|From: JakeStraw||6/19/2019 8:10:06 AM|
|Adobe Tops Q2 Earnings Forecasts as Cloud Focus Drives Digital Media Sales|
Adobe Systems shares were indicated sharply higher in pre-market trading Wednesday after the cloud computing and software group posted stronger-than-expected second quarter earnings and boosted its near-term profit outlook following a partnership agreement with Microsoft.
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|From: JakeStraw||9/20/2019 3:19:10 PM|
|Adobe Reports Record Revenue|
Q3 FY2019 Financial Highlights
Adobe achieved record quarterly revenue of $2.83 billion in its third quarter of fiscal year 2019, which represents 24 percent year-over-year growth. Diluted earnings per share was $1.61 on a GAAP-basis, and $2.05 on a non-GAAP basis.
Digital Media segment revenue was $1.96 billion, which represents 22 percent year-over-year growth. Creative revenue grew to $1.65 billion and Document Cloud achieved revenue of $307 million. Digital Media Annualized Recurring Revenue (“ARR”) grew to $7.86 billion exiting the quarter, a quarter-over-quarter increase of $386 million. Creative ARR grew to $6.87 billion, and Document Cloud ARR grew to $993 million.
Digital Experience segment revenue was $821 million, representing 34 percent year-over-year growth.
GAAP operating income in the third quarter was $854 million, and non-GAAP operating income was $1.15 billion. GAAP net income was $793 million, and non-GAAP net income was $1.01 billion.
Cash flow from operations was $922 million.
Remaining Performance Obligation was $8.77 billion.
Adobe repurchased approximately 2.6 million shares during the quarter.
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|From: Glenn Petersen||9/16/2022 4:11:14 AM|
|Adobe shares plunge on deal to acquire design platform Figma for $20 billion|
Published Thu, Sep 15 20228:12 AM EDT
Updated Moments Ago
Annie Palmer @annierpalmer
Adobe announced Thursday that it will acquire design software firm Figma in a deal worth about $20 billion in cash and stock. Shares of Adobe sank 17%, their biggest plunge since 2010.
- Adobe said Thursday it will acquire design software firm Figma in a deal worth about $20 billion in cash and stock.
- The company also reported earnings for its fiscal third quarter.
- Adobe shares had their worst day since 2010.
Figma, founded in 2012, creates cloud-based design software that allows teams to collaborate in real time. It competes head-to-head with Adobe's XD program.
The company was valued at $10 billion in its last funding round in 2021.
Figma, whose backers include the likes of Index Ventures, Greylock Partners and Kleiner Perkins, is expected to generate more than $400 million in annual recurring revenue this year, sources familiar with the company's financials previously told CNBC. Adobe confirmed Figma's ARR will surpass $400 million exiting 2022.
That means Adobe is paying in the neighborhood of 50 times revenue at a time when sales multiples for cloud software are contracting dramatically from their record highs reached last year. For the top cloud companies in the BVP Nasdaq Emerging Cloud Index, forward multiples have fallen to just over 9 times revenue from about 25 in February 2021.
Adobe said it will integrate some of the features from its other products, such as illustration, photography and video technology, into Figma's platform. Adobe sells a range of software services for photo and video professionals, like Photoshop, Illustrator, Premiere Pro and more.
"Adobe's greatness has been rooted in our ability to create new categories and deliver cutting-edge technologies through organic innovation and inorganic acquisitions," said Adobe CEO Shantanu Narayen. "The combination of Adobe and Figma is transformational and will accelerate our vision for collaborative creativity."
Once the deal closes, Figma co-founder and CEO Dylan Field will continue to run the company. He'll report to David Wadhwani, president of Adobe's digital media business.
Adobe also announced fiscal third-quarter results. It reported earnings of $3.40 per share, adjusted, topping Refinitiv estimates of $3.33 per share. It posted $4.43 billion in revenue, which matched analyst expectations of $4.43 billion.
The company issued mixed guidance for the fiscal fourth quarter. Adobe said revenue in the quarter will be $4.52 billion, compared with consensus estimates of $4.6 billion, according to StreetAccount. It expects to report earnings of $3.50 per share, adjusted, above a StreetAccount forecast of $3.47 per share.
Correction: This article has been updated to correct Adobe's third-quarter results.
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|To: Glenn Petersen who wrote (3104)||9/19/2022 7:15:10 AM|
|From: Glenn Petersen|
|The Adobe-Figma deal is historic for tech startups — if it goes through |
Hello, and welcome to Pipeline. I’m Biz Carson, and I’m devastated after I lost my 149-day Wordle streak to “parer” yesterday. At least I wasn’t alone.
This week in the startup world: Adobe and Figma’s historic acquisition, the silence around Launch House and founders’ favorite VC firms.
