ADBE — the bear case accelerates the bull case

I wrote up a primary source thesis on Adobe ($ADBE). Short version: Adobe reported Q1 FY2026 on March 12. EPS $6.06 vs $5.87 estimate. RPO $22.22B growing 12.8% YoY. Firefly ARR crossed $250M at 75% QoQ growth. Guidance reaffirmed in full. Stock fell 7.59%. The market is applying a seat-count framework to a business whose reported numbers show consumption acceleration. Those are two different models of the same company. Three reasons the multiple is where it's at: * Cohort drag: IGV ETF declined \~30% from its September 2025 peak, and Adobe sold with the category regardless of fundamentals * AI displacement narrative: the market assumes fewer seats equals less revenue, reported numbers show the opposite mechanic * CEO uncertainty: Narayen's departure was announced on the same call, guidance reset risk sits in the multiple until a successor speaks The bear case and the bull case are the same mechanism. Fewer seats × higher Firefly credit consumption per remaining seat = ARPU (average revenue per user) expansion. At 20% annual ARPU growth, seat erosion must exceed 17% annually before net Creative revenue declines. At 50% growth, the break-even is 33% erosion. Q1 credit consumption was running at 45% QoQ. Next gate: Q2 earnings June 11. Two conditions, both required: RPO ≥10% YoY and Firefly ARR QoQ ≥30%. Full write-up with crossover math, comp table, and break conditions here: [https://darrenleung1.substack.com/p/adbe-the-bear-case-accelerates-the](https://darrenleung1.substack.com/p/adbe-the-bear-case-accelerates-the) Happy to get pushback on the ARPU growth assumption or the agentic credit consumption argument.