Adobe to acquire Figmaĭuring the last earnings report on September 15, Adobe dropped the news that they were purchasing Figma for $20 billion, plus an additional $2 billion for management retention as the CEO stays on. The stock just started creeping over the last two days, September 27 and 28. We’re going to dig a little deeper into Adobe’s logic behind this move.
Many analysts have been coming forward with slashes to the price target for Adobe since the acquisition announcement, which has added to the stock’s decline. This one move erased $9 billion more from the market cap than the actual purchase price of Figma. This was the worst single-day drop for Adobe since September of 2010. The initial news crashed the Adobe stock immediately by about 17%, which erased about $29 billion of its market cap. As a result of this announcement, the stock has dropped significantly.Īdobe announced the acquisition of Figma on September 15, and the Adobe stock dropped 24% by the next day as the announcement was met with disappointment. Wall Street doesn’t like this move as the $20 billion figure roughly equates to 50 times Figma’s expected revenue (annual recurring revenue) for this year. The brand has been raked into the mud due to confusion among analysts, and their stock price has dropped accordingly. What’s happening with Adobe stock?ĭespite announcing record-breaking revenue for the quarter, Adobe has lost big in the stock market over the last two weeks. The company also offers email and further analytics options under this segment.Ī quick glance through the Adobe website shows all of the products offered under Adobe Creative Cloud, Adobe Document Cloud and Adobe Experience Cloud. Adobe Workfront for marketing workflow.Adobe Experience Platform for data insights.
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The Experience Cloud platform uses data, software and analytics tools that allow businesses to track the buyer’s journey. Regular customers don’t commonly know this product as it’s designed for enterprise use. The Digital Experience segment includes Experience Cloud, which is the tool that companies use for marketing commerce purposes. Creative Cloud contains popular applications like Photoshop, Illustrator and Premiere Pro to name a few. Document Cloud includes Adobe Acrobat and Adobe Sign services. This is includes money from related services, training and certain smaller business segments.ĭigital Media consists of the popular Creative Cloud and Document Cloud services.
However, Adobe still makes nine figures licensing apps. The product doesn’t bring in meaningful revenue because Adobe now operates on a subscription model instead of selling their software. Product - This sector brought in $126 million for the most recent quarter.Subscription - This section brought in $4.128 billion for the last quarter, which represented 93% of the company’s revenue.There are three revenue streams when you look over Adobe’s earnings report: For the third quarter of 2022, Adobe reported a record-setting revenue figure of $4.43 billion, marking 13% year-over-year growth. It’s estimated that more than 400 billion PDFs were viewed with Adobe products in the last year, and we can’t ignore how popular the company has become.
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