Adobe (Nasdaq: ADBE) recently reported its first quarter results that surpassed market expectations. Its outlook was weak and is expected to be further impacted by the current crisis. But Adobe expects to manage that by continuing to expand its product offerings.

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Adobe’s Financials
Adobe’s first quarter revenues grew 19% to a record $3.09 billion, ahead of the market’s projections of $3.04 billion. Adjusted EPS of $2.27 was also ahead of the Street’s forecast of $2.23.

Adobe’s Subscription revenues grew 22% to $2.83 billion and Product revenues fell 17% to $143 million. Services & support revenues were flat at $123 million.

By segment, Digital Media segment revenue grew 22% to $2.17 billion. Creative revenue grew to $1.82 billion and Document Cloud revenue was $351 million. Digital Media Annualized Recurring Revenue (ARR) grew to $8.73 billion. Creative ARR grew to $7.58 billion, and Document Cloud ARR grew to $1.15 billion. Digital Experience segment revenues grew 15% to $858 million.

Adobe forecast revenues of $3.175 billion and an adjusted EPS of $2.35 for the current quarter, compared with the market’s forecast of revenues of $3.22 billion with an EPS of $2.35. Adobe expects the uncertainty from the current COVID crisis to impact its outlook.

Adobe’s Product Growth

Adobe continues to focus on new products and enhanced features to drive growth. Last quarter, Adobe announced Adobe Experience Platform as the first open and extensible platform for Customer Experience Management (CXM). The Experience Platform allows for real-time personalization at scale by providing marketers with access to known and unknown customer data that can help brands activate customer profiles across channels and leverage intelligent decision-making throughout the customer journey. Its Photoshop-inspired analytics will provide an easy, interactive way to dig deeper and uncover new insights.

Adobe is integrating Sensei, its AI and machine learning framework, into the offering to automate analysis and predict future behaviors. The service will also simplify data governance by allowing companies to access frameworks that help them enforce data usage policies and facilitate the proper use of their data.

Recently, Adobe also launched the ability to convert to and from PDF using a single -lick access on the web. The new feature will help transition users to PDF services and an Acrobat subscription. Adobe is providing PDF functionality through APIs and expanding its integrations with partners. Recently, it announced an integration with Google Drive so that users have access to Acrobat’s tools to create, view, annotate, modify, and share PDFs while staying within Google Drive.

Adobe has also been pushing on its Adobe Sign offering. During the last quarter, it extended the reach of Adobe Sign by adding an enhanced integration with SharePoint that will allow users to easily create and sign digital forms.

As I noted earlier, Adobe has built a strong ecosystem of plug-ins and integrations for its Creative, Experience, and Document Clouds. Within the Creative Cloud, for instance, it provides access to more than a thousand extensions, plug-ins, and scripts to drive creativity and extend the functionality of Creative Cloud applications. For the Experience Cloud segment, its library of apps, extensions, and scripts help customers manage their advertising, data analytics, campaign, and content management.

Within the Document cloud, it has allowed developers to build apps that help streamline document workflows and speed business with e-signatures. While Adobe may be following a dedicated PaaS strategy, it does not divulge statistics around these applications. It will be interesting to see how Adobe’s developers are benefiting from its PaaS focus.

Its stock is currently trading at $317.18 with a market capitalization of $152.82 billion. It touched a 52-week high of $386.75 in February this year. It was trading at a 52-week low of $255.13 in October last year.