Adobe Q3 FY2026: revenue up 13% to $6.76 billion, margin slips
Adobe closed FY2026 Q3 with $6.76 billion of revenue, up 13%, GAAP EPS of $4.62 and a raised full-year target — a solid quarter that still leaves the story unresolved. Read it in three places: the 88.7% gross margin, a Q4 revenue midpoint that sits below consensus, and EPS growth that outran net income because the share count shrank. Our view is Neutral; the numbers below show why.
1 · Expected vs. Actual
Free preview belowGAAP EPS was $4.62 and non-GAAP was $6.13, against $4.18 and $5.31 a year ago. The $1.51 gap between the two is mostly stock-based and deferred compensation of $1.38 a share, so the adjusted number is a management definition rather than cash earnings. Net income rose only 3.1% to $1.83 billion while EPS rose 10.5%, because the diluted share count fell to 395 million from 424 million.
Revenue was $6.76 billion, up 13% from $5.99 billion a year ago, or 12% in constant currency. Subscription revenue of $6.58 billion did nearly all the work at 97.4% of the total and grew 13.7%, while services and other fell to $111 million from $129 million and product was roughly flat at $67 million. The mix is now almost purely recurring, which is why small shifts in subscription economics matter so much.
Q4 revenue is targeted at $6.80–$6.85 billion and non-GAAP EPS at $6.30–$6.35, with full-year targets raised to $26.58–$26.63 billion of revenue and $24.45–$24.50 of non-GAAP EPS. The $6.83 billion Q4 revenue midpoint sits roughly 2% below the $6.97 billion next-quarter consensus in our data. Adobe's own record argues for caution in reading that gap as a warning, since the company has beaten its quarterly midpoint four times running.
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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 2026-11-03
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