Adobe (ADBE.US) Q4 performance and 2026 fiscal year guidance both exceeded expectations, but market anxiety about AI disruption remains difficult to dispel.

Adobe (ADBE.US) has released an optimistic annual performance guidance, but investors reacted lukewarmly. They have been looking for clearer signs to prove that this software manufacturer can thrive in the era of artificial intelligence (AI). Adobe said on Wednesday that it expects revenue for the 2026 fiscal year ending November 2026 to reach $25.9 billion to $26.1 billion. Although the midpoint of this forecast range exceeds the average expectations of Wall Street analysts, it falls short of some analysts' expectations of over $26.4 billion. The company also expects adjusted earnings per share for the 2026 fiscal year to be in the range of $23.30 to $23.50, slightly higher than the average expectations of Wall Street analysts of $23.37. Meanwhile, the financial report released on Wednesday showed that in the fourth quarter of the 2025 fiscal year ending November 28, Adobe's revenue increased by 10% year-on-year to a record $6.19 billion, surpassing analysts' average expectations of $6.11 billion. Non-GAAP net profit was $2.29 billion, an 8% increase from $2.13 billion in the same period last year. Adjusted earnings per share were $5.50, surpassing analysts' average expectations of $5.39. Revenue for Adobe's Digital Media division, including flagship creative and document processing software, was $4.62 billion, up 11% year-on-year; the annual recurring revenue (ARR) for this division was $19.2 billion. Revenue for the Digital Experience division was $1.52 billion, up 9% year-on-year. Adobe's performance in the 2025 fiscal year exceeded market expectations, and CEO Shantanu Narayen said it reflects Adobe's increasingly important position in the "global AI ecosystem and the rapid adoption of our AI-driven tools." However, Adobe did not update some AI-related metrics it disclosed three months ago. In September of this year, the company stated that its AI-driven ARR had exceeded $5 billion, and sales of AI priority products had exceeded $250 million. Investors have been concerned that generative AI may impact Adobe's business. Adobe faces multidimensional challenges. On one hand, smaller companies like Canva and Figma are taking more market share; on the other hand, larger tech companies like Meta are integrating more AI functions. More worrisome is that AI-native tools like Midjourney are challenging Adobe's long-standing leadership in the creative software field. Despite AI functionality being used hundreds of billions of times in applications like Photoshop, many other popular toolssuch as Alphabet Inc. Class C's video generation model Veoare developed by other companies. Due to concerns that Adobe may lag behind in the AI era, its performance this year has been weaker compared to its tech peers. Jefferies Financial Group Inc. analyst Brent Thill wrote in a report before the financial report was released, "Concerns about AI disruption are troubling Adobe, as well as the entire application software sector." He stated that investors may be waiting for "significant and sustainable accelerated growth to dispel doubts about AI disruption and re-enter the market." To ensure that its features can be seen by a wider user base, Adobe announced on Wednesday that it will integrate Photoshop and Acrobat into OpenAI's ChatGPT and will offer some features for free to ChatSiasun Robot & Automation users.