ADBE · Q2 FY2026
ADOBE INC. Q2 FY2026 earnings analysis
By SageNoodle ResearchBullish
| Metric | Actual | Estimate | Result |
|---|---|---|---|
| Revenue | $6.62B | $5.87B (yr ago) | Beat |
| EPS | $4.25 GAAP | $3.94 GAAP (yr ago) | Beat |
| Free Cash Flow | $2.11B | $2.14B (yr ago) | Miss |
| Gross Margin | 89.2% | 89.1% (yr ago) | Beat |
| Operating Margin | 33.8% | 35.9% (yr ago) | Miss |
What changed
Revenue increased 12.7% year over year to $6.62 billion, supported by 14.0% subscription growth and AI-first ARR that more than tripled to over $500 million. GAAP EPS rose 7.9%, but operating margin contracted 2.1 percentage points and free cash flow declined 1.7%; Adobe nevertheless raised its FY2026 revenue and non-GAAP EPS targets.
Impact on the investment thesis
With no prior SageNoodle valuation, this update establishes fair value at $287.20 per share using the midpoint of Adobe's FY2026 GAAP EPS target and an assumed 16.0x multiple. The quarter supports that valuation through double-digit subscription growth and higher guidance, although weaker GAAP margin and cash conversion prevent a more aggressive multiple.