For more information on those risks, please review today's earnings release and Adobe's SEC filings. Our reported results include GAAP growth rates and non-GAAP growth rates, including constant currency rates. During this presentation, Adobe's executives will refer to revenue growth and constant currency rates unless otherwise stated. Non-GAAP reconciliations are available in our earnings release and on Adobe's investor relations website.

We achieved $6.62 billion in revenue in Q2, representing 11% year-over-year growth. GAAP earnings per share for the quarter was $4.25, representing 8% year-over-year growth, and non-GAAP earnings per share was $5.96, representing 18% year-over-year growth. We drove EPS growth through record top-line revenue and disciplined investments across the company. As it relates to creativity and productivity, there's an unprecedented demand across additional surfaces for the combination of content consumption and content creation.

Big picture, the immediate opportunity for Adobe is to accelerate new user acquisition and lifetime value through a freemium offering. We believe this traffic is better served through a customized, friction-free onboarding experience without immediate paywalls and will result in greater customer acquisition and deeper engagement over time. The new personalized journeys for creators drove approximately 50% increase in Firefly ARR quarter-over-quarter through Firefly apps and credit packs. While we focus on accelerating creator acquisition through the freemium Firefly funnel, we have made the decision to defer previously planned Creative Cloud second half line optimizations.

What went well
  • Adobe delivered record Q2 revenue of $6.62 billion, growing 11% year-over-year in constant currency and 13% as reported, with non-GAAP EPS of $5.96 up 18% year-over-year.
  • Total Adobe ending ARR reached $27.1 billion, growing 12.5% year-over-year including approximately $480 million from the newly closed Semrush acquisition.
  • Acrobat and Express monthly active users surpassed 850 million, growing roughly 20% year-over-year, while creative freemium MAU crossed 90 million, growing over 70% year-over-year.
  • AI-first ARR grew 3x year-over-year to more than $500 million, Firefly ending ARR approached $300 million with Firefly ARR up approximately 50% quarter-over-quarter, and Customer Experience Orchestration AI-first ARR grew 4x year-over-year.
  • Adobe raised its full-year fiscal 2026 revenue and non-GAAP EPS targets on the strength of first half performance and the inclusion of Semrush.
What went wrong
  • The strategic shift to aggressively acquire freemium customers through Adobe and Firefly lowered second half ARR growth expectations from individual subscribers, cutting the FY26 total ARR growth target to 10.2%.
  • Management deferred previously planned Creative Cloud second half line optimizations (price increases), which alongside the freemium push drove roughly a $500 million downward adjustment to organic ARR by analyst math.
  • GAAP results included a $70 million, or $0.17 per share, non-cash goodwill impairment charge related to the publishing and advertising reporting unit.
  • CFO Dan Durn announced his departure to pursue an opportunity outside the software industry, with Steve Day named Interim CFO amid an ongoing CEO search.

Guidance Changes

MetricPeriodCurrent guidance
Total Adobe revenueFY2026$26.5 billion to $26.6 billion (raised on strong first half performance and inclusion of Semrush)
Non-GAAP EPSFY2026$24.35 to $24.45 (raised on year-to-date strength and Semrush)
GAAP EPSFY2026$17.90 to $18.00 (reiterated, roughly in line)
Total Adobe ending ARR book of business growthFY202610.2% (reiterated but now reflects Semrush addition offsetting the deferral of Creative Cloud line optimizations and accelerated freemium growth)
Total Adobe revenueQ3 FY2026$6.67 billion to $6.72 billion (new quarterly guide)
Non-GAAP EPSQ3 FY2026$6.05 to $6.10 (new quarterly guide)

Performance Breakdown

MetricYoYNote
Total revenue +11% constant currency, +13% reported record $6.62 billion driven by subscription bookings to revenue conversion and disciplined investment
Non-GAAP EPS +18% $5.96 on record top-line revenue and disciplined investments
GAAP EPS +8% $4.25, dampened by a $70 million goodwill impairment charge
Business professionals and consumers subscription revenue +15% constant currency, +16% reported $1.85 billion on double-digit ARR growth across all geographies and Acrobat AI Assistant ARR up approximately 3x
Creative and marketing professionals subscription revenue +11% constant currency, +13% reported $4.54 billion driven by CC Pro, generative credit consumption, and enterprise strength
Total Adobe ending ARR +12.5% $27.1 billion including approximately $480 million from Semrush

Earnings Call Themes & Trends

TopicPrevious mentionCurrent periodTrend
Freemium acquisition strategybalanced approach weighing direct-to-paid ARR against freemium onboardingsingular focus to go all-in on friction-free freemium funnels for Firefly, Express, and Acrobat, accepting short-term ARR cost for long-term MAU and lifetime value—
Semrush acquisitionpending deal expected to close in first half FY26closed in April, added $480 million ARR, being integrated for a brand visibility solution to launch at Cannes Lions—
Creative Cloud line optimizationsplanned price increases for second halfdeferred, not cancelled, to keep marketing message clear while pursuing freemium—
Leadership transitionShantanu Narayen transitioning to Board Chair with CEO search underwayCEO search progressing to have a successor in place for FY2027 planning, plus CFO Dan Durn departing with Steve Day as Interim CFO—

Q&A Summary

How do you maintain continuity through both the CEO search and CFO transition, and what profile is the board seeking?
Narayen said the finance leadership bench is seasoned and top-notch so Adobe will not miss a beat, and he will continue to work closely with the team to drive strategic objectives.
Why defer Creative Cloud line optimizations now and how does that set up future growth?
Narayen said it is a phase shift not a cancellation, with about half of the ARR impact from the deferral and half from going full steam on freemium, given complete confidence the creative business is extremely stable.
Why accelerate the freemium MAU motion now when it turns into a second half headwind?
Narayen pointed to early success and gushing traffic (adobe.com up over 40% year-over-year), saying the products and third-party model support are ready and the payback plays out into 2027; the combined action is roughly a $500 million ARR adjustment.
How does Semrush fit the broader portfolio and what is the compounding benefit over time?
Chakravarthy said combining Semrush outside-in prompt and search data with Adobe inside-out content intelligence via AEM creates the most comprehensive brand visibility solution, a must-have for every CMO, unveiled at Cannes.
How do you think about partnerships versus competition with companies like Google building their own design tools?
Wadhwani said the Creative Agent accesses 50 creative tools and is available in Claude, ChatGPT, and soon Copilot and Gemini, monetized via credit consumption; Narayen added Adobe is a huge cloud customer of these partners and rivals are focused on code, leaving creativity to Adobe.
How do you get comfortable on long-term lifetime value from the freemium push?
Wadhwani said opening the top of funnel via intent-based search drives higher engagement, and freemium converts show much higher usage and lifetime value than direct-to-paid, with MAU up 70% and Firefly ARR up 50% quarter-over-quarter as early proof.
Why not be more severe in the pivot and invest more aggressively into a bigger moat?
Narayen said this is a real pivot, with scrutiny on expenses to fund spend on models, marketing, and product, and Adobe will not be short-term about capitalizing on the opportunity.
How does the next generation of freemium products compare to the original Acrobat freemium success?
Wadhwani said the same data-driven paywall infrastructure built for Acrobat Reader applies to Express, Firefly, and AI Assistant, with the new difference being intent starting in search rather than only in-product; Narayen added usage-first is the common thread.

More on Adobe Inc.

Reported 2026-06-11 · figures from the Adobe Inc. Q2 2026 earnings call.

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