Adobe has cloud services to thank for the strong showing in its second quarter ending May 30. The software and online services provider reported $1.07 billion in revenue in its second quarter earnings report this week.
That puts revenue above the targeted $1 billion to $1.05 billion range in earnings the company had expected for the quarter. The company says subscriptions for its Adobe Creative Cloud accounted for a considerable part of the growth.
The subscription-based service focuses on giving creative professionals, including small business owners, access to online tools, software, and storage. Sign ups for the service climbed from 464 thousand since the end of Adobe’s first quarter. Total subscriptions in the service now total 2,308,000.
Meanwhile, quarterly revenue of the Adobe Marketing Cloud for the quarter was $283 million, representing a 23 percent year-over-year growth, the company said.
The Adobe Marketing Cloud includes a variety of digital marketing services like analytics, an Adobe Experience Manager, social media marketing and advertising.
In an official statement released with the earnings report, Adobe President and Chief Executive Officer Shantanu Narayen explained:
“Adobe’s first-half upside was driven by accelerated adoption of Creative Cloud and Adobe Marketing Cloud. We’re excited about our upcoming product pipeline and expect a strong second half of the year.”
In the same release, Adobe Executive Vice President and Chief Financial Officer Mark Garrett added:
“Our earnings performance in Q2 reflects the financial leverage we have in our model. With Adobe’s Creative Cloud transformation behind us, our focus moving forward is to drive strong revenue and earnings growth with our market-leading cloud offerings.”
Adobe’s move toward the cloud and away from more traditional software has been a gradual one.
The company’s acquisition of Behance, an online portfolio site for creative professionals, in 2012, was part of an attempt to add community features to Adobe’s Creative Cloud services.
Another less obvious step might have been Adobe’s decision to close down its Acrobat Worskspaces earlier this year. The Google Drive-like service was primarily used as a place to store and collaborate on Adobe Acrobat files.
But as an official post on the company Website explained:
“Adobe is exiting the document authoring business for word processing, spreadsheets, and presentation files. Our focus will be to continue to provide world-class PDF creation and conversion products and services that enable our customers to take actions on their files anywhere on any device.”
A wide range of companies are moving to the cloud with services for small businesses. They run the gamut from older companies like Adobe, that are slowly transforming their services, to newer arrivals like Dropbox which pioneered specific cloud services.
All offer businesses the opportunity to say goodbye to the cost and worry of managing their own software and other technology needs in favor of purchasing exactly the services you need and letting someone else handle the headaches.
Image: Adobe
Aira Bongco
It is a good decision that they took the path of cloud. I guess for a business that’s focused on softwares, this is an inevitable path to take. While it is not easy to ride on the hype of the cloud, Adobe can still do it as they are quite a big company to begin with.