Adobe Systems Inc (NASDAQ: ADBE) used to be the go-to software as a solution (SaaS) company for media and publishing before the internet was even cool.
Almost every company’s designers used its software to layout brochures, newsletters, ads, you name it.
It was a major player in the first wave of digital publishing, which then became digital media, as the internet became a more powerful force and increasing bandwidth allowed for denser files – i.e., photos and videos – to be built into sites.
3D printing was a hot topic a few years ago but the fervor in the markets has died down. However, 3D printing is still a major force, it has become so ubiquitous so quickly that there are a lot of players in a relatively small niche market.
Plus, a company the size of ADBE packages something like 3D printing into one of its subscription packages, so it’s not a standalone product. For ADBE, 3D printing is a feature, not a core revenue product.
But its influence in this space is emblematic of how well ADBE has adapted through all the changes that are constantly happening in the tech sector.
A good example of this was how quickly ADBE transitioned from selling software and licenses to bundling software into subscription-based packages. It was an SaaS-driven creative firm before it was cool for more functional tasks like HR or CRM.
That has helped ADBE make the next leap even more seamlessly. Now ADBE is distributing its services via the cloud. That allows customers to take advantage of working remotely or off mobile platforms.
These days, ADBE offers 3 basic packages – Creative Cloud, Experience Cloud and Document Cloud.
The big money maker remains Creative Cloud, which houses all the products that most of us know. In Q1 of this year, Creative Cloud brought in $1.23 billion; Experience Cloud $554 million; and Document Cloud $231 million.
Revenue for the quarter was up an impressive 24% compared to the same quarter last year. It was driven by rising revenue from its subscription-based services. Operating income was up 50% and net income was up 46% for the quarter.
The Experience Cloud (aka, Digital Experience) division grew 16% and from a recent presentation at the Adobe EMEA Summit in London, ADBE is looking for this division to be an engine of growth moving forward.
Basically, this suite of products is built to support personalizing marketing efforts for its clients. It’s a suite of products focused on running marketing campaigns, exploring the analytics, customizing the offer to a granular level and analyzing customer data.
This is one of the biggest trends in retail – from clothing to financial services – and as usual, ADBE is ahead of the curve.
Up 33% year to date, ADBE stock still has plenty of growth ahead.
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Source: Investor Place