Here's some press coverage of Adobe's results and prospects:
This interview with the CEO is pretty shallow - softball questions get PR-speak answers that I think say very little. If, as an example, you look at some of the user complaints about recent updates to Lightroom (they had to back off one update completely after user outcry and have followed that with a problem ridden one), the idea of Adobe as a product-driven innovator is a bit hard to take.
http://finance.yahoo.com/video/adobe-transition-desktop-cloud-pays-224523995.htmlhttp://investorplace.com/2016/03/adobe-adbe-stock-earnings-cloud/#.VvNtCmQrI18http://fortune.com/2016/03/22/adobe-marketing-analytics/?xid=yahoo_fortunehttp://marketrealist.com/2016/03/adobes-fiscal-1q16-results-beat-analysts-expectations/If you look at the percentage of Adobe's total revenue that their subscription income represents, it's 77%. It's clear why investors and Adobe love subscriptions, but they are betting on a continued state of no/few viable alternatives to their offerings (which isn't nearly as much the case in the mobile space as it is with the traditional graphics apps.
On page 6 of the earnings call transcript here there was a question specifically about Adobe Stock. They wouldn't give specifics but made general noises about growth
http://www.thestreet.com/story/13499952/6/adobe-systems-adbe-earnings-report-q1-2016-conference-call-transcript.html"...The first is, as it relates to revenue for stock during the quarter, it was in line with our expectations, so it's doing well. Again, just to refresh folks, we offer on-demand Stock as a way for people to buy particular Stock assets. We certainly offer a Stock-only subscription, and we then offer a combined subscription, which allows people to both access Stock, as well as our desktop products.
And so, across all of them, we are continuing to see accelerated usage of the Stock subscriptions. We don't break that out, Kash, in terms of what it is. And that's the reason we're focused on just continuing to make sure we gain market share in the stock, and deliver value. I think big picture, as we've always said, over 80% of the people who are buying or selling Stock are using our products, and that's the opportunity.
From a road map point of view,
we look at integrating the Stock service more directly within our applications, as a way to both increase awareness for our customers, and to improve their work flows. So as the year progresses, we continue to expect to do better in Stock, moving forward. So off to a good start, and it's early in the entire marketplace strategy for Adobe."
There were also questions about how AdobeStock would increase ARPU (average revenue per user), but there were some non-answers about why measuring that didn't really make sense any more because of so many variations - like their newly introduced offerings for the education market. Then there was a question about increasing ARPU in areas other than Stock. I think the analysts are trying to see if there's any growth potential in the business after you get everyone on the platform.
The CEO's answer"The opportunity for ARPU expansion around Stock is, we are attracting people to the platform. We are certainly attracting them at what we would call promotional pricing. So that's one big opportunity. And we're clearly seeing, as people come onto the Creative Cloud platform, they typically they come from CS-6 and prior versions, where we give them a promotional pricing, and then convert into the full pricing.
The other opportunity for ARPU expansion is moving from single app to the entire product. The third opportunity for ARPU expansion is Acrobat. We're certainly seeing a lot of people, and that's why we are moving them more through the Creative Cloud funnel, as opposed to the Document Cloud funnel, up-selling them into the entire product.
And last, but certainly not least, while it's not called ARPU, within the enterprise, as well, as we move from selling what used to be custom-like solutions of Creative Suite, into the entire Creative Cloud complete. So even on the core desktop products, there's ARPU expansion against all of those four.
Then, in addition to that, it's the new services that we have introduced, and will continue to introduce, that represents ARPU expansion."
I think it's interesting that no one asked them about the potential impact of competitors like Canva. To the extent that new non-designers are providing stuff for online presence for businesses, if Canva were to succeed, that might eat into the 30% of their cloud subscriptions that were new users not coming from existing Creative Suite purchases.
July 06, 2010, 22:35
