Adobe Posts Record Revenue Figures of $11 Billion for 2019, Subscription Model to Thank for Doubling Profits in Just Three Years

Adobe Posts Record Revenue Figures of $11 Billion for 2019, Subscription Model to Thank for Doubling Profits in Just Three Years

Good news for Adobe: the company’s Q4 results show it surpassed a massive $11 billion in revenue for 2019. It’s the first time ever that Adobe has surpassed such a figure and shows an impressive 24% growth from the previous year.

A fundamental part of such profit is the transition to a subscription model that the company rolled out. Usage of the Adobe Creative Suite, now known as Creative Cloud, changed to a monthly fee, and is a big reason the company’s turnover continues to grow. For comparison, their 2016 number was $5.85 billion, meaning it has almost doubled in just three years.

Adobe was just short of hitting revenue of $3 billion in the three-month period of Q4 this year. Adobe president and CEO Shantanu Narayen said in a press release:

Adobe’s phenomenal performance in Q4 capped a record fiscal 2019 with revenue exceeding $11 billion. Adobe’s vision, category leadership, continuous product innovation, and large and loyal customer base position us well for 2020 and beyond.

Executive Vice President and CFO John Murphy added:

[Adobe is] bullish about our opportunities and our ability to continue to deliver strong top- and bottom-line growth.

Looks like they won’t be reverting from their subscription model any time soon.

Lead image by Mikaela Shannon on Unsplash.

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70 Comments

Deleted Account's picture

Adobe... extortionists, in my opinion.

Completely agree.

Reginald Walton's picture

How is it extortion when there is competition available? It's not illegal to make profits (look at Apple, MS and others). So that means Apple, Microsoft, Verizon, AT&T, Sony and every other company making profits are extortionists. I get it that people for some reason don't like Adobe's subscription model, but the phone companies and Internet providers and electricity providers all have subscription models. Even Capture One has a subscription model available.

Deleted Account's picture

Personal opinion. What if all car companies decided we could only lease their cars? No option to buy.

Phones are a service provided. Computer programs are stand alone products... so I've always understood them to be.

Reginald Walton's picture

But Adobe is not the ONLY option out there. Personal opinion: Go use someone who's model you agree with. If you keep giving Adobe your money b/c you think they are the only option, do you think they are going to change? What if everyone thought they didn't have any other option other than Adobe? Those profits would be even higher. Stop depending on Adobe if you don't like what they're doing.

Deleted Account's picture

Did I say I subscribed to Adobe? I missed that...

ALSO What if motor companies decided that you are only allowed to have your vehicle repaired through them. What if you get fined for fixing your own vehicle or taking it to a third party mechanic? That's exactly what American motor companies want and have been fighting for, for a while now. The right to repair movement fights this kind of corrupt corporate mentality every single day.

Deleted Account's picture

Exactly. Void the warranty? Bite me! It's like I told the giant sales manager who tried to scare me into buying the car. Coercion will not persuade me to buy your car... blocked his phone number and purchased the same car from a competitor.

If I have to void a lame warranty... (shrug) ok. They're largely empty promises for many products. About as useful as undercoating. 😆

BAHA! pretty much that same situation happened with my room mate when he bought his Nissan 370Z. He was going to get it from a local dealership but they were giving him the run around the whole time so he literally said F/U walked out and drove to Texas from Oklahoma to buy his car lol. That sales person lost out on a $35,000 dollar sale because of his shenanigans. Sales people tactics work about as well as internet ads. Which is repels me from buying anything. I also work with sales people and I have become privy to a lot of the tactics muahahahaha.

Deleted Account's picture

For some odd reason, during my aviation safety masters degree curriculum (early 90s)... a professor showed a film about sales training in the auto industry. Holy bleep, bleep, bleep... I will never feel bad about the day a dealership wouldn't return my keys after a trade-in check (long before cell phone days)... I asked to use the phone at reception. Nice lady offered to dial. I looked at the three... THREE... salesmen towering over me, smiled and said quite calmly, the Kansas City Police Department, please. I need to report a stolen car.

The guy pretty much threw my keys at me. Best day ever... in the annals of car buying.

Do not screw with a single female, alone, and the USAF as my employer.

JESUS. I forgot shady dealerships would hold your car hostage like that. That's illegal right? And thanks for your service in the Air Force!!! Both of my parents are USAF vets! I loved going on base as kid! Fun memories!

David Love's picture

Stop comparing Adobe to home bills. They are a feature promoted company that does the absolute minimal to push their products because they have us locked into a subscription. Before subscriptions they actually had to release major improvements and stable software or nobody would upgrade. Now they don't care. It's a horrible unfair one sided business.

Reginald Walton's picture

How are you "locked in"? They don't force you to use their product. It's one thing if there was no alternatives out there, but there are. Upgrades costs money, just like upkeep on any other thing does. What if they sold you a product out right and provided no new camera support, then you'd be complaining b/c your software doesn't support the latest gear. Developers don't work for free, so you can't just buy a product and then expect to get updates without someone doing the work to get that update out to you. There are other programs available for you to purchase out right and not be "extorted" by Adobe. If they were to go out of business, where would that leave you?

