Episode Details

Adobe Inc. (ADBE) Q3 FY2026 — ADBE closed the regular September 10 session at $248.83. The saved after-market trade is $244.20 at 20:33:38 UTC, down 1.86% from that close; a full next-session reaction is pending. Adobe reports one billion monthly active users across creativity and productivity offerings. Our Q3 FY2026 analysis asks how that reach becomes owner value: paid AI conversion, comparable-currency recurring revenue, operating margins, employee compensation and disciplined repurchases. THE CALL: HOLD (3/5, MODERATE) — base-case value ~$300.00 vs ~$244.20 today. KEY METRICS: - Q3 revenue $6.760B, up 12.89%; adjusted EPS $6.13 versus $6.08 saved vendor estimate - GAAP operating profit $2.354B, up 8.33%; adjusted operating profit $2.974B, up 7.25% - GAAP operating margin 34.82%, down 147 basis points; adjusted margin 43.99%, down 232 basis points - Total ARR $27.500B; computed growth 11.16% against the same-FX prior Q3 base - Monthly active users 1 billion; AI-first ARR growth above 150%, current absolute amount undisclosed - Q3 FCF $2.438B; less SBC $539M gives an analytical owner-cash proxy of $1.899B - Trailing FCF less SBC $8.521B; trailing cash repurchases $9.295B - Cash and short-term investments $5.639B; funded debt carrying values $6.363B; net debt $724M What to watch: Reassess positively with at least 10% same-FX ARR growth, 8% RPO growth and $8.5B trailing free cash flow less SBC. Below 8% ARR growth, 5% RPO growth or $7.5B trailing owner-cash proxy would challenge the thesis. Q4 checkpoints: at least $6.825B revenue, 44% adjusted operating margin and 34% GAAP margin. Conditional valuation entry: $225 with the business assumptions intact. Full research packet: https://chargedalpha.com/research/adbe-q3-fy2026 Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.