How Will Adobe Benefit from Creative Cloud?



Creative Cloud and subscription are key growth drivers

Earlier in the series, we discussed expected growth in Adobe’s (ADBE) offerings. Its Creative Cloud offering and subscriber growth are expected to be key drivers of Adobe’s growth. Adobe’s Creative Cloud, which includes programs like Acrobat, Photoshop, and Dreamweaver, has thrived, while its smaller experience design software business has struggled. Creative products revenue rose 31% to $4.2 billion. Moreover, the tax overhaul could lead to more cash available to enhance IT spending, which would consequentially benefit Adobe’s digital marketing offerings.

About four years ago, Adobe transitioned from selling software to an SaaS (software-as-a-service) business model. It also added web analytics and AI (artificial intelligence) to its cloud offerings, and the improved performance of its offerings speak for itself. According to FactSet data, analysts expect creative products revenue of $1.2 billion and experience cloud revenue of $555.8 million.


Migration of creative cloud offering

The above presentation by MarketWatch shows that since the company decided to move its Creative Cloud offering to the cloud in late 2013, its stock has risen 370%. Adobe’s stock has been on the rise consistently since then. Last month, on February 23, 2018, the company’s market cap exceeded the $100 billion market cap for the first time.

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