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Adobe (ADBE) edged past Q4 EPS and revenue expectations with non-GAAP EPS of $5.50 and revenue of $6.19 billion, up 14% and 10% yr/yr, respectively. More importantly, the company issued upside guidance for 1Q26 revenue of $6.25-$6.30 bln and FY26 revenue of $25.90-$26.10 bln. Last quarter's in-line Q4 guidance triggered a sharp stock selloff amid concerns over AI demand and competition, but this report shows reacceleration.

• Digital Media revenue hit a record $4.62 bln in Q4, up 11% yr/yr, with ending ARR of $19.2 billion also growing 11.5%.
• Digital Experience revenue rose 9% to $1.52 bln, with subscription revenue up 11% to $1.41 bln, driven by Adobe Experience Platform growth over 40% and demand for agentic tools like Brand Concierge.
• Total Adobe ARR ended FY25 at $25.2 bln (revalued to $25.66 bln entering FY26), up 11.5% yr/yr, with AI-influenced ARR now exceeding one-third of the book.
• ADBE targets double-digit FY26 ARR growth (10.2% or $2.6 bln net new), fueled by AI innovations like Firefly models (integrated with 25+ partners in apps like Photoshop), agentic interfaces in Acrobat/Express, Firefly Services/Foundry for custom enterprise models, and GenStudio for content supply chains.
• Generative credit consumption tripled qtr/qtr across Creative Cloud, Firefly, and Express, boosting upsell to higher plans and add-ons. Key wins include over 100 Firefly Services deals and strong MAU growth (Acrobat/Express at 750 million, up 20%).

Briefing.com Analyst Insight:

ADBE posted solid Q4 results and raised FY26 guidance, signaling AI momentum amid prior skepticism on AI revenue acceleration. Record Digital Media ARR and tripled generative credit usage highlight traction in Firefly, agentic tools, and freemium-to-paid conversion, with over 75% of net new ARR from subscriptions/upsell. While FY26 ARR guide of 10.2% trails FY25's 11.5%, it marks the highest net new ARR target ever at $2.6 bln, underpinned by enterprise strength (25% more $10 mln+ ARR customers) and innovations like Firefly Foundry. Competitive pressures persist, but Semrush acquisition, closing 1H26, bolsters brand visibility in agentic web/LLMs. At a premium valuation, execution on AI monetization will determine if growth sustains beyond double-digits.