Adobe’s Digital Marketing segment grew ~7% in 3Q16
Previously in this series, we saw how consistently strong growth in the Digital Media segment helped Adobe Systems (ADBE) post better-than-expected fiscal 3Q16 results. In this part, we’ll look at the performance of Adobe’s other operating segment, Digital Marketing. We know that this segment caters to the rapidly growing big data analytics, mobility, and social media spaces, which are rapidly changing the IT (information technology) landscape.
The ongoing SMAC (social, mobile, analytics, and cloud) revolution, coupled with increased spending in the digital marketing space, has benefited Adobe.
Ovum, a global analyst firm, named Adobe an overall market leader for digital marketing platforms in late 2015. In fiscal 2Q16, Adobe Campaign Solution was named a leader by Forrester Research in its 2016 Cross-Channel Campaign Management Wave report, and by Gartner in its 2016 Magic Quadrant for Multichannel Campaign Management report.
Adobe’s Marketing Cloud leads to growth
Adobe’s Digital Marketing segment grew ~7% to $429.6 million in fiscal 3Q16 on the back of a consistent increase in Marketing Cloud revenue. Adobe Marketing Cloud, which grew 10% to $404 million, plays a significant role in the growth of this segment. Adobe’s Digital Marketing segment comprises the Adobe Marketing Cloud, LiveCycle, and Web Conferencing subsegments. Although Marketing Cloud continued to grow, a consistent decline in LiveCycle and Web Conferencing revenues, which fell ~25% in 3Q16, brought down the segment’s overall revenue in fiscal 3Q16.
Adobe accounts for 0.24% of the SPDR S&P 500 ETF (SPY). SPY has a 7% exposure to the application software sector.