Adobe beat earnings estimates, raised guidance, expanded AI tools, but faces legal and competitive challenges.

Adobe Inc. reported strong Q4 earnings on December 10, 2025, with $5.50 EPS and $6.19 billion in revenue, beating estimates and marking a 10.5% year-over-year revenue increase. The company raised its FY2026 guidance to $23.30–$23.50 EPS and Q1 2026 outlook to $5.85–$5.90 EPS. Adobe expanded its AI capabilities through an exclusive partnership with Runway to enhance Firefly with advanced video tools. Despite positive financials and institutional buying, including a 537.8% stake increase by Lifestyle Asset Management and a 16.9% rise by Voya Investment Management, analyst sentiment remains mixed, with some firms lowering targets or turning bearish. The stock, trading at $355.86, faces legal scrutiny over AI training practices and competition from free Acrobat alternatives.