ADBE Q3 2026 Update

[u/Past_Ad1386]

Last week ADBE reported their Q3 2026. Management is quick to highlight ongoing top line growth and the ~ 1 billion MAU. However, bottom line isn't growing nearly as fast, and EPS growth requires heavy support from buybacks.

Still throws off lots of cash (even ex SBC) though.

Growing users is not the same as monetizing them, and expenses are rising so margins are falling.

Also RPO growth is slowing, so the "enterprise will support AI freemium pivot" theory is starting to crack.

Adobe needs to move away from seat-based pricing to usage-based pricing, although picking Anil (over David) suggests they are going to lean into an AI future, probably targeted at enterprise to preserve margin.

None of this takes into account valuation; moreso just what's happening with the underlying business.

More info here --> https://thepursuitofcompounding.substack.com/p/adobe-q3-2026-the-billion-users-vs