HAS Reddit Mentions | ChartExchange

TL;DR: Wall Street has apparently concluded that because ChatGPT can generate an image of Shrek fighting Jerome Powell in the Costco parking lot, Adobe is now a dying company.
Unfortunately, Adobe has neglected to die.
Revenue: growing. Subscriptions: growing. Cash flow: growing. Users: growing. Shares outstanding: shrinking. Stock price: LMAOOOOOOOO
ADBE is around $239 and roughly 13x trailing GAAP earnings. I think Mr. Market has suffered a traumatic brain injury.
Not financial advice. I learned DCF approximately 15 minutes ago and immediately became dangerous.
# I FOUND THIS SHIT BY ACCIDENT
I was looking for reasonably priced companies because apparently buying businesses based on the amount of money they make is something people used to do before we invented 0DTE options, found Adobe, opened the 5Y chart.
\-60%.
Jesus Christ.
Did Photoshop give everyone AIDS? Did Acrobat assassinate the president? Did Premiere Pro become Premiere Amateur?
I assumed something catastrophic happened.
So, against my better judgment, I did something deeply inappropriate for this subreddit: I opened the fucking 10-K.
And then things got weird. Revenue went up. Cash flow went up. Earnings went up. Subscription revenue went up. Shares outstanding went down. The company improved. But the stock got taken behind the Wendy's and shot.
So either:
A) I am missing something enormous;
B) AI is about to murder this company so violently that the financial statements simply haven't noticed yet; or
C) Mr. Market is being a fucking idiot.
Welcome to my DD.
# PART I: 2021 — EVERYONE WAS ON CRACK
Adobe peaked near $688 in 2021.
This was the era when interest rates were approximately fuck all, every software company was apparently going to conquer the planet, and Jerome Powell was discovering new toner cartridges.
Let's see what you actually got for your $688.
FY2021:
Operating cash flow: $7.230B
Capex: $348M
Therefore conventional FCF: $6.882B
SBC: $1.069B
Now, some people add SBC back and pretend it isn't an expense. I have developed an innovative accounting framework called: PAYING EMPLOYEES COSTS MONEY. So $6.882B - $1.069B = $5.813B
Adobe had roughly 476M shares. Economic cash generation: \~$12.20/share. At \~$688: \~56x.
If Adobe distributed every fucking dollar to you and never grew again, you'd make your money back sometime around the heat death of the universe.
Great business. Fucking psychotic price.
# PART II: THE COMPANY GOT BETTER AND EVERYONE DECIDED THEY HATE IT
Adobe FY2025:
Revenue: $23.769B
Subscription revenue: $22.904B
Operating cash flow: $10.031B
Capex: $179M
About 96% of revenue is subscriptions. This company generates $24 billion a year selling software that already exists to people who mostly already use it. Do you understand how fucking beautiful that business model is?
# PART III: I PUT ON A BERKSHIRE HAT AND STARTED SAYING "OWNER EARNINGS"
Trailing operating cash flow: \~$10.8B
Capex: \~$0.2B
SBC: \~$2.1B
$10.8B - $0.2B - $2.1B = \~$8.5B
Then I rounded it DOWN to $8B because unlike an equity research analyst trying to hit his price target, I am capable of subtracting numbers from my own thesis.
Shares outstanding: \~389M
Owner earnings/share: \~$20.55
Stock: \~$239
Therefore: \~11.6x normalized owner earnings, \~8.6% owner-earnings yield. GAAP P/E: \~13x.
I checked this several times because I assumed I'd accidentally divided by the population of Nebraska.
# PART IV: GENERATIVE AI HAS APPARENTLY KILLED ADOBE
# 🚨 BREAKING NEWS 🚨
ADOBE IS FUCKED. CHATGPT CAN MAKE PICTURES. EVERYONE PANIC. SELL PHOTOSHOP. SELL ILLUSTRATOR. SELL ACROBAT. SELL THE FUCKING OFFICE CHAIRS.
There is only one small problem.
Adobe's latest quarter:
Revenue: +13% YoY
Subscription revenue: \~+14%
Nine-month revenue: \~+13%
Monthly active users: MORE THAN ONE BILLION
AI-first ARR: +150%+ YoY
Apparently Adobe's customers have not yet received the Reddit DD explaining why they should stop giving Adobe money.
