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Is Adobe Counting On a Price Hike to Grow Its Revenue?

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Plan price doubled, storage increased

In March, Adobe (ADBE) said that it expected its first-quarter revenue to be below the consensus estimate, sparking a sell-off in its stock. Now, Adobe appears to be looking to generate more revenue from its existing portfolio of creative products.

According to a report from PetaPixel, Adobe is testing doubling the price of its basic plan of photography apps from $10 per month to $20 per month. The current basic plan offers access to image-editing apps Photoshop and Lightroom as well as 20 GB of cloud storage. The new pricing plan will offer 1 TB of storage space.

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Adobe revenue rose 25%

Adobe generated revenue of $2.6 billion in the first quarter, representing an increase of 25% YoY. SAP SE (SAP) and Microsoft (MSFT) recorded revenue rises of 16% and 14% YoY, respectively, in the first quarter. Revenue fell 4.7% YoY at IBM (IBM) in the quarter. Oracle (ORCL) reported a 1.0% YoY fall in its revenue in its third quarter of fiscal 2019.

Adobe expects its second-quarter revenue to be $2.7 billion, below the consensus estimate of $2.72 billion.

Adobe is keen to diversify its business

Adobe is diversifying beyond its roots as a provider of creative software to provide marketing solutions as well. It’s recently purchased several marketing companies to shore up its marketing software business as it works to create new revenue sources outside of selling subscriptions to media production apps. Adobe has teamed up with Microsoft to help it grow its marketing business.

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