Adobe, the multinational computer software company, released its Q2 2021 earnings report last week and revealed $3.84 billion in revenue — a 23% growth year-over-year.
“Adobe had an outstanding second quarter as Creative Cloud, Document Cloud and Experience Cloud continue to transform work, learn and play in a digital-first world,” said Shantanu Narayen, president and CEO of Adobe, in a press release.
Adobe is well known for identifying the need for a seamless digital workflow and used the momentum of remote work to further improve its digital offerings.
Learn how the pioneer of cloud-based subscription offerings was able to acquire new customers and develop customer loyalty to hit tremendous Q2 goals.
The Pioneer of Cloud-Based Subscriptions
Adobe’s mission is to change the world through digital experiences, providing creative solutions and empowerment. The company’s diverse selection of digital tools serves a large audience – from students, to entrepreneurs, to large corporations. Narayen’s leadership transformed Adobe into the pioneer of a cloud-based subscription model.
Adobe Creative Cloud launched in 2007 offering users a set of software applications for graphic design, video editing, and web development. Prices for these services depend on whether you are a student, a business owner, or an individual looking to take advantage of Adobe’s creative tools.
Adobe has three major business segments:
- Adobe Creative Cloud (SaaS) — Includes tools to discover and express creativity through photography, design, video, animation, and web and mobile user experiences.
- Adobe Document Cloud — Includes tools meant for people and businesses to create, edit, share, scan, and sign digital documents.
- Adobe Experience Cloud — Includes tools for content management, personalization, data analytics, and commerce.
All of Adobe’s software provide its customers with the ability to personalize and perfect their digital and brand marketing efforts. Any graphic can be printed through Adobe Acrobat Reader, permitting businesses to use those assets for package creation, branding, books, animations, and more. With Adobe’s software, businesses can take their creative marketing strategies to new heights and develop stronger relationships with customers.
Investing in Customer Experience Results in Successful Second Quarter
Adobe’s Q2 success was due to enhancing the customer experience. The company’s Photoshop, Lightroom, and Illustrator services received updates that provided customers with improved creation and collaboration capabilities alongside higher speed and performance.
Other software renovations include improving the process for assembling, styling, and sculpting within Adobe’s 3D and Augmented Reality subscription, Substance.
Additionally, Adobe offers a large library of remote training options, such as webinars, on-demand videos and other community events. In Q2, the number of customers utilizing these resources increased, resulting in higher customer engagement and retention.
Likewise, Adobe launched new and exciting marketing campaigns to increase customer acquisitions for Photoshop and Premiere, a video editing software. The company also saw increased acquisition for mobile offerings, such as Lightroom Mobile and Photoshop Express, according to Adobe’s Q2 report.
Adobe’s Q2 revenue can be divided in 4 segments: Digital Media ($2.79 billion), Digital Media ARR ($518 million), Digital Experience ($938 million), and Digital Experience Subscription ($817 million).
Based on the company’s growth trajectory, Adobe’s Q3 target revenue is approximately $3.88 billion. In 2020 alone, Adobe reached $12.87 billion — a 15% year-over-year growth rate. Narayen is hopeful that Adobe will continue to improve its digital presence and make nearly $15.5 billion this year in total revenue.
Pandemic Boost for E-Commerce Spending
Digitally telling your story through Photoshop or Spark is a trend that Narayen believed would continue throughout the pandemic.
Covid-19 state mandates led people to increase their online consumption habits. Narayen and his team recognized that the pandemic provided one surefire way to interact with customers — virtually. Adobe’s digital tools allowed for customers to stay creative in the comfort of their own home.
Adobe wasn’t the only company providing something amidst stay-at-home orders; the entire e-commerce industry saw a boost. E-commerce spending saw an additional $183 billion, according to Adobe’s Digital Economy Index. From January 2020 to February 2021, e-commerce spending reached $844 billion. E-commerce spending is projected to reach $1 trillion in the United States by 2022, the report goes on to state.
Technology is constantly evolving and is seen in every part of business, especially now as hybrid work spaces are more popular. SaaS companies have the power to connect with customers virtually and Adobe especially is seizing every opportunity.
Key Takeaways:
- Adobe reported $3.84 billion in revenue in Q2 2021 — a 23% growth year-over-year.
- The company increased its customer acquisition and retention efforts through software updates, like creation and collaboration capabilities, and marketing campaigns.
- Adobe’s Q3 target revenue is $3.88 billion.
- E-commerce spending in 2020 reached $844 billion and is projected to reach $1 trillion in the U.S. alone.
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