Adobe (ADBE) is set to post first quarter results on Thursday, after market close.
Wall Street expects the Photoshop maker to post EPS of $5.87, implying a rise of 15.6%, while revenue is set to rise 10% to $6.28 billion during the quarter.
Along with strong demand for Adobe’s usual design and Photoshop tools, the company’s push into AI has helped it to attract more customers. The company, during its fourth quarter results, said its total new AI-influenced ARR now exceeds 1/3 of its overall book of business.
Last year, Adobe acquired software company Semrush in an all-cash deal worth $1.9B to delve deeper into the ad market using the company’s generative AI expertise.
Adobe, in December, forecast fiscal 2026 revenue and profit above Wall Street expectations. Over the last two years, Adobe has beaten both revenue and EPS estimates 100% of the time.
Seeking Alpha analysts and Wall Street are bullish and rated the stock a Buy. In contrast, Seeking Alpha’s Quant rating consider it a Hold.
Seeking Alpha analyst Luca Socci said during its current quarter Adobe will need to address “AI-disruption fears” and that investors will need to be reassured that total ARR keeps growing above 10%.
“To avoid a deep post-1Q selloff, ADBE must demonstrate competitive agentic AI integration and raise both revenue and EPS guidance in the upcoming earnings,” said Seeking Alpha analyst Johnny Zhang, adding that “as long as its FY2026 outlook doesn’t fall below the current market consensus, ADBE is a strong buy.”
Meanwhile, Citi analysts cut PT on the stock to $315 from $387, saying it expects Q1 metrics to slightly exceed guidance and see minimal upside revisions to the FY26 outlook.
“We remain Neutral-rated on ADBE into FQ1 earnings where we expect a continued focus on leveraging the freemium funnel/expanding new users to increase monetization as we look for signs of ramping Firefly adoption/monetization,” analyst Tyler Radke said.
Over the last three months, EPS estimates have seen 25 upward revisions, compared to the one downward revisions. Revenue estimates have seen 19 upward revisions versus three downward moves.
The stock has lost over 20% so far this year, compared to the 0.9% fall in the broader S&P 500 Index.