Adobe

Adobe is an American software company founded in 1982 by John Warnock and Charles Geschke. Its own timeline says they set out to change printing and publishing with an all-digital approach. Headquarters: San Jose, California. According to its annual report on Form 10-K, 96% of its revenue in the fiscal year ended November 2025 came from subscriptions.

A lineage of tools

Adobe's products spread outward from the mechanics of printing to images, documents and video. Years follow Adobe's own timeline.

Macromedia's Flash was also how YouTube played its videos. Photoshop has stayed in the workflow into the generative-AI era: in the US Copyright Office's handling of an AI-generated prize winner, the human edits made in Photoshop were the part found registrable.

From boxes to subscriptions

The change that reshaped Adobe most was how it sold. In May 2012 it launched the subscription-based Creative Cloud alongside Creative Suite 6. In May 2013 it announced that it would discontinue future development and new releases of the perpetually licensed Creative Suite and focus on Creative Cloud. In its 10-Q for that period, Adobe warned that falling perpetual-licence revenue would make total revenue for fiscal 2013 decline. Digital Media annualized recurring revenue (ARR) stood at US$440 million at the end of May 2013.

Adobe's timeline describes the Creative Cloud announcement as making it the first major software company to transition to a subscription-based model. That is the company's own framing.

Figma, and cancelling a subscription

The subscription business, once stable, was checked from outside twice.

The first time was an acquisition. On 15 September 2022 Adobe announced it would buy Figma, the web-first collaborative design tool, for about US$20 billion, roughly half cash and half stock. On 18 December 2023 the two companies mutually agreed to terminate the deal, citing no clear path to approval from the European Commission and the UK Competition and Markets Authority, and Adobe paid a US$1 billion termination fee in fiscal 2024.

The second was cancellation itself. The Federal Trade Commission investigated from June 2022, and on referral the Justice Department sued in the US District Court for the Northern District of California on 17 June 2024. The complaint alleged violations of the Restore Online Shoppers' Confidence Act (ROSCA) and the FTC Act: that Adobe used fine print and inconspicuous hyperlinks to hide important terms, including a hefty early termination fee, and made cancelling convoluted. On 2 May 2025 the court denied Adobe's motion to dismiss. The case was settled in March 2026, and the Justice Department filed a proposed stipulated order requiring a US$75 million civil penalty, US$75 million in free services for customers, upfront disclosure of any early termination fee and how it is calculated, and easy ways to cancel.

What Adobe says about Firefly

In March 2023 Adobe announced Firefly, its family of generative-AI models. In its 2025 10-K the company calls the Firefly models "commercially safe" and says they are trained on data Adobe has the rights to use, namely licensed content and public-domain assets. Every generated asset carries Content Credentials showing that generative AI was used, and some enterprise plans offer intellectual-property indemnification for the output. All of this is Adobe's own description, not an outside audit of the training data.

Key events

• 1982: founded by John Warnock and Charles Geschke.
• 1985: PostScript released.
• 1990: Photoshop.
• 1993: PDF and Acrobat.
• 2005: Macromedia acquired.
• May 2012: Creative Cloud launched.
• May 2013: Adobe announces the end of new Creative Suite releases.
• 15 September 2022: Figma acquisition announced (about US$20 bn).
• March 2023: generative-AI Firefly announced.
• 18 December 2023: Figma deal terminated.
• 17 June 2024: the Justice Department sues over subscription cancellation.
• March 2026: settlement with the Justice Department.

Financials

Fiscal year ended 28 November 2025, per the 10-K.

• Revenue: US$23.77 bn (+11%), of which subscription US$22.90 bn
• Net income: US$7.13 bn (+28%); the prior year included the US$1 bn Figma termination fee as an expense
• Total Adobe ARR: about US$25.2 bn as of 28 November 2025
• Cash flow from operations: US$10.03 bn