This article first appeared on GuruFocus.
Adobe (ADBE) shares fell about 2% despite the software maker lifting its full-year fiscal 2026 earnings outlook and projecting fourth-quarter revenue of $6.8 billion to $6.85 billion.
The company reported third-quarter revenue of $6.76 billion, with GAAP earnings per share of $4.62 and non-GAAP EPS of $6.13. Adobe also ended the period with $27.5 billion of annual recurring revenue, while operating cash flow reached $2.52 billion.
Warning! GuruFocus has detected 1 Warning Sign with SPCX.
Is ADBE fairly valued? Test your thesis with our free DCF calculator.
For the final quarter, management expects GAAP EPS of $4.65 to $4.70 and adjusted EPS of $6.30 to $6.35. The company now sees fiscal 2026 revenue of $26.576 billion to $26.626 billion, with GAAP EPS targeted at $18.12 to $18.17.
Adobe said artificial intelligence remains a key growth area, with AI-first ending annual recurring revenue exceeding $650 million and increasing more than 150% from a year earlier. The company also agreed to acquire Topaz Labs, subject to regulatory clearance.
Adobe said Anil Chakravarthy will become chief executive officer and join the board effective Dec. 1, while current CEO Shantanu Narayen will become executive chairman.