**ONE BILLION FUCKING PEOPLE.**
Pause. Adobe says its creativity and productivity products have more than **1,000,000,000 MONTHLY ACTIVE USERS.**
There are a little over 8 billion humans. Roughly one human in eight uses this shit monthly. Imagine lining up humanity. Chinese guy, Indian guy, American guy, Nigerian guy, Brazilian guy, Indonesian guy, German guy**,** some motherfucker trying to rotate a PDF.
Repeat until Finland. This is apparently our dying software company.
**"BUT MIDJOURNEY CAN MAKE A PICTURE"**
Correct.
Observe: "make me an image of Warren Buffett wearing Supreme while riding a velociraptor through Times Square."
Boom. AI. Adobe bankrupt.
Except professional creative work occasionally requires slightly more precision than "make dinosaur cooler." Try "change these two pixels from #ffffff to #fffff0".
AI: "Certainly! I've completely redesigned the background, added a woman with seven fingers, changed your company's logo to Cyrillic and somehow inserted a lamp."
Professional: "for fuck's sake" *opens Photoshop*.
Adobe: that will be $22.99/month.
**PHOTOSHOP IS NOT A FUCKING IMAGE SLOT MACHINE**
This is the part I think people miss. Generative AI is extremely good at "give me something approximately like this." Professional software exists for "give me EXACTLY this."
AI is not necessarily a replacement for that environment, it's another tool inside the environment. So Adobe doesn't need to defeat generative AI, it needs to put a button in Photoshop that says:
**DO THE AI SHIT**
Which is basically what Firefly is.
**PREMIERE PRO: APPARENTLY HOLLYWOOD WILL JUST TYPE THE MOVIE NOW**
AI will automate video editing. But eventually an editor still needs:
FRAME 182,736. CUT. No. ONE FRAME EARLIER. Audio starts here. Use Take 4. Color this shot. Fix that transition. Why is the fucking boom mic visible? Undo. UNDO.
**CTRL+Z CTRL+Z CTRL+Z CTRL+Z**
Congratulations. You have reinvented Premiere Pro. Christopher Nolan is not going to type "make Oppenheimer but 14 minutes shorter and more whimsical" and send the resulting .mp4 to IMAX.
**ILLUSTRATOR**
AI: "here is your beautiful new corporate logo."
Client: "fantastic, can I have the vector file?"
AI: "no"
Client: "pantone colors?"
AI: "no"
Client: "editable paths?"
AI: "no"
Client: "can you make the logo exactly 4.2% wider without changing anything else?"
AI: *creates a completely different logo*
Designer: *opens Illustrator*
Adobe: *+1 subscription*
**ACROBAT: THE SOFTWARE COCKROACH THAT WILL OUTLIVE HUMANITY**
I cannot emphasize this enough.
**PDFS ARE NOT GOING ANYWHERE.**
Civilization could collapse tomorrow. Electricity disappears. Nation-states dissolve. The oceans boil. Four humans remain alive. One of them will email another like **"**Contract\_FINAL\_v2\_FINAL\_USETHISONE\_revised(4).pdf".
Lawyers use PDFs. Courts use PDFs. Governments use PDFs. Banks use PDFs. Universities use PDFs. Doctors use PDFs. Accountants use PDFs. Your fucking refrigerator manual is a PDF.
Adobe says 18B+ PDFs were edited with Acrobat in the last year. Now Adobe puts AI inside Acrobat: "Summarize this document. Compare these contracts. Find the indemnity clause. Extract this table. Explain page 69. Find where opposing counsel buried the bullshit." This doesn't sound like AI killing Acrobat. This sounds like Acrobat ate AI and gained its powers.
**"CANVA IS GOING TO KILL ADOBE"**
Canva was founded in 2013. It's 2026. Adobe apparently forgot to die from that too. The person who needs "cute invitation for Brayden's 7th birthday" doesn't need Photoshop.
Great.
They haven't needed Photoshop for a fucking decade. I don't need Adobe to monopolize suburban birthday invitations. I need Adobe to remain embedded in professional workflows.
Different fucking market.
# PART V: THE MONEY PRINTER IS RUNNING BACKWARDS
Adobe share repurchases:
FY2023: \~$4.4B
FY2024: \~$9.5B
FY2025: \~$11.3B
2026: Board authorizes another $25B.
Normal tech company:
**BRRRRRRRRR NEW SHARES**
Adobe:
**SCHLORRRRRRP GIVE THEM BACK**
Shares outstanding have fallen massively from where they were years ago.
