Adobe reports strong revenue growth as users move to subscriptions

The Q2 earnings for Adobe came in strong, with revenue rising 16 percent due to stronger subscription sales. Net income came in at $88.5 million, up more than 15 percent versus the same quarter last year.

Adobe has been shifting its customers from buying software packages to its Creative Cloud (CC) subscription service. CC subscriptions mean a continuous flow of revenue for the company, while allowing users to test out software applications that they might otherwise not buy.

“Adobe’s first-half upside was driven by accelerated adoption of Creative Cloud and Adobe Marketing Cloud”, said Shantanu Narayen, president and chief executive officer, Adobe. “We’re excited about our upcoming product pipeline and expect a strong second half of the year.”

Subscription revenue rose to $476.7 million, up nearly 88 percent from a year ago. Not surprisingly, product sale were down sharply as users migrated to subscriptions.

Recently Adobe announced that users of Adobe Digital Publishing Suite would need to transition to CC as the company said support would be dropped for InDesign CS5 and CS5.5. Owners of the software can continue to use the software, of course, but will not be able to create folios.

“When DPS v32 ships, Adobe will no longer deliver the Folio Producer tools installer and the Folio Builder panel installer that work with InDesign CS5 and CS5.5,” Adobe informed users. “If you are currently running InDesign CS5 or CS5.5 you will not be able to create folios or upload articles to the Folio Producer Service using the Folio Builder panel as it will no longer function in these older versions of InDesign.”

Adobe-q2-2014

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