BusinessJun 12, 2026
Adobe's Earnings Were Strong. Its AI Problem Isn't Going Away
Enterprise Shifts
Rhea Lobo
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Adobe reported record second-quarter revenue, raised its full-year guidance, and still watched its stock fall in after-hours trading.
Wall Street had expected adjusted earnings of $5.82 a share on revenue of $6.45B, per FactSet. Adobe delivered $5.96 a share in adjusted earnings and $6.62B in total revenue.
Adobe's AI-first annualized recurring revenue tripled year-over-year and crossed $500M.
On the back of that momentum, Adobe lifted its full-year revenue target to a range of $26.5B to $26.6B.
CEO Shantanu Narayen credited "strong AI-driven demand across our customer groups" for the results.
The earnings release also announced the departure of CFO Dan Durn on Jun. 15, 2026.
Steve Day, a 20-year Adobe finance veteran currently serving as SVP of Corporate Finance, will step in as interim CFO.
That's the smaller transition. Narayen himself is stepping down after nearly two decades leading the company.
He joined Adobe at the dawn of subscription software, a model he helped build into a dominant business.
His exit comes as AI raises questions about what that business looks like next.
Analysts widely expect an internal successor, with David Wadhwani and Anil Chakravarthy as the leading candidates, per MarketWatch.
Jefferies analyst Brent Thill favors Wadhwani, citing his public-company CEO experience and two stints at Adobe totaling nearly two decades of institutional knowledge.
Thursday's selloff is part of a longer pattern. Adobe shares have fallen after eight of its last 10 earnings reports, per Barron's.
The stock entered the session down roughly 36% for the year, trading at roughly 8.8 times forward earnings.
The core investor worry isn't execution. It's whether cheaper AI tools will erode demand for Adobe's creative software over time.
Third Bridge analyst Dylan Koehler wrote that Adobe's long-term question is whether it can become the central AI orchestration layer for enterprise creativity.
Of 37 analysts surveyed by FactSet, 17 rate the stock a Buy, 17 a Hold, and three a Sell.
Stifel's J. Parker Lane cut his price target to $350 from $400 while keeping a Buy rating.
The numbers were good enough to lift annual guidance. Convincing the market is a separate challenge.
