Will Adobe’s AI-Driven, Record-Setting Revenue Ease Wall Street’s Worry?

Adobe has had a busy start to the month. Last week, its Board of Directors selected Adobe’s next President and CEO, and this week, the company posted record-setting Q3 financial results.

Starting with the CEO news, Anil Chakravarthy will become Adobe’s next president and chief executive officer beginning on December 1, 2026. The outgoing longtime CEO, Shantanu Narayen, will move to an executive chair position and work closely with Chakravarthy to “ensure a smooth transition and support Adobe’s ongoing transformation.”

“Adobe’s opportunity ahead is limitless with our track record in creating new market categories and world-class products. Anil is an experienced transformational leader who leads with values, integrity and a deep knowledge of our business. He has a proven record of building and delivering category-defining products that serve our broad range of customers,” Narayen said last week.

“I could not be more confident that Anil is the right person to lead Adobe’s growth in an AI-driven era and look forward to working closely with him in my new role as executive chair,” Narayen continued.

Anil Chakravarthy | Adobe

Speaking of AI, Chakravarthy mentioned it, too.

“I am deeply honored to have been chosen to lead Adobe during this pivotal moment. I’m energized by the opportunity to fuel growth and drive Adobe’s leadership in the next era of agentic software for creativity, productivity and customer experience. Adobe has a history of building the future — not just through our technology, but through our people and our commitment to customers. Thanks to Shantanu’s exceptional leadership in transforming Adobe’s business model over the decades, we are well positioned to achieve Adobe’s next chapter of growth. I want to thank the Board for the confidence they’ve placed in me. I look forward to working closely with our employees, Shantanu and the Board of Directors to continue serving our customers and transforming Adobe in the era of AI,” Chakravarthy said.

In Adobe’s Q3 financial results, AI was the highlight.

The company posted record revenue of $6.76 billion in FY2026 Q3, up 13% year over year. The company had record cash flows of $2.52 billion in Q3.

Narayen says AI is a driving force behind the record revenue.

“Adobe delivered record Q3 results, reflecting the strength of our AI innovation, expanding customer reach and leadership across creativity, productivity and customer experience. Reaching a landmark of more than one billion monthly active users is a defining moment for Adobe, and I have confidence that Anil will build on this momentum to drive Adobe’s next chapter of growth and innovation in the AI era.”

Interim CFO Steve Day, also a senior vice president at Adobe, cites the company’s “freemium strategy” and agentic experiences as significant money-makers.

“We are expanding our user base through a freemium strategy and deepening engagement with agentic experiences to deliver long-term durable growth,” Day says.

While record revenue is never a bad thing for a company, Adobe’s strong earnings didn’t boost its stock price.

So far this year, Adobe’s stock price is down more than 25%, or over $84 per share. The company’s earnings report yesterday hasn’t helped yet, and the stock was down nearly 2% during extended trading, per Reuters.

“Adobe’s beat on revenue expectations could ease some investor concerns that the company has lost its footing,” Emarketer analyst Grace Harmon told Reuters. However, Harmon added that serious questions remain about Adobe’s competitive position in the AI age.

Nearly 71% of Adobe’s total subscription revenue is from creative and marketing professionals, and that’s an extremely tumultuous market segment right now. Adobe faces stiff competition from companies like Canva, and many industry analysts remain neutral or bearish on Adobe’s prospects.

Image creditsAdobe. Header image created using an asset licensed via Depositphotos.com.