- Prev. close
- $238.14
- Volume
- 1.1M
- Market cap
- $94.4B
Stock and sector context
Tech & Internetinflow- Sector comparison
- Adobe changed -0.28%. The 7 covered Tech & Internet stocks in US averaged +1.49%, with estimated sector flow of inflow.
- Variables to watch
- US interest ratesCloud demandDigital ad spendingPlatform regulation
- Risks to check
- -35% below the high, the downtrend may continue
- Tighter platform regulation
- An ad spending slowdown
This compares price changes among covered stocks in the same market. It does not establish why prices moved. Variables and risks are sector reference lists.
Why a candidate
Match 47/100The match score marks how many conditions overlap on a 0 to 100 scale: the 52-week range, valuation metrics, price change and volume. It is not a probability of rising or a forecast return.
Today's read
Adobe scores 47 out of 100 on today's InverseOne match ranking, 6 of 30 in the US large-cap universe. The stock trades at 13.2x earnings, still inexpensive relative to what the company earns. The gap to its 52-week high is 53%. Today's move of -0.28% came with money flowing out; the broader Tech & Internet sector flow is worth checking.
Data basis: 2026-10-13 close, 10-14 00:20 KST updated, For reference only, not advice
Same-sector stocks, Tech & Internet
Company research
Researched 2026-09-13 02:18 KSTThe share count behind Adobe's per-share figure fell by 29 million in a year, so net income growth of 3.1 percent became 10.5 percent on a diluted per-share basis.
Adobe sells software such as Photoshop and Acrobat on subscription, and $6,582 million of the $6,760 million of revenue in its third quarter of fiscal 2026, which ended on 28 August 2026, came from subscriptions. Operating income rose 8.3 percent to $2,354 million, but the income tax charge climbed from $415 million to $530 million, so net income grew 3.1 percent to $1,827 million. Diluted earnings per share rose 10.5 percent to $4.62 because the share count used in the calculation fell from 424 million to 395 million. The board named the next chief executive on 2 September, and the handover takes effect on 1 December.
Key figures
- Quarterly revenue
- $6.76bn
- Fiscal 2026 Q3
- GAAP operating income
- $2.35bn
- Fiscal 2026 Q3
- Net income
- $1.83bn
- Fiscal 2026 Q3
- Diluted EPS
- $4.62
- Fiscal 2026 Q3
- Total Adobe ARR
- $27.50bn
- 2026-08-28
- Remaining performance obligations
- $22.16bn
- 2026-08-28
The numerator grew 3.1 percent, the denominator shrank 6.8 percent
Diluted earnings per share is net income divided by the share count. Adobe's net income for the third quarter of fiscal 2026 was $1,827 million, $55 million more than the $1,772 million of the same quarter a year earlier. Over the same period the diluted share count used in the calculation fell from 424 million to 395 million, which lifted diluted earnings per share 10.5 percent, from $4.18 to $4.62. The company bought back about 9.5 million shares during the quarter, and the cash flow statement puts repurchases at $2,232 million, or 88 percent of the $2,523 million of cash generated by operating activities in the quarter. The nine-month figures point the same way: net income up 2.9 percent, diluted earnings per share up 9.9 percent from $12.26 to $13.47. The fourth quarter targets assume a diluted share count of about 389 million.
Diluted shares used for earnings per share (millions)
Of $170 million of extra pre-tax income, $115 million went to tax
Operating income rose $181 million, or 8.3 percent, from $2,173 million to $2,354 million. Non-operating items, which combine interest expense, investment gains and other income, shrank from $14 million to $3 million, leaving income before taxes $170 million higher at $2,357 million. Income tax took $115 million of that increase. The provision rose 27.7 percent from $415 million to $530 million, and the company put its GAAP effective tax rate for the quarter at 22.5 percent. Worked out from the year-ago pre-tax income and tax provision, the same ratio was 19.0 percent. The adjusted figures use a different rate: the company applies a fixed long-term non-GAAP tax rate of 18.0 percent for fiscal 2026 through fiscal 2028. On that basis, non-GAAP diluted earnings per share came to $6.13, 15.4 percent above $5.31 a year earlier.
Growth on the year-ago quarter
- Revenue12.9%
- Operating income8.3%
- Pre-tax income7.8%
- Net income3.1%
- Diluted EPS10.5%
How $772 million of extra revenue turned into $181 million of operating income
Third quarter revenue was $772 million higher than a year earlier. Cost of revenue absorbed $121 million of that, research and development $200 million, sales and marketing $188 million, general and administrative $80 million and amortization of intangibles $2 million, leaving operating income $181 million higher. The fastest-growing cost was cost of subscription revenue. While subscription revenue grew 13.7 percent from $5,791 million to $6,582 million, the cost of delivering it rose 24.1 percent from $510 million to $633 million. Research and development and general and administrative expenses grew 18.4 percent and 19.6 percent, both ahead of revenue growth of 12.9 percent. GAAP operating margin therefore slipped from 36.3 percent a year earlier to 34.8 percent. The company's fourth quarter target for GAAP operating margin is 34.0 percent, and 35.0 percent for the full fiscal year.
