AddedRisk Factors
•in the case of foreign transactions, the impact of particular economic, tax, currency, political, legal and regulatory risks associated with specific countries;
ADBEAdobe Inc.
Adobe’s mission is to empower everyone to create. 10-K, Item 1
- Employees
- 31,360
- Headquarters
- San Jose, CA
- CEO
- Shantanu Narayen
- Next results
- around Dec 9, 2026
10-K 0000796343-26-000003 (2026-01-15) vs 10-K 0000796343-25-000004 (2025-01-13)
| Section | Compared text | Words now | Changed |
|---|---|---|---|
| Risk Factors | Item 1A | 10,039 | 20.5% |
| MD&A | Item 7 | 6,172 | 34.7% |
| Legal Proceedings | Item 3, via Note 16 – COMMITMENTS AND CONTINGENCIES | 1,806 | 8.8% |
| Accounting Policies | Item 8, Note 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 4,209 | 11.4% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Risk Factors 280 words changed in this paragraph; it is 65% similar to last year's version.
The markets for our products, services and solutions are rapidly evolving and intensely competitive. We expect competition to continue to intensify. Our numerous competitors range in size from diversified include companies of various sizes and both public and private companies, including large, global companies and smaller companies with more specialized focuses, new entrants, and AI or cloud-native companies. Our competitors include companies with significant sales and research and development resources, broad brand awareness, long operating histories or access to large customer bases to small companies whose specialized focuses bases. Our competitors may allow them to more easily and effectively deploy technical, marketing and financial resources. resources more easily and effectively. Our competitors may develop or acquire additional products, services or solutions that are similar to ours or that achieve greater or faster acceptance, acceptance. Our competitors may undertake faster and more far-reaching and successful product development efforts or marketing campaigns or campaigns, may adopt more aggressive pricing policies. policies or may more effectively appeal to customers. As a result, current and potential customers may select the products, services or solutions of our competitors. Further, our future success depends on our continued ability to effectively appeal to businesses and consumers. New industry standards, evolving distribution and sales models, limited barriers to entry, short product life cycles, customer price sensitivity, global market economic conditions and the frequent entry of new products solutions or competitors may increase downward pressure on pricing and gross margins and adversely affect our renewal, upsell and cross-sell rates as well as our ability to attract new customers. In addition, we expect to face more competition as AI continues to advance and be integrated into the markets in which we compete. compete and to change the software industry. Our competitors or other third parties may incorporate develop AI into their offerings solutions more successfully and efficiently than we do and rapidly or successfully, including but not limited to different data training strategies or proprietary access to data and, as a result, other AI solutions may achieve greater and faster adoption, which could impair our ability to compete effectively and adversely affect our business and financial results. Other companies have, or in the future may obtain, proprietary rights that would prevent, limit or interfere with our ability to make, use or sell our AI offerings. Further, we expect AI offerings to be highly competitive and rapidly evolving. adoption. For example, we face increasing competition from companies offering generative and agentic AI capabilities, solutions, including text-to-image, text-to-video but not limited to prompt-based and multi-modal offerings that compete directly creation and editing, document productivity and understanding, ad distribution and creation, and purpose-built AI agents. Other companies have in the past, and may in the future prevent, limit or interfere with our creative offerings. ability to use third-party models in our solutions. If we are not able to provide products, services and solutions that compete effectively, we could experience reduced sales sales, which could materially and adversely impact our business could be adversely affected. and financial results. For additional information regarding our competition and the risks arising out of the competitive environment in which we operate, see the section titled “Competition” contained in Part I, Item 1 of this report.
Source: Item 1A, 10-K 0000796343-26-000003 vs Item 1A, 10-K 0000796343-25-000004
Accounting Policies 195 words changed in this paragraph; it is 32% similar to last year's version.
Our contracts with customers may include promises to transfer multiple goods products and services. For example, some Determining whether products and services are distinct performance obligations to be accounted for separately or combined as part of a single performance obligation may require significant judgment, primarily for our offerings solutions that include both on-premise and/or on-device software licenses and cloud services. Determining whether the software licenses and the cloud services are distinct from each other, and therefore performance obligations to be accounted for separately, or not distinct from each other, and therefore part of a single performance obligation, may require significant judgment. We have concluded that the certain subscription offerings, which include both on-premise/on-device software licenses and cloud services provided in our Creative Cloud services, represent a single, highly integrated performance obligation. This conclusion reflects the high degree of integration, interdependency and Document Cloud subscription offerings are not distinct from each other interrelation between the software and the cloud services, such that customers receive the intended benefit only when these components operate together. The nature of our promise to customers is to deliver a complete end-to-end solution, and the intended functionality and workflow efficiencies cannot be obtained from either the software or the cloud services on a standalone basis. Accordingly, revenue from each offering should be for these offerings is recognized ratably over the subscription period for during which the cloud services are provided. In reaching this conclusion, we considered the nature of our
Source: Item 8, Note 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, 10-K 0000796343-26-000003 vs Item 8, Note 1 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES, 10-K 0000796343-25-000004
MD&A 109 words changed in this paragraph; it is 33% similar to last year's version.
