ADOBE INC. Q1 FY2026 earnings call

• AI transformation with customer-centric product strategy, targeting business professionals and consumers with AI-infused products.
• Growth drivers include new user acquisition (Creative Freemium MAU crossed 80 million, growing 50% year-over-year), AI usage growth (generative credit consumption increased more than 45% quarter over quarter), and enterprise adoption of content automation solutions.
• Product innovations like Adobe Acrobat Studio, integrations with leading AI platforms, and partnerships to drive new user acquisition and workflow efficiencies.

Business professionals and consumers' subscription revenue was $1.78 billion, increasing 16% year-over-year as reported, or 15% in constant currency. Creative and marketing professional subscription revenue was $4.39 billion, increasing 12% year-over-year or 11% in constant currency. ARR from AI-first applications more than tripled year over year. Acrobat and Express MAU grew approximately 20% year-over-year. Acrobat AI Assistant ARR grew approximately 3x year-over-year. Gen Studio and AEP and Apps ending ARR each grew over 30% year over year.

For Q2 fiscal 2026, targeting total Adobe revenue of 6.43 to 6.48 billion, business professionals and consumers subscription revenue of 1.80 to $1.82 billion, creative and marketing professional subscription revenue of $4.41 to $4.44 billion, GAAP EPS of $4.35 to $4.40, and non-GAAP EPS of $5.80 to $5.85. Expect total Adobe ARR growth of 10.2% for FY26.

Traditional stock business saw a steeper decline than expected, playing out more quickly than planned.

Q: Jay Fleishar's question about RPO progression.

A: Dan's response on pleased with progression and no reason to expect different dynamic in RPO.

Q: Saket Kalia's question on board looking for in next CEO.

A: Shantanu's response on product company, growth agenda, and people values.

Q: Brad Zelnick's question on generative credit consumption in video and audio.

A: David's response on AI evolution, more people generating, higher modalities, and ramp in existing professionals adding packs.

Q: Mark Murphy's question on revenue acceleration.

A: Shantanu's response on product innovation, user adoption, enterprise pipeline, and stock business impact.

Q: Keith Weiss's question on foundation building initiatives.

A: Shantanu's response on creativity core, business professional and consumer growth, and early indicators like MAU.

Q: Alex Zukin's questions on AI MAU impact on ARR and CEO search timeline.

A: Shantanu's response on traffic patterns, phase shift, and CEO search taking a few months; David's addition on creativity evolution and traffic routing.

Q: Matt Swanson's question on partnerships and monetization.

A: Shantanu's response on enterprise customer experience orchestration, partnerships with ad platforms, and model support.

Q: Brent Tho's questions on monetization confidence and capital allocation.

A: Shantanu's response on confidence in monetization strategy; Dan's response on capital allocation framework and SEMrush acquisition.

Q: Michael Turin's question on margin vs growth.

A: Shantanu's response on spending for long-term value, tracking token usage, and continuing to invest in newer initiatives