Adobe Leadership in Creativity, Digital Documents and Customer Experience Management Categories Drives Next Era of Growth

Company Raises Q4 FY2019 Digital Media Net New ARR Target

Adobe will host a financial analyst meeting with investors and financial analysts at its Adobe MAX conference, where Adobe’s executive team will unveil the company’s strategy to expand its leadership in the creative, digital documents and customer experience management categories to drive sustainable, long-term top and bottom line growth in 2020 and beyond. As part of its presentation, Adobe will provide data showing that its total addressable market is expected to reach approximately $128 billion by 2022.

“Our strategy to unleash creativity, accelerate document productivity and power digital businesses is driving our growth and represents a $128 billion opportunity in 2022”

“Our strategy to unleash creativity, accelerate document productivity and power digital businesses is driving our growth and represents a $128 billion opportunity in 2022,” said Shantanu Narayen, president and CEO, Adobe. “Our expanding universe of customers, strong global brand, market-leading products and continued innovation position us for a stellar 2020.”

Creative Cloud: Unleashing Creativity

At its core, Adobe’s Creative Cloud strategy is about unleashing creativity for all, which is driving an increase in Creative Cloud total addressable market for 2022 to approximately $31 billion across creative professionals, communicators and consumers. Creative Cloud’s growth will be driven by:

• Continuously releasing innovative new applications that accelerate productivity and collaboration for individuals, small businesses and enterprises across all surfaces;
• Expanding to new audiences, including consumers and communicators, with new products like Photoshop on iPad, Fresco and Photoshop Camera;
• Growing customer loyalty and retention by engaging its global creative community through live events like MAX as well as through its online properties, including Behance, which now boasts 18 million members; and
• Pushing category and technology boundaries by leveraging its Adobe Sensei AI and Machine Learning framework and embracing new emerging media types like 3D and augmented reality.

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Adobe Document Cloud: Accelerating Document Productivity

Adobe continues to benefit from the paper-to-digital transformation. With trillions of PDFs created every year and approximately two billion Adobe mobile and reader users, the total addressable market for Adobe Document Cloud is expected to grow to $13 billion by 2022. Adobe is accelerating document productivity with a Document Cloud strategy focused on:

• Delivering the best PDF viewing experience everywhere by revolutionizing the mobile and online reader experience;
• Expanding Acrobat document capabilities—including editing, collaborating, scanning and signing—to help accelerate business productivity;
• Making PDF frictionless for mobile and web by providing users with simple, one-click experiences to access Adobe’s powerful PDF tools online; and
• Unleashing the PDF ecosystem to embed services through a rich set of APIs, enabling a new model of delivery and monetization.

Adobe Experience Cloud: Powering Digital Businesses

With every business, government and educational institution going through its own digital transformation, Adobe’s Customer Experience Management (CXM) opportunity continues to grow. The total addressable market for Adobe Experience Cloud is expected to increase to $84 billion by 2022, driven by increased demand for data and insights, content and personalization, commerce, customer journey management and advertising.

As Adobe continues to power digital businesses across all sectors, its Digital Experience strategy is focused on:

• Building on established relationships with Chief Marketing Officers and Chief Digital Officers to drive CXM adoption across the enterprise;
• Becoming mission critical to the Chief Information Officer with the Adobe Experience Platform, a purpose-built platform to unite customer data in real time to power digital businesses;
• Extending its offering and go-to-market from B2C to B2B and B2E as all customers now expect the same high-quality experience from companies;
• Building scale in the mid-market segment through its acquisitions of Magento and Marketo; and
• Evangelizing Adobe’s own Data-Driven Operating Model (DDOM) as a transformation playbook for its customers.

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Adobe Raises Q4 Digital Media Net New ARR Target

Based on strong quarter-to-date performance, Adobe indicated it is raising its Q4 fiscal year 2019 Digital Media net new annualized recurring revenue (ARR) target to approximately $475 million, an increase of $25 million above its prior target. Adobe is also affirming it is on track to achieve Q4 revenue of $2.97 billion, and its Q4 earnings per share targets of approximately $1.68 on a GAAP-basis, and approximately $2.25 on a non-GAAP basis. The company indicated it expects to meet other financial metrics it targeted for the quarter.

Adobe Provides Preliminary FY2020 Financial Targets

At today’s financial analyst meeting, Adobe is providing preliminary growth targets for its fiscal year 2020, which are summarized in the table below.

Adobe expects to report its Q4 fiscal year 2019 financial results on Dec. 12, 2019. A reconciliation between GAAP and non-GAAP earnings per share targets is provided later in this press release.

Adobe to Webcast Financial Analyst Meeting

Adobe will webcast its meeting with financial analysts and investors in attendance at Adobe MAX beginning at 5 p.m. Eastern Time today. People can access the webcast and slides from this event from the Adobe Investor Relations. The live video webcast will last approximately three hours and will be archived on Adobe’s website for approximately 45 days. There will be no phone dial-in capability.

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