Reported financials (EPS beat, 12.8% RPO growth, 75% QoQ Firefly ARR growth) contradict the bearish narrative of AI displacement causing revenue decline. The market is mispricing ADBE due to cohort drag, an AI displacement narrative, and CEO transition uncertainty, creating a valuation opportunity. ARPU expansion from Firefly credit consumption can outpace seat erosion, leading to net revenue growth. The stock's decline post-earning is an overreaction. Failure to meet the author's Q2 conditions (RPO growth ≥10% YoY, Firefly ARR QoQ growth ≥30%); a faster-than-modeled seat decline; execution risk during CEO transition.
ADBE
HIGH
Apr 01, 02:32
Key Points
['Bear case mechanism fuels ARPU growth', 'Firefly ARR growing 75% QoQ', 'Quantitative break-even model provided', 'Next catalyst: Q2 report June 11', 'CEO transition is a temporary overhang']
April 01, 2026 at 02:32