Adobe

  • Digital media and marketing software   firm Adobe reported Q1 2022 results with the company   reporting an adjusted EPS $3.37, an increase of 7% on the corresponding   period of 2021. Revenue for the quarter totaled $4.26 billion, an increase of   17% on an adjusted basis. Analysts had expected Adobe earnings of $3.34 a   share on sales of $4.24 billion. For Q2, Adobe is forecasting adjusted   earnings of $3.30 a share on sales of $4.34 billion. 

  • Looking at the various business segments. The Digital Media segment grew   revenue 9% to $3.11 billion, as creative revenue rose 7% to $2.55 billion and   document cloud revenue gained 17% to $562 million. The Digital Experience   segment saw revenue rise 13% to $1.1 billion, with digital experience   subscription revenue up 15% to $932 million.

  • Looking at the various business   segments. The Digital Media segment grew revenue 9% to $3.11 billion, as   creative revenue rose 7% to $2.55 billion and document cloud revenue gained   17% to $562 million. The Digital Experience segment saw revenue rise 13% to   $1.1 billion, with digital experience subscription revenue up 15% to $932   million.

  • Adobe continues to benefit from a surge toward digital content creation. Although revenue and EPS growth this year is likely to be weaker than investors have seen in the past several years, Adobe is still targeting a big piece of a massive digitisation market. Most importantly in our view Adobe has an extensive moat. Acrobat software has become the standard for reading and creating documents electronically. In addition customers, such as graphic designers, are trained early in their careers to use products like Photoshop and Illustrator, making it difficult for competitors to take meaningful market share. High switching costs make it tough for customers to get comparable products elsewhere or do their job without Adobe. As if switching costs weren't enough, Adobe also benefits from the network effect. With more than 500 million copies downloaded, Acrobat has a foothold on computer desktops everywhere.

Adobe