AI Takeaway
Adobe delivered strong FY2025 results with revenue growing 10.5% to $23.8B, operating income surging 29.1% to $8.7B, and operating cash flow reaching $10.0B, while the company returned $11.3B to shareholders via buybacks.
Revenue
$23.77B
++10.53% YoY
EPS (Basic)
$16.73
++34.59% YoY
Gross Margin
89.3%
++0.23% YoY
Operating Income
$8.71B
++29.15% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Adobe grew total revenue 10.5% year-over-year to $23.77B in FY2025, up from $21.51B in FY2024, reflecting continued strength in its subscription-based Digital Media and Digital Experience segments. The high-margin software model is evident in a gross margin of 89.3%, essentially flat year-over-year.
Source: Source: 10-K Income Statement (XBRL Financial Data)
Operating income expanded 29.1% to $8.71B, with operating margin improving 530 basis points to 36.6% from 31.3% in the prior year, indicating Adobe successfully controlled cost growth relative to revenue — a hallmark of scaling SaaS businesses.
Source: Source: 10-K Income Statement (XBRL Financial Data)
Operating cash flow reached $10.03B in FY2025, up 24.5% from $8.06B, enabling Adobe to repurchase $11.28B in shares — an 18.7% increase over the prior year's $9.50B buyback program, significantly reducing the share count and boosting EPS.
Source: Source: 10-K Cash Flow Statement (XBRL Financial Data)
2 more insights available
Upgrade to unlockAdobe spent $11.28B on share repurchases in FY2025, partly financed by a 50.4% increase in long-term debt to $6.21B. The debt-to-equity ratio now stands at 1.54, and the current ratio has fallen below 1.0 (0.996), meaning current liabilities slightly exceed current assets, which could pressure liquidity if business conditions deteriorate.
Source: Source: 10-K Balance Sheet & Cash Flow Statement (XBRL Financial Data)
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $5.50 versus the $5.50 analyst consensus — a -0.0% miss for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $23.77B | $21.5B | +10.53% |
Cost of Revenue | $2.55B | $2.36B | +8.18% |
Gross Profit | $21.22B | $19.15B | +10.82% |
Operating Income | $8.71B | $6.74B | +29.15% |
Net Income | $7.13B | $5.56B | +28.24% |
EPS (Basic) | $16.73 | $12.43 | +34.59% |
EPS (Diluted) | $16.70 | $12.36 | +35.11% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $29.5B | $30.23B | -2.43% |
Current Assets | $10.16B | $11.23B | -9.52% |
Total Liabilities | $17.87B | $16.13B | +10.84% |
Current Liabilities | $10.2B | $10.52B | -3.05% |
Stockholders' Equity | $11.62B | $14.11B | -17.60% |
Cash & Equivalents | $5.43B | $7.61B | -28.66% |
Long-Term Debt | $6.21B | $4.13B | +50.40% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $10.03B | $8.06B | +24.52% |
Investing Cash Flow | $-1.19B | $149M | -896.64% |
Financing Cash Flow | $-11.06B | $-7.72B | -43.19% |
Share Buybacks | $11.28B | $9.5B | +18.75% |
D&A | $818M | $857M | -4.55% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 89.3% | 89.0% | +0.23% |
Operating Margin | 36.6% | 31.3% | +5.28% |
Net Margin | 30.0% | — | — |
ROE | 61.3% | — | — |
ROA | 24.2% | — | — |
Current Ratio | $0.996 | — | — |
Debt to Equity | $1.538 | — | — |
Adobe delivered solid Q2 FY2026 revenue growth of 12.7% YoY to $6.62B, but net income grew only 1.2% as operating margin compressed 2.1 percentage points, reflecting rising cost pressures even as the business generated strong operating cash flow of $5.12B year-to-date.
Adobe delivered strong Q1 FY2026 results with revenue of $6.40B (+12.0% YoY) and operating cash flow of $2.96B (+19.2% YoY), though net income growth lagged at +4.3% and the current ratio dipped below 1.0, signaling near-term liquidity tightness.
Other companies in Application Software
Adobe delivered strong FY2025 results with revenue growing 10.5% to $23.77B and net income rising 28.2% to $7.13B. Operating margin expanded significantly to 36.6% from 31.3%, and diluted EPS surged 35.1% to $16.70, partly boosted by $11.28B in share buybacks.
Adobe's earnings growth in FY2025 was driven by a combination of subscription revenue growth across Creative Cloud, Document Cloud, and Experience Cloud, along with strong operating leverage that grew operating income 29.1% to $8.71B. Additionally, the company's $11.28B share repurchase program meaningfully reduced the share count, amplifying EPS growth to 35.1%.
Key risks for Adobe include intensifying AI-native competition threatening its core creative software products, rising financial leverage from $6.21B in long-term debt used to fund buybacks, and a current ratio below 1.0 (0.996) indicating current liabilities slightly exceed current assets. Macroeconomic sensitivity of enterprise software spending also poses a risk to revenue growth.
Adobe returned $11.28B to shareholders through share repurchases in FY2025, an 18.7% increase over the $9.50B repurchased in FY2024. This was funded by strong operating cash flow of $10.03B as well as additional debt issuance, with long-term debt rising 50.4% to $6.21B.
Adobe's profitability metrics are strong, with a 30% net margin, 89.3% gross margin, and $10.03B in operating cash flow, but the balance sheet shows some increased leverage with long-term debt up 50.4% to $6.21B and cash declining 28.7% to $5.43B. The current ratio of 0.996 is slightly below 1.0, though this is manageable given Adobe's robust cash generation capabilities.