Adobe’s $20 billion acquisition of Figma is historic — if it happens Adobe’s acquisition of Figma is one for the record books. It’s the largest acquisition of a private tech startup at the time it was announced (Facebook’s WhatsApp acquisition went from $19 billion to $21.8 billion by closing, if you want an asterisk). Its 50x ARR multiple is another record in recent history for a startup at scale. For the investors, some of its earliest backers might be returning anywhere from 30x to 90x, per The Information’s calculations. Figma’s co-founders, Dylan Field and Evan Wallace, will both be billionaires based on the size of their stakes.
That’s all incredible — if the deal actually goes through.
A deal of this size is almost certain to come under regulatory scrutiny. Admittedly, my first reaction when I saw the coupling was not sticker shock but “Wait, can they even do that?”
Figma is well aware of the risk of antitrust scrutiny, but it believes the deal will be better for consumers in the long run. “We wouldn't have gone through this if we didn't think it was better for the customer,” Figma’s CEO Field told my co-worker Lizzy Lawrence.
- Antitrust regulators are certainly zoomed in on Big Tech right now and are closely scrutinizing transactions. Hindsight is 20/20, but a lot of regulators now regret letting the Facebook-WhatsApp deal happen, said Henry Su, a partner at the Bradley law firm who has worked in Silicon Valley and at the FTC. “People will be trying not to make the same mistake,” he told me.
- Take the FTC’s recent lawsuit against Meta for its acquisition of VR fitness app Within. Meta and Within aren’t seen as obvious rivals given that Meta’s core Facebook business is all about ads, not VR fitness, yet the government still sued to block the deal in July, saying it was choosing to buy market position to make itself dominant in VR. “The distance between Within and Meta is further. There’s a lot more predictions you have to do,” Su said. “Here, there’s no question that Figma is competing with Adobe.”
- The fact that they are direct competitors is going to worry regulators that this is a “killer acquisition” where the acquisition is intended to snuff out the competition — even if it is pledging to keep Figma alive as its own autonomous product. “It’s not simply, ‘Is there going to be a Figma after this?’” Su said. “It’s the killing of the competitive threat that Figma poses to Adobe.”
- The other worry is whether this could ultimately harm consumers by taking away choices. Figma’s own webpage directly comparing the two is a piece of evidence the government could use to show that the deal is taking away consumer choice when both are owned by the same company, Su said. There are other alternatives, like Sketch, but it’s much more limited in its use cases (for example, Sketch is Mac-only). If the deal hadn’t crossed regulators’ radar by now, the hordes of upset Figma users that are tagging the FTC and DOJ directly on Twitter to ask for an investigation will assuredly raise a red flag about how consumers feel about the deal and if the government feels it needs to step in to protect them.
Antitrust Debbie Downers aside, it’s a huge win for many in the startup community, and the LPs that stand to benefit from it. VCs are already hearing from endowments about the scholarships they’re going to be able to fund.
- “We certainly believe it’s going to happen,” Kleiner Perkins partner and Figma board member Mamoon Hamid told me when I asked about antitrust scrutiny. “We expect that process to happen and at the end of it to get approval for it.”
- The argument for combining is that Figma will be able to more directly incorporate Adobe’s capabilities and potentially address new customer segments that it hadn’t targeted before. And certainly at $20 billion, Adobe is paying full price. “There was one company that accelerated our aspirations and ambitions, and that’s Adobe,” Hamid said. “It was the one thing that really made sense.” Field confirmed that Adobe’s was the only acquisition offer Figma had ever explored.
- Adobe said in a statement to Protocol that the combination will “greatly benefit consumers” and that it expects the transaction to close in 2023 subject to approvals.
- There’s protection as well: If Adobe and Figma are blocked legally from doing the deal over antitrust concerns, the merger agreement shows that Adobe will have to pay Figma a $1 billion breakup fee in cash.
- Index Ventures is Figma’s largest outside shareholder and did its seed round in 2013. Sequoia and Andreessen Horowitz will also benefit. Greylock is another big winner: It was an investor in Figma, and its former venture partner, David Wadhwani, will be Field’s new boss at Adobe.
- For Kleiner Perkins’ Hamid, who has been overseeing the generational transition at the firm, it’s a big win and validation five years in. “It’s a top five for Kleiner Perkins in our history, and we’re celebrating 50 years,” Hamid said. Field has his own ties to the firm: He was a much-fought-over KP fellow (and a Thiel Fellow) before he started Figma.
The acquisition could also open up an appetite for more deals, whether it’s Big Tech companies looking to bolster their businesses or startup founders now willing to partner instead of going it alone. “The big companies all have their wishlist of really exciting companies that are out there that are high-quality businesses in the private market,” Hamid said. “My sense is that it’s going to be a bit more of an active M&A season.” It’s also going to mean a lot of billable hours for every antitrust lawyer from Palo Alto to Washington.
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