Adobe Posts $1.89 Billion Q1 Profit as Revenue Climbs 13% to $6.40 Billion
Adobe Inc. (NASDAQ: ADBE), a digital media and marketing software company, reported net income of $1.89 billion for the first quarter of fiscal 2026, up 4.3% from $1.81 billion in the prior-year period. Total revenue rose 13% to $6.40 billion.
Adobe Inc. (NASDAQ: ADBE), a digital media and marketing software company, reported net income of $1.89 billion for the three months ending February 27, 2026, up from $1.81 billion in the same quarter a year earlier. The 4.3% increase came as total revenue jumped 13% to $6.40 billion from $5.71 billion. Read more earnings reports.
Operating income for the quarter reached $2.42 billion, up 12% from $2.16 billion in the first quarter of fiscal 2025. Gross profit expanded to $5.73 billion from $5.09 billion, reflecting a margin improvement as cost of revenue rose just 6.8% to $664 million.
Diluted earnings per share came in at $4.60, up from $4.14 in the year-ago period. The improvement reflected both higher net income and a reduced share count, with weighted average diluted shares falling to 411 million from 438 million.
Revenue Breakdown
Subscription revenue drove the top line, climbing to $6.20 billion from $5.48 billion. Product revenue contributed $27 million, flat with the prior year, while services and other revenue totaled $171 million.
By segment, Digital Media revenue rose to $4.39 billion from $3.92 billion, while Digital Experience revenue increased to $1.78 billion from $1.53 billion.
Balance Sheet and Cash Flow
Total assets stood at $29.70 billion as of February 27, 2026, up slightly from $29.50 billion at the end of fiscal 2025. Cash and cash equivalents increased to $6.33 billion from $5.43 billion, though the company reduced its short-term investments to $558 million from $1.16 billion.
Long-term debt declined to $5.38 billion from $6.21 billion. Current liabilities rose to $11.39 billion from $10.20 billion, while total liabilities increased to $18.27 billion from $17.87 billion.
Cash from operations for the quarter totaled $2.96 billion, up 19% from $2.48 billion in the prior-year period. The company generated $474 million from investing activities, reversing an outflow of $484 million a year earlier. Cash used in financing activities was $2.54 billion, down from $2.84 billion.
Stockholders' equity decreased to $11.43 billion from $11.62 billion at the end of fiscal 2025. Common shares outstanding fell to 406 million from 413 million as the company continued share repurchase activity.
Key Financials
| Metric | Q1 FY2026 | Q1 FY2025 | Change |
|---|---|---|---|
| Total Revenue | $6.40 billion | $5.71 billion | +12.0% |
| Operating Income | $2.42 billion | $2.16 billion | +11.8% |
| Net Income | $1.89 billion | $1.81 billion | +4.3% |
| Diluted EPS | $4.60 | $4.14 | +11.1% |
| Cash from Operations | $2.96 billion | $2.48 billion | +19.2% |
Operating expenses for the quarter totaled $3.32 billion, up 13% from $2.93 billion. Income tax expense rose to $533 million from $371 million, driving an effective tax rate increase.