Cloud Stocks: Adobe Revs Up Its Experience Platform

Adobe (ADBE) 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.

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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:

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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