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Adobe's Strong Quarter Overshadowed by CFO Exit, Growth Uncertainty, RBC Says

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Adobe's Strong Quarter Overshadowed by CFO Exit, Growth Uncertainty, RBC Says

Adobe's (ADBE) solid quarterly results were overshadowed by the departure of its finance chief and lingering questions about the software marker's growth trajectory, RBC Capital Markets said in a report.

Chief Financial Officer Dan Durn resigned to take the same role at Marvell Technology (MRVL), with Steve Day, CFO of Adobe's customer experience orchestration unit, stepping in as interim finance chief.

On Thursday, Adobe posted fiscal second-quarter results that topped expectations. Investors instead focused on the leadership change and the company's decision to keep its full-year growth outlook for annualized recurring revenue unchanged even after adding contribution from its Semrush acquisition, RBC said. Offsetting that contribution are headwinds from Adobe's freemium strategy and deferred Creative Cloud line optimizations, the report said.

Adobe shares dropped 6.6% in Friday trading. They have slumped 42% this year.

"Adobe delivered a solid result from a headline perspective, but the exit of CFO Dan Durn and moving parts around organic ARR guidance created more uncertainty for a stock trying to firm up its foundation," RBC said.

Management highlighted that second-half seasonality will skew more heavily toward the fourth quarter than in prior years, the report said.

Adobe raised its fiscal 2026 adjusted EPS outlook to $24.35 to $24.45 from $23.30 to $23.50 and lifted its revenue forecast to $26.5 billion to $26.6 billion from $25.9 billion to $26.1 billion.

The FactSet consensus is for EPS of $24.24 on revenue of $26.45 billion. RBC expects EPS of $24.40 on revenue of $26.55 billion.

RBC cut its price target on Adobe stock to $285 from $350 and maintained its outperform rating.

Price: $204.30, Change: $-14.50, Percent Change: -6.63%

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