20260911-招银国际-Inline_3QFY26_results_focus_on_user_acquisition_to_drive_long-term_growth_5页_1mb

Adobe (ADBE US) Summary

Core Content and Key Information

Adobe reported 3QFY26 results that were in line with expectations, with total revenue increasing by 13% YoY to US$6.76bn and non-GAAP net income rising by 8% YoY to US$2.42bn. Total Annual Recurring Revenue (ARR) grew by 11% YoY to US$27.5bn, driven by strong user and engagement growth. The company slightly raised its FY26 revenue forecast by US$50mn to US$26.576-26.626bn (+11.8%-12.0% YoY) and maintained its ARR growth guidance at +10.2% YoY.

Adobe continues to prioritize customer acquisition, with total Monthly Active Users (MAUs) growing by over 20% YoY to over 1bn. The AI-first ARR increased by over 150% YoY to US$650mn, indicating strong adoption of AI-driven products. The company has also announced that Anil Chakravarthy will become the new CEO effective Dec 1.

Main Points and Views

• User Acquisition: Adobe's focus on user acquisition through a freemium strategy has led to significant growth in MAUs, especially in the Creative & Marketing Professionals segment, which saw a 13% YoY revenue increase to US$4.65bn. The number of creative freemium MAUs increased by over 70% YoY to more than 100mn.
• AI Adoption: The company is experiencing strong AI product adoption, with AI-first ARR surpassing US$650mn in 3QFY26, up by over 150% YoY. Specific AI products like Acrobat AI Assistant saw MAUs doubling QoQ, and Firefly recorded 40% QoQ growth in ending ARR.
• Business Performance: Business Professionals & Consumers subscription revenue increased by 16% YoY to US$1.91bn, with double-digit ARR growth across all geographies. The SMB segment also showed strong performance in both inside sales and the reseller channel.
• Margin Pressure: Non-GAAP Operating Profit Margin (OPM) decreased by 2ppt YoY to 44%, mainly due to increased R&D investment and the acquisition of Semrush. The company currently trades at 10x FY26E non-GAAP P/E, which is 40% below the 2-year average of 17x, suggesting a safety margin.
• Valuation and Forecast: Adobe is valued at US$120.0bn (US$300.0 per share) based on a 12x FY26E non-GAAP P/E. The target price is US$300.00, with a 20.6% upside from the current price of US$248.83. The BUY rating is maintained due to positive AI momentum and attractive valuation.

Financial Highlights

Shareholding and Performance

• Shareholding Structure:

  • BlackRock: 9.4%
  • Vanguard: 7.6%

• Share Performance:

  • 1-month: -5.6%
  • 3-month: +13.7%
  • 6-month: -9.1%

Business Forecasts

Adobe's forecast revision shows minimal changes across FY26E to FY28E, with revenue expected to grow from US$26.6bn to US$32.1bn over the next three years. Non-GAAP operating profit is forecasted to increase from US$12.0bn to US$14.9bn by FY28E, while Non-GAAP net profit is expected to rise from US$9.8bn to US$12.2bn. Non-GAAP EPS is projected to increase from US$24.5 to US$32.0.

Valuation Comparison

Adobe's target valuation is based on a 12x FY26E non-GAAP P/E, significantly lower than the sector average of 25x. This suggests a discounted valuation and potential for value appreciation. The company's P/B ratio is also expected to rise from 6.9 to 10.5 over the forecast period.

Risks

• Intensifying competition from AI labs
• Tightening enterprise IT budgets
• AI investment affecting margins

Analyst Ratings

• BUY: Stock with potential return of over 15% over the next 12 months
• HOLD: Stock with potential return of +15% to -10%
• SELL: Stock with potential loss of over 10%
• NOT RATED: Stock not rated by CMBIGM
• OUTPERFORM: Industry expected to outperform the broad market benchmark
• MARKET-PERFORM: Industry expected to perform in-line with the broad market benchmark
• UNDERPERFORM: Industry expected to underperform the broad market benchmark

Conclusion

Adobe is showing solid performance in user acquisition and AI adoption, which are key drivers for its long-term growth. While short-term margin pressures are present due to increased R&D and acquisitions, the attractive valuation and positive AI momentum support the BUY rating. The company's financial forecasts suggest steady revenue growth and improving profitability, making it a compelling investment option in the current market environment.