Source: Item 7, 10-K 0000796343-26-000003 vs Item 7, 10-K 0000796343-25-000004
Legal Proceedings 71 words changed in this paragraph; it is 88% similar to last year's version.
Since June 2022, we have been cooperating with the Federal Trade Commission (the “FTC”) staff in response to a Civil Investigative Demand seeking information regarding our disclosure and subscription cancellation practices relative to the Restore Online Shoppers’ Confidence Act (“ROSCA”). In November 2023, the FTC staff asserted that they had the authority to enter into consent negotiations to determine if a settlement regarding their investigation of these issues could be reached. On March 20, 2024, we were informed that the FTC had voted to authorize a filing of the case. The FTC then referred the case to the Department of Justice (the “DOJ”), and on June 17, 2024, the DOJ filed a civil complaint in the United States District Court for the Northern District of California, naming Adobe and certain of our employees as defendants. The complaint alleges that Adobe failed to clearly and conspicuously disclose material terms, failed to obtain express informed consent and failed to provide a simple cancellation mechanism regarding our disclosure and subscription cancellation practices in violation of ROSCA and the FTC Act. The DOJ is seeking injunctive relief, civil penalties, equitable monetary relief and other relief. On October 7, 2024, we filed a motion to dismiss the DOJ’s civil complaint, and that motion was fully briefed as of December 23, 2024. On May 2, 2025, the Court denied our motion to dismiss the complaint. The discovery phase is ongoing. The defense or resolution of this matter could involve significant monetary costs or penalties and have a significant impact on our financial results and operations. There can be no assurance that we will be successful in negotiating a favorable settlement or in litigation. Any remedies or compliance requirements could adversely affect our ability to operate our business or have a materially adverse impact on our financial results. At this stage, we are unable to estimate a reasonably possible financial loss or range of any potential financial loss, if any, as a result of this litigation.
Source: Item 3, via Note 16 – COMMITMENTS AND CONTINGENCIES, 10-K 0000796343-26-000003 vs Item 3, via Note 16 – COMMITMENTS AND CONTINGENCIES, 10-K 0000796343-25-000004
Every change, by type
Sentences and paragraphs of ADBE's Risk Factors and MD&A, 10-K 2026-01-15 against 10-K 2025-01-13. Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
•brand or reputational harm associated with our acquisitions, investments or other strategic transactions; and
AddedRisk Factors
to regulatory and customer notification requirements, violations of service level agreement commitments or financial liabilities and result in customer dissatisfaction or harm our business. If we supply materially inaccurate information or experience significant interruptions in our systems, our reputation could be harmed, we could lose customers and we could be found liable for damages or incur other losses.
AddedRisk Factors
Our solutions are incorporated into the supply chain of a large number of companies worldwide and, as a result, if our solutions experience a compromise, a large portion or, in some instances, all of our customers and their data for a given solution could be simultaneously affected. The potential liability and associated consequences we could suffer as a result of such a large scale event could be significant, and materially and adversely impact our business. Malicious actors may also engage in fraudulent or abusive activities through our solutions, including unauthorized use of accounts through stolen credentials, use of stolen credit cards or other payment vehicles, failure to pay for services accessed, or other activities that violate our terms of service. While we actively combat such fraudulent activities, we have experienced, and may in the future experience, impacts to our revenue and reputation from such activities.
AddedRisk Factors
systems. Even if such breach is unrelated to our security systems, solutions or programs, such breach could cause us reputational harm and require us to incur significant economic and operational consequences to adequately assess and respond to their breach, and to implement additional safeguards designed to protect against future breaches.
