Adobe Reports $6.4B Q1 Sales, Forecasts 10.2% ARR Growth as CEO Steps Down
A Wall Street analyst lowered Adobe’s rating with no new price target disclosed, as multiple peers received upgrades. Adobe reported Q1 sales of $6.40B (+12%), adjusted EPS of $6.06 (+19%) and forecast 10.2% ARR growth for fiscal 2026 as CEO Shantanu Narayen prepares to step down.
1. Analyst Downgrade
A recent Wall Street research call downgraded Adobe’s rating without disclosing a new price target, contrasting with several sector peers receiving upgrades. Notable upgrades included HSBC raising Nio to Buy at $6.80 and Wells Fargo lifting Ollie’s Bargain Outlet to Overweight at $130.
2. Q1 Financial Results
In fiscal Q1, Adobe delivered $6.40 billion in revenue, up 12% year-over-year, and achieved adjusted EPS of $6.06, a 19% increase. Operating cash flow reached a record $2.96 billion, the company repurchased 8.1 million shares, and ended the quarter with $6.89 billion in cash and short-term investments.
3. Guidance and Leadership Transition
Adobe projects total annual recurring revenue growth of about 10.2% for fiscal 2026 and emphasized its focus on AI-driven solutions across creative and marketing platforms. CEO Shantanu Narayen will step down once a successor is appointed, marking a major leadership change as the company pursues its growth strategy.