Adobe Inc. (NASDAQ: ADBE) crammed a lot into Wednesday, December 10, 2025: record fourth‑quarter and full‑year results, fresh guidance for fiscal 2026, a headline‑grabbing integration with ChatGPT — and a choppy reaction in its share price after the bell. Here’s what happened to Adobe stock after hours, what’s driving the numbers, and what traders should focus on before the U.S. market opens on Thursday, December 11.
How Adobe Stock Traded After the Bell on December 10
Adobe entered its earnings release already in the spotlight. The broader market had rallied after the Federal Reserve cut its benchmark rate by 25 basis points to a range of 3.5%–3.75%, sending the Dow up about 1.1%, the S&P 500 up 0.7% and the Nasdaq up 0.3%. [1] Into the close, Oracle and Adobe were little changed as investors waited for results from both software names. [2]
For Adobe specifically:
- During regular trading on December 10, ADBE finished in the mid‑$340s, down roughly 0.3%–0.4% on the day. [3]
- Immediately after the earnings release, some outlets reported the stock trading modestly higher in extended hours — roughly 0.5%–2% above the close — as the market digested a top‑ and bottom‑line beat and an upbeat 2026 outlook. TechStock²
- As the evening wore on, the stock gave back those early gains. By around 6:30 p.m. ET, one detailed earnings‑slide review noted Adobe shares down about 0.7% from the close, with after‑hours quotes near $342. [4]
In other words, the first reaction was classic “mixed but cautious”: earnings and guidance were objectively solid, but for a stock that has already fallen about a quarter this year and nearly 40% in the last 12 months, sentiment is still fragile. [5]
The Numbers: Record Q4 and FY2025 Revenue Driven by AI
Despite the muted stock move, Adobe’s fiscal Q4 and full‑year 2025 numbers were strong almost across the board:
- Q4 2025 revenue:
- $6.19 billion, up 10% year over year, and ahead of analysts’ estimates around $6.11 billion. [6]
- Q4 non‑GAAP earnings per share (EPS):
- $5.50, beating expectations of roughly $5.40. [7]
- Full‑year 2025 revenue:
- A record $23.77 billion, up 11% from fiscal 2024. [8]
- Full‑year non‑GAAP EPS:
- $20.94, representing about 14% EPS growth and underscoring margin resilience. [9]
- Cash flow and buybacks:
- Adobe generated $10.03 billion in cash from operations for FY2025, including $3.16 billion in Q4 alone, and repurchased 30.8 million shares over the year, 7.2 million of them in the fourth quarter. [10]
One wrinkle: on a GAAP basis, diluted Q4 EPS was $4.45, which a QuiverQuant breakdown notes is below some EPS estimates that were framed around a higher number, highlighting the usual gap between GAAP and non‑GAAP metrics. [11] Most Wall Street commentary, however, is clearly keying off the non‑GAAP figures, where Adobe delivered a clean beat.
Segment Breakdown: Digital Media Still the Engine
Adobe’s results show broad‑based growth, but the Digital Media franchise — Creative Cloud and Document Cloud — remains the main profit driver:
- Digital Media (Creative & Document Cloud)
- Q4 revenue: $4.62 billion, up 11% year over year.
- Digital Media Annualized Recurring Revenue (ARR): $19.20 billion, up 11.5%. [12]
- Digital Experience (Experience Cloud & related)
- Q4 revenue: $1.52 billion, up 9% year over year.
- Subscription revenue in this segment rose 11% to $1.41 billion. [13]
Adobe also highlighted a new view of its business by customer groups rather than just product lines:
- Business Professionals & Consumers: subscription revenue of $1.72 billion in Q4, up 15% year over year, with mobile ARR growth above 30% and more than 750 million active users (up 20%). [14]
- Creative & Marketing Professionals: subscription revenue of $4.25 billion, up 11%, with Creative Cloud growth, higher use of generative credits and strong mobile acquisition. [15]
These data points all support the same story: despite investor concerns about competition and AI disruption, Adobe’s core franchises are still growing at high single‑ to low double‑digit rates.
AI at the Center: One‑Third of ARR Already AI‑Influenced
The headline theme of the quarter is AI — not just as a buzzword, but as a measurable revenue driver.
