MAU crossed 80 million, growing over 50% year-over-year.
  • ARR from AI-first applications more than tripled year-over-year, and Firefly subscription and credit pack ending ARR grew 75% quarter-over-quarter with generative credit consumption up more than 45% quarter-over-quarter.
  • Q1 delivered a record cash flow from operations of $2.96 billion, and enterprise strength continued with AEP and apps and GenStudio ending ARR each growing over 30% year-over-year and customers with over $10 million ARR up greater than 20%.
What went wrong
  • The traditional standalone stock book of business, worth about $450 million, saw a steeper and faster than expected decline; excluding it, ARR growth would have been about 11.2% versus the reported 10.9%.
  • Significant MAU growth from new creative freemium offerings dampened near-term ARR, since freemium users must move through paywalls before converting, creating a phase shift in revenue.
  • Shantanu Narayen announced he will transition out of the CEO role after over 18 years, introducing leadership uncertainty as the board runs a successor search expected to take a few months.

Guidance Changes

MetricPeriodCurrent guidance
Total Adobe revenueQ2 FY2026$6.43 billion to $6.48 billion (new quarterly guide, excludes Semrush contribution)
Non-GAAP EPSQ2 FY2026$5.80 to $5.85 (new quarterly guide)
GAAP EPSQ2 FY2026$4.35 to $4.40 (new quarterly guide)
Total Adobe ARR growthFY202610.2% (reaffirmed, does not yet include Semrush)
Total Adobe revenue and EPS targetsFY2026reaffirmed (reaffirmed FY26 targets, which exclude Semrush pending its expected Q2 close)

Performance Breakdown

MetricYoYNote
Total revenue +11% constant currency, +12% reported $6.40 billion driven by Acrobat and Express, Creative Cloud Pro, CXO enterprise, and AI-first applications
Non-GAAP EPS +19% $6.06 on disciplined execution
GAAP EPS +11% $4.60
Business professionals and consumers subscription revenue +15% constant currency, +16% reported $1.78 billion on double-digit ARR growth across geographies and Acrobat AI Assistant ARR up approximately 3x
Creative and marketing professionals subscription revenue +11% constant currency, +12% reported $4.39 billion driven by CC Pro
Total Adobe ending ARR +10.9% $26.06 billion; about 11.2% excluding the declining stock business
AEP and apps and GenStudio ending ARR +30% each enterprise demand for customer experience orchestration and content supply chain

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Freemium and MAU-first strategydriving new user acquisition as a leading indicatorintentional freemium approach that dampens near-term ARR through a phase shift but builds foundation for accelerated growth in the back half—
CEO transitionNarayen leading as long-tenured CEONarayen announced transition after 18 years and 100 earnings calls, staying on as Chair while the board runs a search expected to take a few months—
Traditional stock businesspart of the creative offeringroughly $450 million book declining faster than expected as customers shift to generative AI, with strategy to offer combined stock plus generative AI—
AI-first applicationsemerging portfolioARR more than tripled year-over-year, positioned by Narayen as the next billion-dollar business—
Platform and model partnershipsintegrations with leading AI platformsAcrobat and Express launched for ChatGPT with Copilot, Claude, and Gemini to follow, plus over 30 third-party models in Firefly—

Q&A Summary

Will CRPO coverage of next-twelve-month revenue structurally increase over the coming years?
Durn said constant currency CRPO growth was about a point better than Q4 and he sees no reason historical trends translating RPO and CRPO to revenue would inflect to a different dynamic.
What is the board looking for in Adobe's next CEO?
Narayen said Adobe is at its core a product company and the opportunity is looking around the corner at the AI opportunity across creativity and marketing, and he is confident the board and special committee will run a great search.
What use cases are driving the 45% sequential jump in generative credit consumption, especially in video and audio?
Wadhwani said AI has moved from a fun toy to being integrated into workflows, with more people generating higher resolution and higher modality content in more places, and video generative actions up more than 8x and audio doubling year-over-year.
What drove the acceleration in revenue growth given the stock setback?
Narayen said better ARR to revenue conversion, retention, and linearity drove it, and noted the stock business is about a $450 million book; excluding it, ARR growth would have been roughly 11.2% versus 10.9%.
What is the timeframe for the foundation-building initiatives to become ARR-driving?
Narayen said MAU is the right early indicator much like Reader was, the BP&C business is growing mid-teens, and revenue from freemium is phase-shifted; he pointed to the tripled AI-first book as the next billion-dollar business.
Why was ARR dampened by AI MAU growth, when does net new ARR turn positive, and what is the CEO search timeline?
Narayen said traffic is going up and to the right and Adobe can route it to immediate ARR or higher long-term value, and reaffirmed targets imply double-digit ending book growth for the remaining quarters; the search should take a few months.
How do the newly announced advertising platform partnerships fit an orchestration role rather than competition?
Narayen said enterprises look to Adobe for brand visibility, acquisition, and engagement, and ad platforms value Adobe helping create campaigns faster and prove ROI, while only two or three large models will succeed so offering model choice is strategic.
Would you consider taking margin down to grow faster, given greater than 47% operating margin and softer net new ARR?
Narayen said Adobe spends to drive long-term value especially in Firefly and Express marketing, is constantly getting more efficient below the surface, and tracks token usage as a sign of AI product value.

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Q1 2026 call
Reported 2026-03-12 · figures from the Adobe Inc. Q1 2026 earnings call.

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