Adobe reported record revenue of $6.62 billion, beat earnings estimates, and raised its full-year guidance, but shares fell after it disclosed delaying price hikes and ARR growth will slow. Freemium MAUs jumped from 50 million to 90 million and Acrobat/Express MAUs from 700 million to 850 million, while CFO departure adds execution risk.
Adobe posted record quarterly revenue of $6.62 billion, beating consensus earnings estimates and raising its full-year guidance. Despite strong top-line results, investors focused on deeper strategic shifts affecting future growth.
Adobe is rolling out a freemium model for AI tools in Firefly and Acrobat to drive user acquisition. Creative Freemium MAUs surged from 50 million to 90 million, and Acrobat/Express MAUs climbed from 700 million to 850 million year-over-year.
The freemium push involves deferring planned price hikes and optimizing Creative Cloud monetization, which will slow second-half ARR growth. Management emphasized this deliberate trade-off to build a larger user base before monetization.
The CFO will depart on June 15, 2026, while the CEO search continues, heightening execution risk. The company expects AI-first ARR, which tripled to $500 million year-over-year, to prove the strategy's payback in 2027.
