ADBE
Adobe Inc.
Recurring SaaS
★ Quality 82/100Price today
$266.51
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See what it is worthcharlieapp.co
What this business is made of
The business
Adobe rents out the tools used to design almost everything you see.
Adobe sells creative software by subscription: Photoshop, Illustrator and Premiere in Creative Cloud, plus Acrobat and the PDF in Document Cloud, and Experience Cloud for marketing. It charges recurring monthly or annual fees; in FY2025 it billed $23.8B with an 89% gross margin. Almost all of it is revenue that repeats year after year.
The PDF is a global standard and Photoshop became a verb — people learn Adobe in college and never switch. The cost of migrating entire workflows is high and the ecosystem is integrated end to end. The moat is real, but generative AI threatens to open doors that used to be shut.
Revenue history
From $17.6B to $26.4B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $23.8B · FY2025
Of every $100 in sales, $70 goes to costs and operations; $30 is left as net profit (30% margin).
Catalysts and risks
ARR (annual recurring revenue) grew 11.5% in FY2025.
Monetizing Firefly built into Creative Cloud as a pricing lever.
Document Cloud and Acrobat keep expanding margin on top of the PDF standard.
Substitution by generative AI: Firefly, Midjourney and Canva compete where Photoshop once ruled.
CEO transition announced for March 2026; founder Narayen is stepping down.
Moat erosion isn't visible in the figures yet, and that breeds false calm.
Charlie's note
“You pay around 26x cash flow for a business with 89% margin and 11% growth — a sensible price for that kind of quality, as long as AI doesn't eat its lunch. Firefly will tell you whether the moat holds or was just painted on.”
Analysis · July 2026
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