David T's picture

They have like 80% market share in graphics, that's pretty much a monopoly. So yes, that locks in most professionals.

And we wouldn't be complaining if they actually did upkeep on their software instead of letting it die while pushing some cloud crap nobody asked for. They doubled the cost, we expect double the product.

Reginald Walton's picture

Does not lock in most professionals. Most "professionals" I know use CP1 for photo editing. But even if they do have 80% market share, there are still alternatives. If you're locked into Adobe's system, that's your fault. As I mentioned in another post, if Adobe goes out of business tomorrow, what will dhat do to most professionals? If you just keep complaining about their product and continually giving them your money, then what is their incentive to change? IJS

David T's picture

Their incentive to change would be if there were actual competition. But there isn't so they just keep raising the price without bettering the product.

Also, I use both products. Don't blame customers for Adobes greed.

Ryan Davis's picture

If they have an 80% market share, and there's a network externality (which there is) then it isn't the case that there are other alternatives, or rather, it isn't the case that there are perfect substitutes, or even near substitutes. This gives Adobe monopoly pricing power, which is why they can screw their customers and get away with it, for the moment. The customers are annoyed, but have to lump it. No one likes this feeling. If they were peddling glycerine or some other commodity, this wouldn't be an issue, but they aren't.

If you are a graphic design professional, can you really switch to, say Affinity? Are you going to deliver that to clients? Of course not. Adobe knows this- their product is too big to abandon. Microsoft was in a similar situation back in the day, with their crap OS and ridiculous mandatory-voluntary "upgrades."

But Adobe should take note of Microsoft's case. Most companies in this situation get simultaneously lazy and greedy. So they pile on the costs of sticking with the program, while neglecting to add benefits to sticking with the program. Eventually the costs outweigh the benefits of the network externality, and people start to jump ship. This undermines the network externality, which accelerates the ship jumping, which further undermines the network externality. When the end comes, it's total and quick. Remember how fast Myspace went down?

People use Adobe because they have to. Not because they want to. Rest assured, one day Adobe will end up impaled on a negative feedback spike.

Reginald Walton's picture

Umm, OK. Well if you don't think there is actual competition, then just keep giving them your money for their sub-par service. Maybe that's why they're making record profits, people don't know about the alternatives and just stick with something they don't like. Or could it be that people that pay for the service, actually like it?

Deleted Account's picture

What's your stake in your vociferous position, Reginald? Just curious.

Reginald Walton's picture

I have no stake. I use CP1 and LR b/c I can afford the $10 a month for LR and PS. What's your vociferous position Cathleen? Just curious as well. Seems like people want stuff for free or very cheap but don't realize there are employees and shareholders and the like. I get it, I'd like to pay as little as possible too, but $10 a month to me is very reasonable for what you get. People spend thousands of dollars on photo/video gear, but want free lifetime software support.

Deleted Account's picture

My view...
Your presentation sounds like the argument of a man who bought stock in and/or works for Adobe.

Reginald Walton's picture

Wrong on both of your views I'm actually transitioning from LR to CP1, but still use them both for now. I'm just one to understand and realize that you don't get anything free in this world and that other people's work is valuable. And that consumers will set the price for things we want. If we don't like the product, we will revolt and find something better. And if I don't like a company's product or tactics, I don't complain about them while still giving them my money. But I do wish I had some Adobe stock, especially after this profits announcement.

Deleted Account's picture

What if your car company decided all cars must be leased... no option to buy? Or... your Boeing 737 could only be as safe in the air as the package you could afford to outfit it with... yikes.

A phone company provides a service. A computer program, as I've grown up with them, is a stand alone product.

But I get it... as the world of commerce evolves, consumers are groomed to believe "upgrades" are essential. But hey... I don't stand in line every six months for a new phone or the latest camera model. Personal preferences.

Reginald Walton's picture

You may not stand in line every six months for a new phone, but you pay a phone bill every month and probably an Internet bill as well, so what's the difference? There are alternatives out there.

Deleted Account's picture

Anything else, Reginald?

Reginald Walton's picture

Do you have anything else Cathleen?

David T's picture

My ISP has to provide 99,8% uptime, I get money back if they don't. Adobe does nothing of that kind.

Deleted Account's picture

Wow. That's a nice deal, David. Who's your ISP?

David T's picture

Unitymedia Business (Germany).

Yes. Yes they are extortionist. Apple, Microsoft, Verizon, AT&T, are some of the worst offenders. How modern capitalism works is: Extort and exploit in the name of profits. If company wants to do something that will make company profits and company knows it's wrong and there isn't a law against it, do it any way. If company want to do something to make profits but it's illegal DO IT ANYWAY, because screw having any sort of moral compass. Almost every single major Corporation existing to day follows this modern form of capitalism.

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