Adobe (ADBE)
Information Technology · $99.2B market cap · SEC CIK 0000796343
fundamentals score out of 100
Next reports on Mar 10, 2027, with analysts expecting $6.92 in earnings per share.
The case for ADBE
- Generated $9.9B of free cash flow in FY2025, 41% of revenue.
- Earns 62% on shareholder equity.
- 28% of revenue drops through to net profit.
- Free cash flow of 9.9% of its market value a year: a lot of cash for the price.
- Revenue growing 12.0% year over year.
- Reasonably priced at 13.6× earnings.
The case against
- Down 31.8% over the past year.
- Current liabilities exceed current assets (ratio 0.75).
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Information Technology companies (momentum is judged against fixed thresholds only), and the five are blended by weight. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings, sales, assets and cash | 75 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 56 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 89 |
| Momentumhow the price has behaved lately | 43 |
| Stabilityhow violently it moves, what it owes and what it pays you | 66 |
- Each factor except momentum is half fixed thresholds, half rank among the 73 Information Technology companies.
Key numbers
| Price / earnings | 13.6× |
|---|---|
| Price / book | 9.10× |
| Price / sales | 3.8× |
| Revenue growth (YoY) | +12.0% |
| EPS growth (YoY) | +11.7% |
| Gross margin | 89% |
| Operating margin | 36% |
| Net margin | 28% |
| Return on equity | 62% |
| Debt / equity | 0.58× |
| Current ratio | 0.75 |
| Dividend yield | none |
| Beta | 1.39 |
| 52-week range | $190.12 – $370.31 |
| Position in that range | 27% of the way up |
| 3-month return | +27.9% |
| 1-year return | -31.8% |
Five years of financials, as filed
Pulled from Adobe's XBRL filings on SEC EDGAR. Italic rows are derived from the rows above.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue | $23.8B | $21.5B | $19.4B | $17.6B | $15.8B |
| Gross profit | $21.2B | $19.1B | $17.1B | $15.4B | $13.9B |
| Operating income | $8.7B | $6.7B | $6.7B | $6.1B | $5.8B |
| Net income | $7.1B | $5.6B | $5.4B | $4.8B | $4.8B |
| Operating cash flow | $10.0B | $8.1B | $7.3B | $7.8B | $7.2B |
| Capital expenditure | $179M | $183M | $360M | $442M | $348M |
| Total assets | $29.5B | $30.2B | $29.8B | $27.2B | $27.2B |
| Total liabilities | $17.9B | $16.1B | $13.3B | $13.1B | $12.4B |
| Shareholder equity | $11.6B | $14.1B | $16.5B | $14.1B | $14.8B |
| Cash | $5.4B | $7.6B | $7.1B | $4.2B | $3.8B |
| Long-term debt | $6.2B | $4.1B | $3.6B | $3.6B | $4.1B |
| Free cash flow | $9.9B | $7.9B | $6.9B | $7.4B | $6.9B |
| Gross margin | 89.3% | 89.0% | 87.9% | 87.7% | 88.2% |
| Operating margin | 36.6% | 31.3% | 34.3% | 34.6% | 36.8% |
| Net margin | 30.0% | 25.9% | 28.0% | 27.0% | 30.5% |
| Diluted shares | 427M | 450M | 459M | 471M | 481M |
Share count is down 11.2% over 4 years. Buybacks have been shrinking the pie.
What Adobe says it does
OVERVIEW Adobe’s mission is to empower everyone to create. We build innovative platforms and tools that unleash creativity, productivity and personalized customer experiences. For over four decades, our innovations have transformed how people everywhere engage across all types of media. Adobe’s solutions are the foundation of digital experiences, starting with the first creative spark, to the creation and development of all content and media, to the personalized delivery across every channel. Our focus revolves around serving our customer audiences: business professionals, consumers, creators, creative professionals and marketing professionals. The massive opportunity and evolving role of creativity across roles and industries have driven Adobe’s growth over the past four decades and are expected to continue to drive our growth going forward as we evolve our solutions and routes to market to anticipate the growing needs of our…
Risk factors ADBE lists in its 10-K
- Risks Related to Our Ability to Grow Our Business
- We may be unsuccessful at innovating in response to rapid technological or industry changes to meet customer needs, which could cause our business and financial results to suffer materially
- We participate in rapidly evolving and intensely competitive markets, and, if we do not compete effectively, our business and financial results could materially suffer
- For additional information regarding our competition and the risks arising out of the competitive environment in which we operate, see the section titled "Competition" contained in Part I, Item 1 of this report
- Issues relating to the development and use of AI in our solutions may result in reputational harm, liability and adverse business and financial results
- If our reputation or our brands are damaged, our business and financial results may be adversely affected
- We may not realize the anticipated benefits of acquisitions, investments or other strategic transactions, and they may disrupt our business and adversely affect our business and financial results
- Risks Related to the Operation of Our Business
- If we are unable to recruit and retain key personnel, our business may be harmed, and our hybrid work model may present challenges, which could adversely impact our business
- Security incidents, improper access to or disclosure of our customers’ data or other cybersecurity incidents may harm our reputation and materially and adversely affect our business
- We face various risks associated with operating as a multinational corporation, and global adverse economic and geopolitical conditions may harm our business and financial condition
- Some of our enterprise solutions have extended and complex sales cycles, which may increase our costs and make our sales cycles unpredictable
- Risks Related to Laws and Regulations
- We are subject to risks associated with compliance with laws and regulations globally, which may harm our business