AddedRisk Factors
•changes in laws governing the flow of data across borders including into the United States;
AddedRisk Factors
We may be subject to certain aspects of the EU’s Digital Services Act, which imposes additional legal requirements on certain types of digital service providers, including online platforms and content sharing sites. Moreover, some of our customers are subject to the EU’s Digital Operational Resilience Act and similar UK regulatory requirements on operational resilience. There may be certain aspects of the EU’s Data Act that could apply to certain types of cloud services providers and require them to facilitate data portability (e.g., switching between services), as well as certain requirements concerning cross border international transfers of, and governmental access to, non-personal information outside of the European Economic Area. Further, the U.S. Department of Justice issued a rule entitled Preventing Access to U.S. Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons, which placed additional restriction on certain data transactions involving countries of concern and covered individuals that may impact certain business activities, and has impacted the transfer of data in connection with certain transactions.
RemovedRisk Factors
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RewordedRisk Factors
RewordedRisk Factors
For example, generative artificial intelligence technologies enable (“AI”), including generative and agentic, enables users of all skill levels to create and provide new ways of marketing, creating and editing content and interacting with documents, which could significantly disrupt industries in which we operate and our existing products, services and solutions and our business may be harmed if we fail to invest or adapt. documents.
RewordedRisk Factors
If we are unable to develop, manage and maintain our sales channels, including our direct sales force, third-party distributors, and sales partners, or third-party relationships upon which we rely for critical third-party relationships, such as our sales, partner and distribution channels, suppliers and service providers, business operations, our revenue and business may be adversely affected.
RewordedRisk Factors
Our competitors may develop or acquire products, services or solutions that are similar to ours or that achieve greater or undertake faster acceptance, may undertake and more far-reaching and successful product development efforts or marketing campaigns or campaigns, may adopt more aggressive pricing policies. policies or may more effectively appeal to customers.
RewordedRisk Factors
RewordedRisk Factors
While we have released continue to release new generative artificial intelligence products, such as Adobe Firefly, AI solutions and are focused to focus on enhancing the artificial intelligence (“AI”) AI capabilities of our products solutions and incorporating AI across existing products, services and solutions, there can be no assurance that our new or enhanced products solutions and AI innovations will be successful, adopted or monetizable or that we will innovate effectively to keep pace with the rapid evolution of AI across our offerings. solutions.
RewordedRisk Factors
Our numerous competitors range in size from diversified global include companies with significant sales and research and development resources, broad brand awareness, long operating histories or access to large customer bases to small companies whose specialized focuses may allow them to more easily and effectively deploy technical, marketing and financial resources. bases.
RewordedRisk Factors
Perception of our practices, products, services practices or solutions, even if unfounded, as a violation of individual privacy, data protection rights rights, cybersecurity or cybersecurity related contractual requirements, subjects us to public criticism, lawsuits, investigations, audits, claims and other proceedings by regulators, industry groups groups, customers or other third parties, all of which could disrupt or adversely impact our business and reputation and expose us to increased liability, fines fines, lost revenue and other punitive measures including prohibition on sales of our products, services or solutions, restrictive judicial orders and orders, disgorgement of data. data or other adverse consequences.
RewordedRisk Factors
We are, and may in the future become, subject to various legal proceedings (including class action lawsuits), claims, negotiations and negotiations, regulatory inquiries and additional claims, inquiries, investigations, enforcement actions and inquiries may arise in the future, such as those other actions, including relating to antitrust, consumer protection, data privacy and security, consumer protection, employment practices, product liability and the validity or alleged infringement of third-party intellectual property rights, including patent rights, among others.
RewordedRisk Factors
We provide products, services and solutions, directly and indirectly, to a variety of domestic and foreign government entities, which introduces certain risks and challenges not present in private commercial agreements, including varying governmental budgeting processes, processes; changes in governmental administrations and policies; fluctuations due to government spending cuts and shutdowns, shutdowns; and highly competitive and lengthy bidding process that may be subject to political influence and adherence to complex procurement regulations and other government-specific contractual requirements. influence.
RewordedRisk Factors
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Quiet changesRisk Factors
If we do not successfully innovate, adapt to rapid technological or industry changes and meet customer needs, our business and our financial results may be materially harmed.
Quiet changesRisk Factors
Quiet changesRisk Factors
Our future effective tax rates are likely to may be unfavorably affected by changes in the tax rates in jurisdictions where our income is earned, changes in jurisdictions in which our profits are determined to be earned and taxed, changes in the valuation of our deferred tax assets and liabilities, changes in or interpretation of tax rules and regulations in the jurisdictions in which we do business, or unexpected negative changes in business and market conditions that could reduce certain tax benefits.
