ADBE
ADOBE INC.
Technology • CIK: 0000796343
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Market Cap
$110.12B
P/E (TTM)
15.3x
Rev Growth (TTM)
+11.0%
Net Margin (TTM)
29.5%
FCF Yield (TTM)
9.4%
FCF Margin (TTM)
42.2%
What Changed
10-Q Q1 2026 vs 10-Q Q1 2025
CEO TransitionShantanu Narayen as CEO (no succession disclosed)→Narayen stepping down as CEO after 18 years;...
Net Margin31.69% (Q1 2025: net income $1,811M on revenue $5,714M)→29.52% (Q1 2026: net income $1,889M on revenue $6,398M)...
FTC/DOJ Investigation (ROSCA)Active — DOJ filed civil complaint seeking injunctive...→Not disclosed in Q1 2026 filing — absent from...
Legal Settlement Accrual$0 (no material accrual disclosed in Q1 2025)→$62M loss contingency accrual for outstanding...
Semrush AcquisitionNo pending acquisitions disclosed→$1.9B acquisition of Semrush Holdings agreed; financed...
Net margin recovery: Q2 FY2026 GAAP EPS guided $4.35–$4.40 (below Q1's $4.60) —...·Semrush integration: $1.9B acquisition expected to close Q2 FY2026 — monitor...·ARR growth trend: watch whether 10.9% stabilizes or decelerates further in Q2;...
Filing Intelligence
6.0/10
10-Q filed Mar 25, 2026 • Q1 2026
Executive Summary
Management expresses confidence in meeting future financial obligations, supported by healthy cash reserves, operating cash flow, and available credit facilities, despite acknowledging macroeconomic...
Key Concerns
- ●Reclassifications were made to the condensed consolidated statements of cash flows to conform to current year presentation; however,...
- ●Shareholder class action and derivative lawsuits are ongoing, alleging misleading statements and breach of fiduciary duties, with...
- ●The company has accrued provisions for legal liabilities, but these are noted as not material to financial statements as of the reporting...
Key Strengths
- ●Adobe demonstrated robust revenue growth (12% YoY) and strong ARR expansion (10.9% YoY), driven by its Creative Cloud and Acrobat...
- ●Operating cash flow increased significantly (19% YoY), indicating strong operational efficiency and effective cash generation, bolstered by...
- ●The company is actively deploying capital through a substantial share repurchase program and a strategic acquisition of Semrush Holdings,...
Cash Flow Health
Free Cash Flow8/8 positive
TTM$10.3B
Q1 '26
$2.9B-7%
Q4 '25
$3.1B+47%
FCF Margin
TTM42.2%
Q1 '2645.7%-10%
Sector: 9.1%Top 10%
OCF Margin43.0%
OCF/NI1.46x
CapEx Coverage55.3x
FCF Yield9.4%
FCF Growth (2Y)+12%
Cash Conversion Cycle
-22 days
DSO: 31+DIO: 0−DPO: 52
Capital Allocation & Returns
Shareholder Friendly
Total Shareholder YieldTTM
TTM9.5%
Div Yield0.0%
+Buyback (TTM)9.5%
Strong capital returns to shareholders
Dividend & Payout Metrics
Dividend Yield (TTM)0.0%
Free Cash Flow (TTM)$10.3B
Stock Repurchases (TTM)$10.5B
Capital Return / FCF101.9%
Est. Dividends Paid (TTM)$0
Shows how management rewards shareholders
Operational Efficiency & Returns
Return on Invested CapitalTTM
45.9%
Stable
+0.1% YoY+13.7%
