Adobe sees robust earnings backed by cloud subscriptions growth (Part 4 of 5)
Adobe’s Marketing Cloud business continues to grow fast
In the prior part of this series, we discussed Adobe’s (ADBE) Digital Media segment. In this part, we’ll discuss another important segment of Adobe, the Digital Marketing segment, which contributes about 31% to overall Adobe’s revenues. This segment consists of two main sub-segments—Marketing Cloud and LiveCycle & Web Conferencing. The Marketing Cloud sub-segment contributes about 86% to the Digital Marketing segment’s revenues and is a fast-growing business. As the chart below shows, Adobe’s Marketing Cloud segment earned revenues of $283 million in Q2 2014 quarter, which was a 23% increase from the corresponding quarter last year.
The Marketing Cloud solution earns strong industry recognition
Adobe competes with Google (GOOGL) and IBM (IBM) in the Marketing Cloud business. During the conference call to announce its Q2 2014 earnings, Adobe’s management mentioned that it earned strong industry recognition in Q2. Management commented, “We were recognized as a leader in Forrester’s Web Analytics Wave report achieving the highest scores in all major categories evaluated, current offering, strategy, and market presence. In Gartner’s Multi-Channel Campaign Management Magic Quadrant, we achieved leadership positioning and the highest scores in completeness of vision, underscoring the progress we have made with the Neolane integration and the competitive advantage we have built with Adobe Marketing Cloud.”
Adobe’s Marketing Cloud continues to achieve strong bookings growth
Adobe is expecting that its Marketing Cloud business would be able to achieve a revenue growth rate of 20% for the whole of 2014. The company also expects 30% growth in terms of bookings. If Adobe continues to grow its Marketing Solutions business, it will benefit ETFs such as the Guggenheim S&P 500 Equal Weight Technology ETF (RYT) and Technology Select Sector SPDR Fund (XLK), which have high exposure to Adobe.
Adobe’s management mentioned, “In Digital Marketing, Adobe Marketing Cloud achieved strong bookings in Q2 led by Adobe Experience Manager. Every enterprise is faced with the task of re-platforming their web infrastructure to deliver more personalized, relevant content to their customers and provide a first class mobile experience. Given our number one position in the web experience management and analytics categories and integration with our Campaign, Social and Target solutions, we have the leading offering in the market.”
Browse this series on Market Realist:
- Part 1 - Adobe sees robust earnings backed by cloud subscriptions growth
- Part 2 - Why Adobe expects its Q3 revenues to be the low point of 2014
- Part 3 - Adobe’s flagship product, Photoshop, attracts more cloud customers
- Information Technology
- Digital Marketing
- Adobe Marketing Cloud