AddedMD&A
Our Digital Media products, services and solutions help users create, design and publish rich content and 3D experiences, and improve productivity by transforming how they view, share and collaborate on documents and content. These offerings include our Creative Cloud flagship applications (“apps”) such as Adobe Photoshop, Adobe Illustrator, Adobe Lightroom, Adobe Premiere Pro and Adobe After Effects; as well as Adobe Acrobat, Adobe Express, Adobe Firefly and many more products, which are available across surfaces and platforms as desktop tools, web and mobile apps and cloud-based services. Adobe Express is our web and mobile app designed to enable a broad spectrum of users, including novice content creators and communicators, to create, edit and customize content quickly and easily with content first, task-based solutions. Our Adobe Acrobat offerings fuel document productivity, enabling users to create, collaborate, review, approve, sign and track documents at home, in the office and across devices. AI innovation is deeply infused into our Digital Media solutions, including through Adobe Firefly-powered generative AI features available across our Creative Cloud flagship apps, and through Acrobat AI Assistant, a generative AI-powered conversational interface designed to enhance document experiences. In August 2025, we released Acrobat Studio, which brings together Adobe Acrobat, Adobe Express and AI agents to further unite productivity and creativity, empowering users to quickly derive insights from their documents and create visually compelling content. Our Digital Media customers include business professionals, consumers, creative professionals, creators and marketing professionals.
AddedMD&A
During fiscal 2025, Annualized Recurring Revenue (“ARR”) was the key performance metric our management used to assess the health and trajectory of our overall Digital Media segment. Digital Media ARR was calculated as the sum of the annual value of Digital Media subscriptions and services and the annual value of Digital Media Enterprise Term License Agreements.
AddedMD&A
Spanning both our Digital Media and Digital Experience segments, we drove continued business success through audience-specific product innovation and go-to-market strategy focused on the following two customer groups:
AddedMD&A
•Business Professionals & Consumers desire web and mobile apps with easy-to-use AI capabilities, and are increasingly benefiting from using Adobe Acrobat and Adobe Express. Revenue associated with the Business Professionals & Consumers customer group consists of Adobe Acrobat offerings and Adobe Express, all of which are part of Digital Media.
AddedMD&A
•Creative & Marketing Professionals require agile and comprehensive solutions to create high volumes of compelling content, infused with commercially safe AI capabilities; and are benefiting from investments in powerful, integrated workflows through offerings such as Adobe Firefly and Adobe GenStudio. Revenue associated with the Creative & Marketing Professionals customer group consists of Digital Experience offerings as well as Creative Cloud flagship apps such as Photoshop, Lightroom and Illustrator within Digital Media.
AddedMD&A
Due to the nature of certain offerings which contain cross-product integrations or benefits, revenue attributable to certain product entitlements may be recognized in either customer group.
AddedMD&A
By viewing the business through this lens, we can more effectively execute our long-term growth strategies. Our success will be achieved through continued acquisition and retention of our customer base by delivering valuable new features and technologies to customers with our latest releases, including generative AI capabilities to enhance creativity, productivity and marketing, and expanding availability of our offerings across an increasing number of surfaces.
AddedMD&A
As part of our customer-focused strategy, we utilize a data-driven operating model and tailored go-to-market motion to raise awareness of our products and drive customer acquisition, engagement and retention. Overall, our strategy is designed to increase our revenue with existing users, continue to attract new customers, and grow our recurring and predictable revenue stream that is recognized ratably.
AddedMD&A
The increase in subscription revenue for the Digital Media segment was driven by strength in Creative Cloud Pro and other flagship apps as well as Acrobat across all routes to market and geographies. The increase in subscription revenue for the Digital Experience segment was driven by strength in GenStudio solutions, and Adobe Experience Platform and related apps.
AddedMD&A
During fiscal 2025 and 2024 as compared to the respective prior years, increases in subscription revenue for the Creative & Marketing Professionals customer group were driven by strength in Creative Cloud Pro and other flagship apps, GenStudio solutions, and Adobe Experience Platform and related apps. During fiscal 2025 and 2024 as compared to the respective prior years, increases in subscription revenue for the Business Professionals & Consumers customer group were driven by strength in Acrobat.
AddedMD&A
On July 4, 2025, the One Big Beautiful Bill Act (“2025 U.S. Tax Act”) was enacted in the United States. Among the changes, the 2025 U.S. Tax Act restores immediate expensing of domestic research and development costs and modifies certain international provisions effective for us starting in fiscal 2026 and 2027, respectively. The 2025 U.S. Tax Act did not have a material impact on fiscal 2025 effective rates for income taxes or for cash taxes paid. While we continue to evaluate the impact for future years, we anticipate a reduction to our effective rates for cash taxes paid in years after fiscal 2025.