From extra revenue to extra operating income ($ millions)
- Revenue gain772
- Cost of revenue-121
- R&D-200
- Sales and marketing-188
- G&A-80
- Amortization-2
- Operating income gain181
Goodwill from the Semrush deal and notes that fall due within a year
Goodwill on the balance sheet rose $1,180 million, from $12,857 million on 28 November 2025 to $14,037 million on 28 August 2026. The second quarter report explains why. Adobe completed its acquisition of Semrush, a brand visibility platform company, on 28 April, and of the $1,874 million total purchase price it booked $1,251 million as goodwill and $582 million as identifiable intangible assets. The same report records a $70 million goodwill impairment in the Publishing & Advertising reporting unit. The company said Total Adobe ARR of $27.10 billion at the end of the second quarter included about $480 million from Semrush, and at the end of the third quarter the figure was $27.50 billion. Borrowings also shifted. Current debt, nil at the end of November, stood at $1,597 million at the end of August, while long-term debt fell from $6,210 million to $4,766 million. The second quarter report says the senior notes due in February and April 2027, $1,350 million in all, were reclassified as current, and that the company intends to refinance them on or before the due date, subject to market conditions. The third quarter cash flow statement shows $250 million of debt repayment.
Preliminary Semrush purchase price allocation ($ millions)
- Goodwill1251
- Identifiable intangibles582
- Cash acquired262
- Other net liabilities-221
A chief executive change settled eight days before the results
According to the current report Adobe filed on 8 September, the board on 2 September appointed Anil Chakravarthy, president of the Customer Experience Orchestration business, as president, chief executive officer and a director, effective 1 December 2026. On that date Shantanu Narayen, currently chair and chief executive, retires as chief executive and becomes executive chair of the board. The same filing states that David Wadhwani, president of the Creativity & Productivity business, told the company on 2 September that he will step down effective 27 September and stay on as a senior advisor for a transition period. Eight days after the board decision, on 10 September, Adobe reported its third quarter and set fourth quarter targets of $6.80 billion to $6.85 billion of revenue and $4.65 to $4.70 of GAAP diluted earnings per share. The full-year revenue target is $26.576 billion to $26.626 billion. Remaining performance obligations were $22.16 billion at the end of the quarter, and the company said current remaining performance obligations were 67 percent.
Chief executive transition dates
- 2026-09-02Board appoints Anil Chakravarthy as next president and chief executive, and David Wadhwani gives notice he will step down
- 2026-09-03Appointment announced in a press release
- 2026-09-27Wadhwani's resignation takes effect, and he stays on as a senior advisor for a transition period
- 2026-12-01Chakravarthy's appointment takes effect, and Shantanu Narayen becomes executive chair
Common questions
- Why did Adobe's earnings per share grow faster than its net income?
- Because the share count fell. Net income for the third quarter of fiscal 2026 rose 3.1 percent to $1,827 million, but the diluted share count used for the per-share figure dropped from 424 million to 395 million, so diluted earnings per share rose 10.5 percent from $4.18 to $4.62. The company repurchased about 9.5 million shares in the quarter.
- When does Adobe's chief executive change?
- On 1 December 2026. The board decided on 2 September to appoint Anil Chakravarthy, president of the Customer Experience Orchestration business, as president and chief executive from that date, and Shantanu Narayen, the current chief executive, becomes executive chair.
- What did the Semrush acquisition add to Adobe's balance sheet?
- $1,251 million of goodwill and $582 million of identifiable intangible assets. Adobe completed the deal on 28 April 2026 for a total of $1,874 million, and the intangibles split into $415 million of purchased technology, $107 million of customer contracts and relationships and $60 million of trademarks. These are the preliminary allocations published in the second quarter report.
Sources
- 1.Third quarter fiscal 2026 earnings release (Form 8-K, Exhibit 99.1) U.S. Securities and Exchange Commission EDGAR, as of 2026-09-10
- 2.Quarterly report for the quarter ended 29 May 2026 (Form 10-Q) U.S. Securities and Exchange Commission EDGAR, as of 2026-06-15
- 3.Chief executive appointment and other officer changes (Form 8-K, Item 5.02) U.S. Securities and Exchange Commission EDGAR, as of 2026-09-08
Reference information compiled from public material. Not investment advice; decisions and their consequences rest with the investor.
See research on other stocks →Talk about this stock
Today's talking points
- It sits low in its 52-week range (27).
- Tech & Internet, its sector, drew the most money today.
- It is 53% below its 52-week high.
Three months out, which way do you see it?
Nobody has answered yet. Sign in to be the first.
These are answers picked by members, not investment advice.
These figures are reference estimates built from price and volume: a starting point for narrowing down ideas, not a buy or sell signal.