Adobe reports record Q2 cash flow growth driven by strong revenues and AI portfolio expansion.

Adobe reported a second-quarter fiscal 2025 operating cash flow of $2.19 billion, up 13% year over year, despite a 15% sequential decline. The company’s expanding AI portfolio is driving bright prospects.

Factors driving Adobe’s cash flow growth include strong revenues from its core Digital Media segment and growing adoption of AI-driven features like Firefly and Acrobat AI Assistant. Adobe’s Remaining Performance Obligations of $19.69 billion offer visibility into future cash inflows.

Microsoft and Salesforce challenge Adobe’s market hold with robust cloud and productivity suites, and digital marketing tools respectively. Microsoft’s third-quarter fiscal 2025 revenue reached $37 billion, up 16% year over year, while Salesforce’s first-quarter fiscal 2026 operating cash flow was $6.5 billion, up 4% year over year.

Adobe’s share price has declined 14.9% YTD, trading at a premium with a forward 12-month Price/Sales ratio of 6.7X. The Zacks Consensus Estimate for fiscal 2025 and 2026 earnings show growth of 11.89% and 12.76%, with a Value Score of C.

Adobe’s shares have a Zacks Rank #2 (Buy) and the company is well-positioned for long-term value creation as it transitions into a digital experience and AI powerhouse.

For investors, Adobe’s financial strength and product innovation capabilities signal enduring momentum, supported by strong cash reserves and strategic investments. The company’s ability to adapt to changing market dynamics and maintain growth momentum is key.

Read more at Nasdaq: Adobe’s Record Q2 Cash Flow Sets the Path: A Key to Future Momentum?