Adobe Beats and Raises Guidance, but CFO Exit to Marvell Sinks the Stock
A clean quarter and a higher full-year forecast were no match for the news that finance chief Dan Durn is leaving for chipmaker Marvell, the second top-level exit at Adobe in three months.
Adobe's second-quarter report beat Wall Street estimates on profit and revenue and came with a raised full-year forecast. The stock fell more than 10 percent on Friday morning, June 12, anyway.
The selling had little to do with the quarter and a lot to do with who is leaving. Chief Financial Officer Dan Durn is departing for chipmaker Marvell Technology, Adobe disclosed, the second exit from the top of the company in a single season: Chief Executive Shantanu Narayen announced his own planned departure three months ago.
Steve Day, Adobe's senior vice president of corporate finance, becomes interim CFO on June 15. That is the same day Durn starts at Marvell.
A quarter with little to fault
Taken on their own, the numbers read well. Adjusted earnings of $5.96 per share rose 18 percent from a year earlier and beat the Zacks consensus by 2.23 percent. Revenue of $6.618 billion grew 13 percent as reported, 11 percent in constant currency, and topped estimates by 2.5 percent. Gross margin on a GAAP basis widened slightly to 89.2 percent, while the adjusted operating margin of 44.5 percent contracted 100 basis points as spending rose.
Subscriptions remain the engine, bringing in $6.416 billion, or 97 percent of all revenue, up 13.7 percent year over year. Total annualized recurring revenue ended the quarter at $27.1 billion, including roughly $480 million from the Semrush acquisition, and remaining performance obligations stood at $22.27 billion.
The smaller lines moved in opposite directions: product revenue of $89 million edged up 1.1 percent, while services and other revenue of $113 million fell 21.5 percent.
The figure Adobe most wants investors to notice: AI-first ARR more than tripled from a year earlier and now exceeds $500 million.
| Q2 FY2026 | Result | Versus a year ago |
|---|---|---|
| Adjusted EPS | $5.96 | +18% |
| Revenue | $6.618 billion | +13% reported |
| Subscription revenue | $6.416 billion | +13.7% |
| AI-first ARR | over $500 million | more than tripled |
Guidance moved up too. Adobe now expects fiscal 2026 adjusted earnings of $24.35 to $24.45 per share, up from $23.30 to $23.50, on revenue of $26.5 billion to $26.6 billion, with a 45 percent adjusted operating margin. For the current quarter it guided to revenue of $6.67 billion to $6.72 billion and earnings of $6.05 to $6.10 per share.
Why the market sold anyway
A finance chief leaving after a clean quarter would normally rate a paragraph in the press release. Context is what makes this one expensive. Adobe shares have lost more than 37 percent this year, while the broader technology sector gained 13.1 percent, as investors weigh competition from AI-native design platforms such as Figma and Canva. The company is now running transitions in the CEO and CFO chairs at the same time, in the middle of the most contested product shift in its history.
Durn's destination tells its own story about where investors believe the money is going. Marvell supplies custom chips and networking gear for AI data centers, and it has had Durn on its board for the past two years; before Adobe he ran finance at Applied Materials, NXP Semiconductors and GlobalFoundries. He replaces Willem Meintjes, who stays on as an adviser through April 2027. Marvell also reaffirmed its quarterly guidance, a signal the hire is about growth rather than repair.
Whoever takes the job permanently inherits room to work. Adobe held $5.62 billion in cash and short-term investments as of May 29, carried $4.8 billion in long-term debt, and generated $2.16 billion in operating cash flow during the quarter. About $27 billion remains available under buyback authorizations, including the $25 billion program announced in April.
What the market is pricing, then, is not the quarter but the handover. The raised outlook implies ending-ARR growth of 10.2 percent this year. Whether an interim finance chief and a departing CEO can defend that number against Figma and Canva is the question the stock now trades on.