This matters because if the company earns $8B: $8B / 500M shares = $16/share. $8B / 400M shares = $20/share.
Same pie, fewer idiots at the table. More pie per idiot. I am one of the idiots.
# NOW LOOK AT THIS FUCKING COMPARISON
**2021**
Economic cash earning power/share:\~$12
Stock: up to \~$688
Multiple: \~50-56x
Market: "Holy fuck Adobe take my retirement account."
**2026**
Normalized owner earnings/share: \~$20.55
Stock: \~$239
Multiple: \~11.6x
Market: "Photoshop? In THIS economy? Disgusting."
# ?????????
EARNING POWER PER SHARE:
📈📈📈
STOCK:
📉📉📉📉📉
MULTIPLE:
**FELL DOWN THE FUCKING STAIRS**
This is the entire DD.
Everything else is me refusing to shut up.
# TO BE CLEAR: I MAY BE EXTREMELY WRONG
Here's the actual bear case.
AI could reduce seats. 10 designers become 7 designers + AI. That's bad. Canva/Figma/AI-native products can destroy the low end. Bad. AI inference is expensive. Margins could compress. Bad. Adobe could completely fuck up monetization. Bad. Subscription revenue has inertia, meaning current revenue growth could conceal weakening new customer economics. Very important.
Maybe the market sees the iceberg and I'm standing on the Titanic explaining that quarterly champagne consumption remains at record levels. Entirely possible.
# BUT HERE'S WHAT I DON'T NEED
I do NOT need:
* 13% growth forever;
* AI monopoly;
* Firefly world domination;
* Photoshop installed in every toaster;
* $700 ADBE;
* A 50x multiple;
* Sam Altman personally surrendering.
I need Adobe to remain a good business. That's basically it. At an \~8-9% normalized owner-earnings yield, modest per-share growth already gets interesting. If Adobe eventually grows like some boring mature software company? Fine. If current double-digit growth lasts longer than the market expects? Very fine. If earnings grow AND someday investors decide Adobe isn't Blockbuster with layers? OH FUCK.
# HOW I'D KNOW I'M REGARDED
If ARR persistently declines. If professional users start abandoning Creative Cloud. If owner earnings structurally decline. If pricing power disappears. If AI compute destroys margins. If buybacks stop actually shrinking the share count because SBC goes apeshit. If Hollywood fires its editors and Avengers 9 is generated entirely by a Discord bot... I will close the position and issue a formal apology to the bears.
Until then, I'm watching the business, not the scary red line on Yahoo Finance.
# CONCLUSION
Five years ago, great company with a fucking stupid price. Today, great company with a suspiciously normal price. Wall Street apparently sees Adobe and thinks legacy software company about to get annihilated by AI.
I see:
* \~13% current revenue growth
* \~14% subscription growth
* 1B+ MAUs
* enormous recurring revenue
* huge cash generation
* minimal physical capex
* shrinking share count
* \~13x GAAP earnings
* \~11-12x my normalized owner earnings
Maybe Wall Street knows something I don't. Maybe I'm about to learn a very expensive lesson about efficient markets. But I went looking for the dying business supposedly hiding underneath this five-year chart.
I CANNOT FIND THE FUCKING BODY. ADBE \~$239.
Bears, please explain where the corpse is before I financially inconvenience myself.
# SOURCES BECAUSE APPARENTLY WE DO THAT HERE NOW
**Adobe FY2021 10-K**
[https://www.sec.gov/Archives/edgar/data/796343/000079634322000032/adbe-20211203.htm](https://www.sec.gov/Archives/edgar/data/796343/000079634322000032/adbe-20211203.htm)
**Adobe FY2025 10-K**
[https://www.sec.gov/Archives/edgar/data/796343/000079634326000003/adbe-20251128.htm](https://www.sec.gov/Archives/edgar/data/796343/000079634326000003/adbe-20251128.htm)
**Adobe Q3 FY2026 10-Q**
[https://www.sec.gov/Archives/edgar/data/796343/000079634326000156/adbe-20260828.htm](https://www.sec.gov/Archives/edgar/data/796343/000079634326000156/adbe-20260828.htm)
**Adobe Q3 FY2026 earnings release**
[https://www.sec.gov/Archives/edgar/data/796343/000079634326000147/adbeex991q326.htm](https://www.sec.gov/Archives/edgar/data/796343/000079634326000147/adbeex991q326.htm)

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