Adobe reported upbeat fiscal Q3 results with non-GAAP earnings and revenue exceeding estimates, but overall revenue growth decelerated. Analyst takeaways are mixed, highlighting strong AI-first ARR growth but also a slowdown in overall ARR and some concerns about future net new ARR.
Adobe Inc. reported fiscal Q3 results that, while exceeding consensus on earnings and revenue, showed a slight deceleration in overall revenue growth. This mixed performance has led to neutral ratings from Citizens JMP Securities and BTIG. A key positive is the significant growth in AI-first Annual Recurring Revenue (ARR), which more than doubled year-over-year. However, overall ARR growth decelerated, and management's unchanged fiscal 2027 ARR guidance implies a substantial decline in net new ARR for Q4. This presents a nuanced picture for traders: strong AI adoption is a long-term opportunity, but the broader growth slowdown and implied future ARR trends could temper short-term enthusiasm.