P25MedianP75
75th pctl (med: 0.1%)
DuPont BreakdownROIC = Margin × Turn × (1+D/E)
NOPAT Margin
29.4%
8Q: 29.4%
Asset Turnover
0.84x
8Q: 0.78x
Leverage (1+D/E)
1.07x
D/E: 0.07x
DuPont: 26.6% ≈ 45.9% ROIC
Asset & CapEx Efficiency
Fixed Asset Turn
12.97x
8Q:12.18x
+295.9%
Invested Cap Turn
1.56x
8Q:1.39x
+46.8%
CapEx Intensity
1.2%
8Q:1.1%
CapEx/Depreciation
0.25x
Depreciation Rate Trend
⚠ Declining -4.5%
Asset-based ROIC formula
QUARTERLY TRENDS
Last 8 quarters + TTM
| Metric | TTM | Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2025 | Q3 2024 | Q2 2024 |
|---|---|---|---|---|---|---|---|---|---|
Revenue | $24.5B | $6.4B↑3.3% | $6.2B↑3.4% | $6.0B↑2.0% | $5.9B↑2.8% | $5.7B↑1.9% | $5.6B↑3.7% | $5.4B↑1.9% | $5.3B |
Operating Income | $9.0B | $2.4B↑6.9% | $2.3B↑4.0% | $2.2B↑3.0% | $2.1B↓2.5% | $2.2B↑10.5% | $2.0B↓1.8% | $2.0B↑5.7% | $1.9B |
Net Income | $7.2B | $1.9B↑1.8% | $1.9B↑4.7% | $1.8B↑4.8% | $1.7B↓6.6% | $1.8B↑7.6% | $1.7B↓0.1% | $1.7B↑7.1% | $1.6B |
Operating Cash Flow | $10.5B | $3.0B↓6.4% | $3.2B↑43.8% | $2.2B↑0.3% | $2.2B↓11.7% | $2.5B↓15.0% | $2.9B↑44.5% | $2.0B↑4.2% | $1.9B |
Free Cash Flow | $10.3B | $2.9B↓6.6% | $3.1B↑47.0% | $2.1B↓0.8% | $2.1B↓12.7% | $2.5B↓14.5% | $2.9B↑46.3% | $2.0B↑3.4% | $1.9B |
Total Equity | N/A |
Valuation Analysis
Fair Value
Price-to-EarningsTTM
15.3x
Volatile
8Q: 105.4x-8685%
Valuation Lenses
Earnings
15.3x
vs – sector
Cash Flow
10.1x
EV/FCF vs –
Growth-Adj
1.2xPEG
Fair for growth
Quality-Adj
0.3P/E per %ROIC
ROIC: 45.9%
Shareholder Returns
Dividend
–
Buyback
9.5%
Total Yield
9.5%
Market Cap$110.12B
EV$103.87B
Multi-angle valuation analysis with sector context
Business Quality & Moat
Overall Quality Score
93/100
Exceptional
Composite score: Returns (40%) + Consistency (30%) + Earnings Quality (30%)
Returns on Capital
Return on Equity (ROE)Top 10%
61.2%
8Q:–
Return on Invested Capital (ROIC)Top 25%
45.9%
8Q:–
+13.7%
vs Sector:0.1%
DuPont Analysis (ROIC = NOPAT Margin × Asset Turnover)
NOPAT Margin: 29.4%
Asset Turnover: 0.84x
Earnings Quality
Cash Conversion
1.46x
OCF / Net Income ✓
FCF Consistency
–
Positive quarters
Competitive Moat Indicators
Pricing Power
Gross Margin89.4%
Capital Efficiency
Invested Capital Turnover1.56x
Working Capital
Cash Conversion Cycle-22 days
Growth Quality & Momentum
Moderate Growth
Growth Quality Score
67/100
Growth 40%
Margins 30%
FCF 20%
Consistency 10%
Growth Rates
Revenue Growth YoY
11.0%
OpInc Growth YoY
11.8%
EPS Growth YoY
13.1%
FCF 3Y CAGR
12.1%
Growth Quality Analysis
✓Sustainability Index: 7.5/10 - Highly sustainable growth
Margin Quality & Sustainability
Low Quality
Profitability Cascade
Gross
89.4%
Operating
36.6%
Top 25% in sector
Net
29.5%
Margins Unknown
Earnings Quality Signals
SBC / Revenue
—
FCF vs Net Gap
+12.7 pts
FCF: 42.2% | Net: 29.5%
Quality = stability + cash conversion + low dilution
Balance Sheet & Solvency
Fortress
Net Debt / EBITDA
Net Cash
(0.0x)Net Cash: $6.04B
Interest Coverage
–
+Net cash position: $6.04B
Balance sheet risk & solvency analysis