Adobe ($ADBE) Q3 2026 Earnings: Is this still "AI roadkill" or one of the cheapest quality names out there?

Adobe just posted Q3 2026 earnings, beating on both revenue and EPS. The stock popped, then gave it all back in the days after — shares are still down 64% from the ATH and -26% YTD. Not exactly a quarter that's going to win Adobe any awards with investors. Time to figure out whether the "AI is killing Adobe" story actually holds up, or whether this is a broken stock, not a broken company.

The headline numbers look fine. Revenue grew double digits — though Semrush is doing a lot of the heavy lifting there, not organic growth. EPS rose 10.5%, mostly thanks to buybacks: Adobe has cut shares outstanding by 6.7% over the last year and 12% since Q3/24. That's the big reason the stock hasn't fallen even further.

Here's the part I actually care about: strip out Semrush, and organic ARR growth was just 9.3%. RPO grew only 8% YoY — the first single-digit RPO print since early fiscal 2023. Management is calling it a timing effect (RPO always jumps in Q4), and history is on their side here. But if Q4 doesn't catch up, the AI disruption thesis stops being a theory and starts being a fact.

On the bull side: AI-first ARR crossed $650M, growing 150%+ YoY, and Firefly ARR grew 40% quarter-over-quarter (quarter, not year). Adobe also crossed 1 billion monthly active users, mostly Acrobat-driven. The freemium machine is clearly working on the top of the funnel — the question is whether it converts fast enough.

Adobe also named a new CEO, Anil Chakravarthy, passing over the presumed favorite David Wadhwani. Some investors sold on the news alone. If your whole thesis hinges on which internal candidate got the corner office, your thesis wasn't that strong to begin with.

Valuation-wise, Adobe is trading at an EV/net income of \~13 and EV/(FCF-SBC) of \~11.2 — near the cheapest it's been in a decade. For a company still growing double digits and throwing off this much cash, that's cheap. Period. Q4 will tell us whether that's a gift or a value trap.

Full breakdown — earnings call details, guidance, and where I land on the stock from here — is in my write-up:

[https://41investments.substack.com/p/adobe-adbe-q3-2026-earnings-cheapest](https://41investments.substack.com/p/adobe-adbe-q3-2026-earnings-cheapest)