ADBE
Adobe Inc.
Technology · Software - Application · United States · Stock
Score Breakdown
Scored for Aggressive Growth profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Adobe scores well on growth and profitability—revenue up 10.5%, net income up 28.2%, and a perfect profitability score anchored by a 36.6% operating margin—which together form a strong fundamental foundation [growth.revenue.yoy, growth.net_income.yoy, profitability.operating_margin_pct].
- The composite score is moderated by a zero dividend score, as Adobe is a genuine non-payer, and a mixed momentum picture where the most recent quarter showed sequential declines in both net and operating income [dividend.none, momentum.net_income_quarterly, momentum.operating_income_quarterly].
- The theme score contributed nothing despite the Enterprise AI Software assignment, limiting the upside to the total model score [theme.assigned].
Why Not Higher
- The absence of any dividend income and the zero theme score together remove up to 40 potential points from the model, capping the composite score despite near-perfect marks in profitability and strong growth metrics [dividend.none, theme.assigned].
- The sequential pullback in net income and operating income in 2026Q2 tempered the momentum score, preventing a higher overall rating even as quarterly revenue continued to rise [momentum.net_income_quarterly, momentum.operating_income_quarterly].
Data Confidence
8 / 10
High — most data fields present
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $21,505,000,000 to FY2025's $23,769,000,000, a gain of +10.5%. Net income rose +28.2% over the same period, and diluted EPS expanded +35.1% from FY2024 to FY2025.
The model rewarded the combination of double-digit top-line growth and accelerating bottom-line expansion, with EPS growth outpacing revenue growth by a wide margin, reflecting both operating leverage and share count dynamics.
In FY2025, Adobe posted an operating margin of 36.6%, a net margin of 30.0%, and a return on assets of 24.2%.
The model awarded a perfect score because all three profitability metrics reflect exceptional capital efficiency and pricing power, with nearly a third of every revenue dollar converting to net income and nearly a quarter of total assets generating profit.
In FY2025, Adobe carried a debt-to-equity ratio of 0.53 against total assets of $29,496,000,000.
The model recognized a conservative leverage profile, as a debt-to-equity ratio below 1.0 indicates that equity financing substantially exceeds debt obligations; the large asset base further supports balance-sheet stability.
Quarterly revenue rose consecutively from $5,988,000,000 in 2025Q3 to $6,618,000,000 in 2026Q2, showing uninterrupted top-line acceleration. However, net income dipped from $1,889,000,000 in 2026Q1 to $1,712,000,000 in 2026Q2, and operating income similarly pulled back from $2,418,000,000 in 2026Q1 to $2,238,000,000 in 2026Q2 after three quarters of gains.
The model captured a mixed momentum picture: sustained revenue growth was partially offset by a notable sequential decline in both net income and operating income in the most recent quarter, tempering the overall score.
Adobe does not currently pay a dividend and has no mapped dividend history, making it a genuine non-payer rather than a case of missing data.
The model assigns a zero for this factor because dividend income is entirely absent, which is consistent with Adobe's growth-oriented capital allocation strategy; investors receive no current yield from this security.
Adobe is assigned to the Enterprise AI Software macro theme.
Although Adobe carries a relevant and currently prominent macro theme assignment, this assignment did not translate into a positive score under the model's current methodology, which may reflect how theme scoring weights or timing criteria are applied independently of the theme label itself.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Adobe Inc. delivered strong FY2025 results, with revenue growing 10.5% year-over-year to $23,769,000,000 and net income surging 28.2%, while diluted EPS expanded 35.1%, reflecting meaningful operating leverage [growth.revenue.yoy, growth.net_income.yoy, growth.eps_diluted.yoy]. Profitability metrics are exceptional, with a 36.6% operating margin, 30.0% net margin, and 24.2% return on assets in FY2025 [profitability.operating_margin_pct, profitability.net_margin_pct, profitability.roa_pct]. The balance sheet remains conservative with a debt-to-equity ratio of 0.53 against $29,496,000,000 in total assets [financial_health.debt_to_equity, financial_health.total_assets]. However, the model's composite score of 62.1/100 reflects headwinds from zero dividend income and a recent sequential pullback in net and operating income in the most recent quarter [dividend.none, momentum.net_income_quarterly, momentum.operating_income_quarterly].
Plain English
Adobe is a highly profitable software company that is growing revenues and earnings quickly, but it pays no dividends and its most recent quarterly profits dipped, which keeps its overall research score in the moderate range [growth.revenue.yoy, growth.net_income.yoy, dividend.none, momentum.net_income_quarterly].
Bull Case vs. Bear Case
Bull Case
- Revenue has grown uninterrupted for four consecutive quarters, rising from $5,988,000,000 in 2025Q3 to $6,618,000,000 in 2026Q2, demonstrating durable top-line momentum [momentum.revenue_quarterly].
- Adobe's profitability is best-in-class: a 36.6% operating margin and 30.0% net margin mean nearly a third of every revenue dollar converts to net income, reflecting strong pricing power and capital efficiency [profitability.operating_margin_pct, profitability.net_margin_pct].
- EPS expanded 35.1% in FY2025, significantly outpacing revenue growth of 10.5%, signaling that operating leverage and share count dynamics are amplifying returns to shareholders [growth.eps_diluted.yoy, growth.revenue.yoy].
Bear Case
- Both net income and operating income declined sequentially in 2026Q2—net income fell from $1,889,000,000 in 2026Q1 to $1,712,000,000, and operating income dropped from $2,418,000,000 to $2,238,000,000—introducing uncertainty about near-term margin sustainability [momentum.net_income_quarterly, momentum.operating_income_quarterly].
- Adobe pays no dividend and has no mapped dividend history, meaning investors receive zero current income yield from holding the stock [dividend.none].
- The Enterprise AI Software theme assignment did not translate into a positive theme score under the model's methodology, suggesting the thematic tailwind may not yet be reflected in measurable scoring criteria [theme.assigned].
What Could Change the Picture
Bullish Triggers
- A sustained recovery in sequential net income and operating income in future quarters would signal that the 2026Q2 dip was transitory and that margin expansion is back on track [momentum.net_income_quarterly, momentum.operating_income_quarterly].
- If Adobe's Enterprise AI Software positioning begins to drive measurable acceleration in revenue growth beyond the current 10.5% annual rate, it would strengthen the growth and theme factors simultaneously [growth.revenue.yoy, theme.assigned].
Bearish Triggers
- A continuation of the sequential decline in operating and net income beyond 2026Q2 would suggest structural margin pressure rather than a one-quarter anomaly [momentum.net_income_quarterly, momentum.operating_income_quarterly].
- Any deterioration in the debt-to-equity ratio above 1.0 or significant erosion of the $29,496,000,000 asset base would undermine the currently conservative financial health profile [financial_health.debt_to_equity, financial_health.total_assets].
Risk Profile
Medium RiskAdobe's balance sheet is conservatively positioned with a debt-to-equity ratio of 0.53 and $29,496,000,000 in total assets, limiting financial distress risk [financial_health.debt_to_equity, financial_health.total_assets]. However, the sequential decline in net income and operating income in 2026Q2 introduces near-term execution risk and warrants monitoring of whether margin pressure is temporary or persistent [momentum.net_income_quarterly, momentum.operating_income_quarterly].
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.