According to Adobe’s Q4 slide deck, AI‑influenced ARR now exceeds one‑third of the company’s overall business, reflecting the impact of products like Firefly generative AI, Acrobat AI Assistant, GenStudio and related offerings. [16]
Key AI‑related details from recent quarters and this report include:
- AI‑driven tools are embedded across Creative Cloud (Photoshop, Illustrator, Premiere Pro), Document Cloud (Acrobat, Acrobat AI Assistant) and Experience Cloud workflows. [17]
- Generative credit consumption in Creative Cloud increased roughly threefold quarter over quarter, a sign that users are actively engaging with Firefly features rather than ignoring them. [18]
- Earlier this year, Adobe disclosed that AI‑influenced ARR had crossed $5 billion, and that AI‑first products like Firefly‑powered offerings had already achieved more than $250 million in ARR — targets that were initially set for year‑end. [19]
In the Q4 press release and subsequent commentary, CEO Shantanu Narayen framed Adobe’s results as proof of the company’s growing role in the global AI ecosystem and rapid adoption of its AI‑driven tools, particularly across creative and marketing workflows. [20]
New Catalyst: Photoshop, Acrobat and Express Come to ChatGPT
Separate from earnings — but very relevant for future demand — Adobe also launched full integrations of Photoshop, Adobe Express and Acrobat inside ChatGPT on December 10. [21]
Key points of the ChatGPT deal:
- Photoshop, Acrobat and Adobe Express can now be invoked directly inside ChatGPT so users can edit images, design graphics, or manipulate PDFs through natural‑language prompts. [22]
- The tools roll out immediately across ChatGPT’s desktop, web and iOS interfaces; Adobe Express for ChatGPT is already available on Android, with Photoshop and Acrobat support on Android coming later. [23]
- Adobe says the integration reaches ChatGPT’s 800 million‑plus users, massively expanding the potential top‑of‑funnel audience for its apps. [24]
- Users must sign in with an Adobe account, which means free ChatGPT usage can still feed into Adobe’s subscription funnel over time. [25]
For investors watching the stock into Thursday’s open, this integration is important because it:
- Extends Adobe’s agentic AI strategy: tools aren’t just in standalone apps anymore, but embedded in conversational platforms where users already spend time. [26]
- Creates a conversion funnel from casual ChatGPT users to paid Creative Cloud and Document Cloud subscribers if Adobe executes well on upsell and branding. TechStock²+1
How quickly this translates into hard dollars is one of the key questions the market will be testing in the months ahead.
Guidance: Fiscal 2026 Outlook Tops Wall Street Expectations
If Q4 validated Adobe’s AI push, the fiscal 2026 outlook sketched out what comes next.
According to Adobe and Reuters:
- FY2026 revenue guidance:
- $25.90–$26.10 billion, roughly 8.8% growth at the midpoint versus FY2025 and slightly above the Street’s estimate of about $25.87 billion. [27]
- FY2026 non‑GAAP EPS guidance:
- $23.30–$23.50 per share, ahead of consensus near $23.34. [28]
- Q1 FY2026 outlook:
- Revenue of $6.25–$6.30 billion and non‑GAAP EPS of $5.85–$5.90. [29]
From fiscal 2026 onward, Adobe will also resegment its reporting to focus more explicitly on subscription revenue and ending ARR by customer group, a shift that should make it easier for investors to track recurring revenue momentum across its different audiences. [30]
Put simply, Adobe is guiding to high‑single‑digit revenue growth and double‑digit EPS growth, which is solid but not explosive. That mismatch between strong fundamentals and sky‑high expectations is part of why the stock’s reaction has been contained rather than euphoric.
Strategy Moves: Semrush Acquisition and the Marketing AI Stack
Another important piece of the puzzle is Adobe’s M&A strategy.
- Adobe recently agreed to acquire Semrush for about $1.9 billion in cash, a major player in SEO and what it calls “Generative Engine Optimization” (optimizing for AI assistants like ChatGPT and Gemini rather than just classic search). TechStock²+1
- The deal is expected to close in the first half of FY2026 and is projected to have minimal impact on non‑GAAP EPS in the first year. [31]
Combined with Firefly, Experience Cloud, GenStudio and the new ChatGPT integrations, Semrush should help Adobe own more of the entire funnel: from content creation, to distribution, to optimization and measurement across both traditional search and AI‑driven interfaces. TechStock²+1
Investors will look for more detail on synergies and integration plans as the acquisition moves toward closing.
