Business

Continued strength in Adobe’s cloud businesses helped the company achieve significant revenue growth in its fourth quarter (ended Dec. 1), according to CEO and president Shantanu Narayen.

The company’s “strong year” was “highlighted by record Creative Cloud, Document Cloud and Experience Cloud revenue, and capped-off by the first ever $2 billion quarter in company history,” he said Dec. 14 in an earnings call with analysts.

In Q4, revenue grew 25% from a year ago, to $2.01 billion, while profit soared to $501.55 million ($1.02 a share) from $399.61 million (81 cents a share). “Our strong results are validation of the relevance of Adobe’s mission to change the world through digital experiences,” he said. The company exited the year with more than $5.2 billion of digital media annualized recurring revenue (ARR) and the net ARR increase in Q4 was $359 million, “fueled by our ability to attract and retain new users, deepen product engagement, and drive new opportunities through services,” he told analysts.

Currently, “tens of millions of people” use Creative Cloud and Adobe achieved Creative Cloud revenue of $1.16 billion in Q4, he said. At the company’s annual MAX creativity conference in October, it introduced the next generation of Creative Cloud, including a set of new applications across the design, video and photography segments, he noted.

Adobe announced recently that Scott Belsky returned to the company as chief product officer and EVP of Creative Cloud. In that role, “he will focus on product delivery and driving long-term innovation for Creative Cloud products and services,” Narayen said.

Adobe Document Cloud recorded revenue of $235 million in Q4 and the company grew Document Cloud ARR to $600 million, he said, adding: “Mobile has become the new frontier for Document Cloud. This quarter, we announced new updates to Adobe Scan which leverage Adobe Sensei to capture and create intelligent PDFs on your mobile device. To date, Adobe Scan has had more than 5 million downloads.” Sensei is Adobe’s artificial intelligence platform.

Adobe Experience Cloud processed about 65 trillion data transactions for customers in Q4, and 186 trillion data transactions in the trailing four quarters, Narayen went on to say.
Standout strategic initiatives contributing to growth in the quarter included its relationship with Microsoft and the integration of Adobe Experience Manager with Microsoft Dynamics, he also said.

Pivotal Research Group continued to think of Adobe’s businesses “in a more favorable light than all but a handful of the other companies we cover,” analyst Brian Wieser said in a research note Dec. 15, after the results were announced. “The company appears to be well run, its customers generally like them, their long-term strategy is consistent with views we have formed from our own industry experience and ongoing interactions with practitioners, and there are no particular reasons to say any of this changes any time soon,” he said.