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Cloud Stocks: Adobe Revs up its Experience Platform

Posted on Monday, Dec 16th 2019

Adobe last week reported a strong fourth quarter that beat estimates. Its annual revenue crossed the milestone of $10 billion. It recently upgraded its product portfolio and its Digital Experience platform that have helped it build momentum for 2020.

Adobe’s Financials
Adobe’s fourth quarter revenues grew 21% over the year to a record $2.99 billion, ahead of the market’s estimates of $2.97 billion. Adjusted EPS of $2.29 also beat analyst estimates of $2.26.

By segment, revenues from the Digital Media segment grew 22% to $2.08 billion with Creative revenue growing 20% to $1.74 billion and Document Cloud growing 30.8% to $339 million. The Digital Experience segment reported a growth of 24% over the year to $859 million driven by the contribution from the $4.75 billion Marketo acquisition last year.

Digital Media Annualized Recurring Revenue (ARR) grew to $8.40 billion exiting the quarter, a quarter-over-quarter increase of $539 million. Creative ARR grew to $7.31 billion, and Document Cloud ARR grew to $1.09 billion.

Adobe ended the year with a record annual revenue of $11.17 billion, up 24% and non GAAP EPS was $7.87. Digital Media segment revenue was $7.71 billion, with Creative and Document Cloud at $6.48 billion and $1.22 billion, respectively. Digital Experience segment revenue grew 31% to $3.21 billion, and subscription bookings grew by over 20% during the year.

Adobe expects to end the first quarter with revenues of $3.04 billion with non GAAP EPS of $2.23. The market was looking for revenues of $3.09 billion with an EPS of $2.23.

For the year 2020, Adobe expects revenues of $13.15 billion and non GAAP EPS of $9.75. Revenue from Digital Media is expected to grow 19% and Digital Experience is expected to grow 16%, and Digital Experience subscription is expected to grow 18%.

Adobe’s New Offerings

During the quarter, Adobe extended its Digital Experience product portfolio to target mid-market and SMB businesses. The new products include:

Magento Commerce with cloud-based omnichannel solutions to empower merchants to integrate digital and physical shopping experiences;

Marketo Engage, part of Adobe Marketing Cloud, which enables marketers to target and nurture individual leads or accounts at scale and measure business impact across all customer touchpoints;

Adobe Analytics Foundation to empower disrupting brands to build and improve the customer experience with deep data insights;

Adobe Sign with e-signature capabilities tailored to the needs of small business users; and

Creative Cloud for Teams that offers simple license management, robust data security, technical support, and training resources.

At the Adobe MAX conference held last month, Adobe announced the next generation of Creative Cloud that include features powered by Adobe Sensei, its AI and ML layer. It also introduced Adobe Aero, a new authoring tool for creating in augmented reality. The company officially launched Adobe Photoshop on iPad and extended Adobe Fresco to Microsoft Surface, while also previewing the highly anticipated Adobe Illustrator on iPad and the all-new Photoshop Camera.

Last month, Adobe announced new innovations to its Adobe Experience Platform that address the challenges of personalization at scale: uniting fragmented data, eliminating inconsistency in the customer experience, and meeting governance demands. Innovations include industry-first data governance capabilities, general availability of Adobe’s Real-time Customer Data Platform (CDP) service, as well as new ways to personalize and deliver impactful experiences through customer journey orchestration and Photoshop-inspired analytics where Adobe Sensei can be added to automate complex or deep analyses.

The Adobe Experience Platform and Real-Time CDP generated strong interest and helped win 3M, Coca-Cola, Synopsys, Tommy Bahama, and Verizon as clients.

Its stock is currently trading at $320.58 with a market capitalization of $155.24 billion. It touched a 52-week high of $320.93 following the results. It was trading at a 52-week year low of $204.95 in December last year.

Photo Credit: midiman/Flickr.com

This segment is a part in the series : Cloud Stocks


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