Adobe Inc.

The forensic scores present a mixed but mostly reassuring picture. The Beneish M-Score is -2.875, which is below -1.78 and therefore not in the elevated manipulation-risk zone. This is a screening result, not proof that the reported figures are accurate. The Altman Z-Score is 6.87, which is in the safe zone. Adobe is a software company rather than a bank, so the standard zone applies. The Piotroski F-Score is 7 of 9 computable signals, meaning seven of the nine checks that could be computed passed. The Fog Index is 22.11, above 18, which the label classifies as very hard to read. Readers may want to look at the MD&A's cost and segment tables directly rather than relying on the narrative summary. The 10-Q's remaining performance obligations were $22.16 billion, up 8%, which grew more slowly than quarterly revenue at 13%. That gap is worth tracking over future filings. Currency also mattered: a weaker U.S. dollar against EMEA currencies added about $280 million to nine-month revenue, while the cash flow hedging program produced net losses of $61 million for the same period. A goodwill impairment tied to the Publishing and Advertising business appears in the filing text, and the excerpt is truncated before its full size is shown. The risk factor excerpt comes from the 10-K for fiscal 2025, filed January 15, 2026, while the MD&A excerpt comes from a 10-Q filed September 22, 2026, so the two documents cover different periods.

Catalyst.Management points to subscription revenue, which reached $6.58 billion in the three months ended August 28, 2026, up 14% year over year. The MD&A credits strength in Creative Cloud flagship apps, Adobe Experience Manager, agentic web apps including the contribution from Semrush, and Acrobat. Total revenue for the quarter was $6.76 billion, up 13%. Adobe ARR reached $27.50 billion, up 11.2% when revalued at beginning-of-fiscal-2026 currency rates. Operating cash flow for the nine months was $7.65 billion, up 11%. For fiscal 2025, revenue was $23.77 billion and net income was $7.13 billion, up from $5.56 billion in fiscal 2024.

Hidden risk.Long-term debt rose from $4.13 billion at the end of fiscal 2024 to $6.21 billion at the end of fiscal 2025, an increase of about 50%. Over the same period, equity fell from $14.11 billion to $11.62 billion, and liabilities climbed to $17.87 billion. In the 10-Q, subscription cost of revenue rose 24% in the quarter, driven mainly by hosting and data center costs, while subscription revenue rose 14%. General and administrative expenses rose 30% for the nine months, with a loss contingency and a goodwill impairment each contributing to that increase.