Why did Wall Street prefer Adobe’s quarter to Salesforce’s? • TechCrunch
When you look at Adobe and Salesforce, while there are many differences, they compete directly in some areas. And looking at their overall performance, the numbers weren’t all that different in their latest earnings reports:
- Revenue of $4.53 billion, which was in line with analysts’ expectations, up 10%, which translates to 14% in constant currency if the dollar were not so strong that it was driving down overseas earnings figures.
- Revenue of $7.8 billion, versus $7.2 billion expected by the analyst class. That was up 14%, or 19% in constant currency.
On the face of it, it’s pretty darn similar, but Salesforce’s stock price has come under fire since it revealed its results. On Friday, the day after Adobe announced its latest results, its stock closed up nearly 3%.
To be fair, Salesforce broke the explosive news that Bret Taylor was leaving at the same event, which may have spooked some investors, but Adobe’s 10% figure isn’t exactly something to shout from the rooftops. .
In fact, it’s dangerously close to a low-single-digit growth slump, a place no public company wants to live in (except maybe IBM). But Adobe has a few advantages that Salesforce doesn’t. The first is that she is diversifying her income significantly, which should help her as we enter the new year amid continued economic turbulence.
While the vast majority of revenue still comes from the creative side of the house, as Adobe celebrates its 40th anniversary, we’re starting to see the long-term bets CEO Shantanu Narayen has made on marketing are starting to pay off. This includes the acquisition of Marketo for $4.75 billion and the acquisition of Magento for $1.6 billion, both of which took place in 2018.
The company also announced that Experience Cloud, which includes marketing tools and analytics products, hit $1 billion for the first time in the quarter — $1.15 billion, to be precise.
Brent Leary, founder and principal analyst at CRM Essentials, which closely monitors the marketing and sales markets, said this was an important step for Adobe.
“I think most people still think of Photoshop, Illustrator, and all the rest of the Creative Cloud apps, but Experience Cloud hits this milestone illustrates the importance of using these tools to create and manage customer experiences to establish deep and lasting relationships with them.
“Experience Cloud is stepping out of Creative Cloud’s shadow a bit,” Leary told TechCrunch.
And speaking of diversification, investors may not have liked Figma’s $20 billion price tag when it was announced, but they seem to be settling into the idea of it being part of the company. Of course, the deal still has to remove significant regulatory hurdles in the United States and abroad before it becomes a reality.
Still, even without that, let’s face it: Figma’s revenue isn’t going to move the needle much in the near term, and Adobe is doing pretty well. But let’s take a closer look at these two reports and see if they are as similar as they seem at first glance and try to analyze why Adobe gets more investor-friendly treatment.