Adobe FY26 Q2: record $6.62 billion revenue, full-year targets raised
Neutral. Adobe's Q2 FY26 revenue of $6.62 billion rose 13.0% year over year and gross margin held at 89.2%, but GAAP net income of $1.71 billion grew only 1.2% and diluted EPS slipped to $4.25 from $4.60 in Q1. The full-year revenue and non-GAAP EPS targets were raised, yet Q3 guidance implies a step down in margin and a CFO change adds noise.
1 · Expected vs. Actual
Free preview belowGAAP diluted EPS of $4.25 beat last year's $3.94 but fell from $4.60 in the prior quarter, even though revenue rose sequentially. The non-GAAP figure of $5.96 excludes $1.38 per share of stock-based compensation, $0.17 of goodwill impairment, $0.12 of intangible amortization, $0.07 of legal loss contingency and $0.01 of acquisition costs. That is a long add-back list, so the GAAP line is the harder test of this quarter.
Revenue of $6.62 billion was a record, up 13.0% from $5.87 billion a year earlier, or 11.0% in constant currency as reported. Subscription revenue did the work at $6.42 billion, while services and other fell to $113 million from $144 million and product was just $89 million. The mix is narrow: subscription is now 97.0% of total revenue, so the whole story rides on that one line.
Management raised its FY26 revenue target to $26.50–$26.60 billion and non-GAAP EPS to $24.35–$24.45, against GAAP EPS of $17.90–$18.00. Third-quarter revenue guidance of $6.67–$6.72 billion sits about 2% below the $6.83 billion next-quarter estimate, so the near-term bar was not cleared. Q3 non-GAAP operating margin is targeted at about 44.0% versus 45.0% for the full year, which points to a softer quarter ahead.
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Figures on this page come from the company's original SEC filings. The analysis is generated automatically and checked against validation rules, but may still contain errors or omissions. Not investment advice. · Generated 2026-09-17
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