M+E Connections

Adobe reported strong results on Dec. 16 for its fourth quarter (ended Dec. 3), with new company CFO Dan Durn noting on a combined earnings call and financial analyst meeting that it was the first $3 billion Digital Media and first $1 billion Digital Experience revenue quarter to date for the company.

Digital Media revenue came in at  $3.01 billion, up  21% from a year ago as Creative revenue grew to $2.48 billion (up 19%) and Document Cloud revenue increased to $532 million (up 29%). Digital Experience segment revenue came in at $1.01 billion, up 23% from a year ago as subscription revenue increased 27% to $886 million. Adobe’s total Q4 revenue increased 20% to  $4.11 billion.

It was a “tremendous finish to the year” for Adobe’s three strategic clouds, according to Durn. In Q4, Adobe added $430 million in new Creative annual recurring revenue (ARR), he told analysts.

“Growth drivers in the quarter included acquisition of new users on Adobe.com,” along with “seasonal Q4 strength in the enterprise and success co-selling Frame.io with our Creative Cloud enterprise offerings,” he said.

Adobe’s recent acquisition of cloud video collaboration platform Frame.io stands to help Adobe reach new customers, Shantanu Narayen, Adobe CEO and chairman, had said on the company’s Q3 earnings call. “The addition of Frame.io creates an opportunity for Adobe, in conjunction with the partner ecosystem, to expand beyond video editors to a broader set of customers, teams and enterprises,” he said at the time.

The company added a record $141 million in new Document Cloud ARR in the quarter, Durn said on the Q4 call. “Our integrated Document platform is clearly resonating with customers around the globe,” he told analysts, adding: “We continue to see momentum with enterprises, small businesses and individuals using web and mobile-first tools.”

“When you look at Adobe’s foundational strengths,” there are “very few companies that are as leveraged to the digitization of the global economy as well as we are,” he went on to say.

“From the way people create and communicate, to the future of productivity and digital collaboration in a distributed work environment, to the digitization of businesses, driving customer engagement with data-driven insights to personalized customer experiences” and doing it at a massive scale with artificial intelligence and machine learning, “global trends toward digitization have so many intersections with Adobe’s unique strengths,” he explained.

He added: “Digital content and data are the fuel of the digital economy and I believe no one is better positioned than Adobe to be the digital enabler of the world.”

Earlier in the week, Adobe introduced Creative Cloud Express, Narayen noted on the Q4 call. “Creative Cloud Express is the start of a brand new journey to introduce first time creators to Adobe creative tools, while adding significant value to all of our current Creative Cloud subscribers,” he explained.

“I think it marks a new chapter of creation, collaboration and sharing on the web and leverages the unique technology and capabilities of Adobe’s flagship products,” Narayen told analysts, adding: “It also builds on the collaboration capabilities we debuted at MAX.

Meanwhile, with the recent acquisition of Workfront, Adobe is “now empowering companies to optimize business outcomes by connecting creative and marketing professionals to manage all creative workflows across the entire marketing lifecycle,” Narayen said.

Adobe is eyeing a total addressable market for the company of about $205 billion in 2024.

Narayen also announced Anil Chakravarthy and David Wadhwani were promoted to the roles of president of the Digital Experience and Digital Media businesses, respectively.