AddedMD&A
On November 18, 2025, we entered into a definitive agreement to acquire Semrush Holdings, Inc., a publicly held brand visibility platform company, for approximately $1.9 billion of cash consideration. The transaction is subject to regulatory approvals and customary closing conditions and is expected to close in the first half of fiscal 2026. We expect to finance the acquisition using cash on hand.
RemovedMD&A
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RewordedMD&A
Determining whether the software licenses products and the cloud services are distinct from each other, and therefore performance obligations to be accounted for separately, separately or not distinct from each other, and therefore combined as part of a single performance obligation, obligation may require significant judgment. judgment, primarily for our solutions that include both on-premise and/or on-device software licenses and cloud services.
RewordedMD&A
For fiscal 2024, 2025, net cash provided by used for investing activities of $149 million $1.19 billion was primarily due to purchases of short-term and long-term investments, net of proceeds from the maturities of short-term investments, partially offset by and ongoing capital expenditures and purchases of long-term and short-term investments. expenditures.
RewordedMD&A
As of November 29, 2024, 28, 2025, the carrying value of our senior notes was $5.63 billion $6.21 billion, net of fair value of the interest rate swaps and unamortized discount and debt issuance costs, and our maximum commitment for interest payments was $806 million $1.03 billion for the remaining duration of our outstanding senior notes. notes and interest rate swaps.
RewordedMD&A
Components of % Change 2024-2023 2025-2024 Compensation costs 5 %% Software licenses 2 Professional and consulting fees 2 Lease-related asset impairments and other charges 7% Compensation costs 4 Professional and consulting fees (5) (7) Various individually insignificant items 2 1 Total change 8% 3 %%
RewordedMD&A
As we execute on our long-term growth initiatives, with focus emphasis on delivering product innovation value through AI-powered and driving adoption and usage highly differentiated solutions to meet the needs of our AI-powered solutions, diverse and expanding customer base, we have continued to experience growth in software-based subscription revenue across our portfolio of offerings.
RewordedMD&A
For fiscal 2024, 2025, net cash used for financing activities of $7.72 $11.06 billion was primarily due to payments for our common stock repurchases, partially offset by proceeds from the issuance repurchases and repayment of senior notes. our 1.90% 2025 Notes and 3.25% 2025 Notes.
RewordedMD&A
Revenue from Digital Media increased $1.79 billion and revenue from Digital Experience increased $473 $498 million during fiscal 2024 2025 as compared to fiscal 2023 driven by subscription revenue growth across our offerings. 2024.
RewordedMD&A
Our effective tax rate for fiscal 2024 2025 was lower than the U.S. federal statutory tax rate of 21% primarily due to the net tax benefits from effects of non-U.S. operations and the U.S. federal research tax credit, partially offset by the impacts of the Figma acquisition termination fee state taxes and state taxes. a net tax expense related to stock-based compensation.
RewordedMD&A
Components of % Change 2024-2023 Compensation costs 7% 2025-2024 Hosting services and data center costs 5 8 %% Loss contingency reversal 2 Compensation costs 2 Various individually insignificant items 2 1 Total change 14% 13 %%
RewordedMD&A
The currently enacted legislation is did not expected to have a material impact on our provision fiscal 2025 effective rates for income taxes, taxes or for cash taxes paid, however we continue to monitor developments and evaluate impacts, if any, of these provisions rules on our results of operations and cash flows.
RewordedMD&A
Our subscription revenue is comprised primarily of fees we charge for our subscription and hosted service offerings, and related support, including Creative Cloud and certain of our Adobe Experience Cloud and Document Cloud also includes subscription-based consulting services.
RewordedMD&A
Revaluing our ending ARR for fiscal 2024 2025 using currency rates determined at the beginning of fiscal 2025, 2026, our Digital Media Total Adobe ARR at the end of fiscal 2024 2025 would be $17.22 billion $25.66 billion, or approximately $117 $460 million lower higher than the ARR reported above.
Quiet changesMD&A
We adjust our reported ARR on an annual basis basis, primarily to reflect any exchange rate changes.
Quiet changesMD&A
Cost of subscription revenue consists primarily of third-party hosting services and data center costs, including expenses related to operating our network infrastructure and AI inferencing costs.
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