Adobe Inc

Equity Research 14 September 2026 | 1:21AM EDT

Adobe Inc. (ADBE) 3QFY: Top-of-funnel momentum builds; path to monetization still in question

ADBE 12m Price Target: $200.00 Price: $252.23 Downside: 20.7% SELL Gabriela Borges, CFA ADBE was +1% on 9/11 after reporting 3QFY results. Revenue was | Goldman Sachs & Co. LLC 1% above the Street (in line in CC), total ARR and EBIT margin was in Selina Zhang line, and FCF margin was ~300bps above (FactSet). Recall that | Goldman Sachs & Co. LLC Adobe entered 2H26 with a deliberate shift toward expanding its freemium funnel at the expense of near-term monetization, Callie Valenti | Goldman Sachs & Co. LLC deferring pricing actions and prioritizing user acquisition and engagement. We are encouraged by the early top-of-funnel and engagement signals associated with this strategic shift, with total Key Data _____________________________________ Market cap: $95.2bn MAUs surpassing 1B (+20% yoy), creative freemium MAUs exceeding Enterprise value: $96.0bn 3m ADTV: $1.4bn 100M (+70% yoy), Firefly ARR growing 40% qoq, and AI-first ARR United States surpassing $650mn (+150% yoy). That said, the key question Americas Software M&A Rank: 3 remains whether this engagement ultimately translates into GS Forecast __________________________________ sustainable monetization and durable ARR growth, particularly as 11/25 11/26E 11/27E 11/28E

Adobe continues to optimize conversion across its expanding Revenue ($ mn) New Revenue ($ mn) Old 23,769.0 23,769.0 26,601.0 26,550.4 29,017.7 28,793.0 31,489.5 31,058.8 freemium base. We look for greater clarity into FY27 around EBITDA ($ mn) 11,498.0 12,558.7 13,255.4 14,198.8 EBIT ($ mn) 10,986.0 11,961.2 12,581.5 13,467.5 conversion rates, monetization, and the balance between user EPS ($) New acquisition and revenue capture. Separately, the RPO deceleration EPS ($) Old P/E (X) appears at least partly related to the freemium strategy, as newer Dividend yield (%) -- -- -- -- creator cohorts increasingly adopt month-to-month contracts and Net debt/EBITDA (X) 0.1 0.1 (0.2) (0.5)

more flexible offerings that generate less RPO than traditional 8/26 11/26E 2/27E 5/27E annual commitments. Finally, the transition to Anil Chakravarthy as EPS ($)

CEO alongside the departure of David Wadhwani introduces an GS Factor Profile ______________________________ Growth additional execution variable - and opportunity to lean into innovation - as Adobe navigates the next phase of its AI, freemium, Financial Returns

and monetization strategy. Multiple

Percentile 20th 40th 60th 80th 100th

ADBE relative to Americas Coverage ADBE relative to Americas Software

Source: Company data, Goldman Sachs Research estimates. See disclosures for details.

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Goldman Sachs Adobe Inc. (ADBE)

Adobe Inc. (ADBE) Balance Sheet ($ mn) _______________________________________ SELL Rating since Jan 11, 2026 11/25 11/26E 11/27E 11/28E Cash & cash equivalents 5,431.0 5,611.3 7,579.2 10,936.7 Accounts receivable 2,344.0 2,468.2 2,604.4 2,822.0 Inventory -- -- -- -- Ratios & Valuation __________________________________________ Other current assets 1,224.0 1,348.7 1,616.1 1,751.2 11/25 11/26E 11/27E 11/28E Total current assets 8,999.0 9,428.2 11,799.8 15,509.9 P/E (X) Net PP&E 2,185.0 2,058.9 1,646.1 1,198.2 EV/EBITDA (X) Net intangibles 13,352.0 14,932.0 14,813.0 14,740.0 EV/sales (X) 7.0 3.8 3.1 2.5 Total investments 1,164.0 1,280.0 1,280.0 1,280.0 FCF yield (%) Other long-term assets 3,796.0 3,616.8 4,084.1 5,069.2 EV/DACF (X) Total assets 29,496.0 31,315.8 33,623.0 37,797.3 CROCI (%) ROE (%) Accounts payable Net debt/EBITDA (X) 0.1 0.1 (0.2) (0.5) Short-term debt 0.0 1,597.0 1,047.0 998.0 Net…