Adobe delivered a solid QQ1 2025 with revenue of $5.714 billion, up 10.27% year over year and 1.93% quarter over quarter, supported by strong gross margins and enduring software economics. The company posted an operating income of $2.163 billion and net income of $1.811 billion, translating to diluted earnings per share of $4.13–$4.15. Operating cash flow reached $2.482 billion and free cash flow $2.456 billion, underscoring durable profitability and ample liquidity to fund buybacks and strategic initiatives.
Key Performance Indicators
Revenue
Increasing
5.71B
QoQ: 1.93% | YoY: 10.27%
Gross Profit
Increasing
5.09B
89.11% margin
QoQ: 2.04% | YoY: 11.91%
Operating Income
Increasing
2.16B
QoQ: 10.53% | YoY: 138.48%
Net Income
Increasing
1.81B
QoQ: 7.61% | YoY: 192.10%
EPS
Increasing
4.15
QoQ: 8.92% | YoY: 202.92%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue: $5.714B; YoY growth: 10.27%; QoQ growth: 1.93%; Gross Profit: $5.092B; Gross Margin: 89.11%; Operating Income: $2.163B; Operating Margin: 37.85%; Net Income: $1.811B; Net Margin: 31.69%; EPS (GAAP): $4.15; Diluted EPS: $4.13; Operating Cash Flow: $2.482B; Free Cash Flow: $2.456B; Cash at End: $6.758B; Total Current Assets: $10.855B; Total Assets: $29.955B; Total Liabilities: $16.859B; Total Equity: $13.095B; Net Debt: -$0.195B (net cash); ROE: 13.8%; ROA: 6.05%; Current Ratio: 1.19; Gross Margin: 89.11%; EBITDA: $2.461B; Cash Conversion: FCF/Revenue ~ 42.9%; Revenue mix implied by segment-level data shows Sustained Software-as-a-Service economics and high-margin recurring revenue.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
5.71B
10.27%
1.93%
Gross Profit
5.09B
11.91%
2.04%
Operating Income
2.16B
138.48%
10.53%
Net Income
1.81B
192.10%
7.61%
EPS
4.15
202.92%
8.92%
Key Financial Ratios
Gross Profit Margin
Excellent
89.10%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Excellent
37.90%
Operating margin is exceptional, indicating strong pricing power and operational efficiency
Net Profit Margin
Excellent
31.70%
Net profit margin is exceptional, indicating strong pricing power and operational efficiency
Return on Assets
Fair
6.05%
Return on assets is acceptable but below top-tier companies
Return on Equity
Good
13.80%
Return on equity shows solid performance and effective asset utilization
Current Ratio
Adequate
1.19
Current ratio meets minimum requirements but limited cushion
Debt to Equity
Moderate
0.50
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
Growth
26.40x
Elevated P/E suggests growth expectations or premium valuation
Price to Book
High Premium
14.60x
Very high premium suggests asset-light business model or lofty expectations
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