What Analysts and Valuation Models Are Saying Tonight
There’s no shortage of fresh analysis coming out on December 10:
- A detailed slide‑deck breakdown from Investing.com emphasizes that Adobe’s Q4 beat on revenue and non‑GAAP EPS was accompanied by record cash flow and aggressive buybacks, but notes that the share price still slipped in both regular and after‑hours trading. [32]
- Parameter.io’s recap highlights 10% Q4 revenue growth, 11% full‑year revenue growth, total ARR of $25.20 billion (up 11.5%), and net income of $7.13 billion for FY2025 — again underscoring how profitable the model remains. [33]
- An AInvest note titled “Adobe Q4 FY2025: Growth Amidst AI Push – Sustainability Questioned” flags concerns about whether current growth rates and AI monetization trends are sustainable over the medium term, given mounting competition. [34]
On Wall Street:
- QuiverQuant counts 10 “Buy” ratings and 1 “Sell” among recent analyst reports, with a median price target of $427.50. [35]
- Recent targets include $450 from Stifel (Buy), $366 from Citigroup, $390 from Mizuho, $420 from Wells Fargo, and $430–$450 from RBC and Morgan Stanley. [36]
- A separate synthesis of analyst commentary notes that Barclays trimmed its target from $465 to $415 (still Overweight), Zacks rates the stock a “Hold” amid valuation and competition worries, and TD Cowen sees the shares as potentially range‑bound until the AI business model is clearer. TechStock²
From a valuation standpoint:
- Zacks data via Nasdaq put Adobe’s 2025 P/E ratio at roughly 20.2×, versus about 28.7× for its industry, suggesting the stock trades at a discount to peers despite double‑digit growth and high margins. [37]
- A recent Simply Wall St discounted‑cash‑flow model estimates fair value around $530.57 per share, implying the stock could be roughly 40% undervalued at current prices — though such models are highly sensitive to growth and discount‑rate assumptions. [38]
Taken together, the fresh research paints a consistent picture: fundamentals are strong, AI execution is impressive, and valuation looks undemanding on some metrics — but competitive risk and sentiment weigh heavily.
Context: A Tough 2025 for the Stock
Even before this earnings release, Adobe’s share price had fallen sharply:
- Multiple analyses put Adobe’s year‑to‑date decline around 25%–27% as of early December, with a drop of roughly 37% over the last 12 months, leaving the stock near its 52‑week lows. [39]
- Commentators from outlets including The Motley Fool and Nasdaq have repeatedly cited AI competition — from nimble design tools and collaborative platforms — and valuation reset as key drivers of the sell‑off. [40]
That’s why Wednesday’s reaction matters: investors are trying to decide whether Adobe has now done enough — via AI execution, guidance and distribution deals like ChatGPT — to flip the narrative from “legacy creative suite at risk” to “undervalued AI platform.”
What to Watch Before the Market Opens on December 11
Heading into Thursday’s open, here are the key issues short‑term traders and longer‑term investors are likely to focus on:
- Follow‑Through in Pre‑Market Trading
- Does Adobe continue to drift lower in pre‑market trading, confirming a “sell‑the‑news” reaction, or do buyers step in on the back of the beat, guidance and ChatGPT news?
- Watch volume and order‑book depth around the mid‑$340s: this zone has been an important battleground near recent lows. [41]
- How the Market Prices 2026 Guidance
- The guidance is slightly above consensus but points to slower growth than FY2025. If traders focus on the deceleration, the stock could stay capped; if they focus on the combination of growth, margins and lower‑than‑peer valuation, there’s room for repricing higher. [42]
- AI‑Influenced ARR and ChatGPT Adoption Metrics
- AI‑influenced ARR already accounts for more than one‑third of Adobe’s business, and the ChatGPT integration dramatically enlarges top‑of‑funnel reach. Early signals on usage, conversion and monetization will be crucial for the bull case. [43]
- Semrush and the Marketing Cloud Story
- The Semrush deal is about owning the AI‑driven marketing and search optimization stack. Investors will be looking for more clarity on cross‑sell opportunities into Experience Cloud and how quickly the acquisition can contribute to ARR and margins once it closes in H1 FY2026. TechStock²+2Investing.com+2
- Competitive Response in Generative Design and Collaboration
- With rivals rolling out their own AI‑native design tools, the Street will keep asking whether Adobe’s Firefly Foundry, agentic workflows and ChatGPT integrations are enough to keep creative professionals and enterprises locked into its ecosystem. TechStock²+2eWeek+2
- Macro Backdrop After the Fed Cut
- Wednesday’s rate cut helped push major indices toward record highs. If the risk‑on mood holds, it could provide a tailwind for quality software names like Adobe — but any shift in expectations about the Fed’s next moves may quickly change the risk appetite. [44]
Bottom Line
After the bell on December 10, Adobe delivered exactly what investors said they wanted: record Q4 and full‑year results, a clear AI revenue story, 2026 guidance above expectations, and a marquee ChatGPT partnership that could open the door to hundreds of millions of new users.
Yet the stock’s modest drift lower in after‑hours trading is a reminder that, after a bruising year, sentiment is still cautious and the bar for upside surprises remains high.
Into the December 11 open, the key question isn’t whether Adobe is growing — it clearly is — but whether Wall Street is finally ready to believe that its AI strategy, new distribution channels and marketing‑stack acquisitions can translate into sustained, profitable growth that justifies a higher multiple.
References
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