Firefly and generative AI
Adobe's AI-first products grew more than 150% y/y in Q3 FY2026, and total ARR reached $27.50B.
The numbers
What it is
Adobe's generative AI models and AI features across Creative Cloud, Acrobat and Express. They are sold as credit packs and as part of subscriptions, and Adobe reports AI-first ARR as a separate line from total ARR.
Why it matters to the stock. Adobe has to show that generative AI adds revenue and does not just compete with its own subscriptions. AI-first ARR growth is the number Adobe uses to answer that, and the company does not report it in dollars.
News
Wells Fargo double-downgrades Adobe to Underweight with a $225 target
Wells Fargo analyst Michael Turrin moved Adobe from Overweight to Underweight and cut the price target to $225 from $270.
Adobe Q3 FY2026: revenue up 13% to $6.76B and FY2026 targets raised, but Q4 revenue guide midpoint lands below consensus
Adobe reported record fiscal third-quarter revenue of $6.76 billion, up 13% year over year, with non-GAAP EPS of $6.13.
Adobe expands its creative AI agent across Firefly and Creative Cloud apps
Adobe expanded its creative agent across Firefly and Creative Cloud, adding Firefly skills such as brand kit creation, short product videos, automatic first cuts and storyboard-to-video generation.
Adobe introduces Firefly AI Assistant and adds Kling 3.0 video models
Adobe introduced the Firefly AI Assistant, a conversational agent that runs multi-step workflows across Photoshop, Premiere, Lightroom, Express and Illustrator.
Firefly Image Model 5 becomes generally available; custom models enter public beta
Adobe made Firefly Image Model 5 generally available and opened a public beta for custom models that users train on their own images.
Adobe and NVIDIA plan next-generation Firefly models on NVIDIA computing
Adobe and NVIDIA said Adobe will build its next generation of Firefly foundation models on NVIDIA computing, including CUDA-X and NeMo.
Adobe posts record Q1 FY2026 revenue of $6.40B and holds full-year targets
Adobe reported fiscal Q1 2026 revenue of $6.40 billion, up 12% year over year (11% in constant currency), with GAAP diluted EPS of $4.60 and non-GAAP EPS of $6.06.