Adobe Inc. (NASDAQ:ADBE)Adobe excellent run that has seen the stock power to record highs after a 30% plus rally looks set to continue heading into year-end. The tweaking of the core business has positioned the company as a software-as-a-service company from which it continues to register robust growth.
Subscription Growth
Subscription growth on key products such as Photoshop software, which goes for $20 a month, and the Creative Cloud applications that go for $52.99 have all but continued to safeguard its revenue base. Likewise, the company has continued to do well amid the pandemic, with revenues in the first nine months of the year increasing by 15% to $9.4 billion.
The fact that the company’s revenue is now stable and more predictable thanks to subscriptions continues to entice investors eyeing opportunities on cloud computing. Recurring revenue, which to date has risen to $8.7 billion, now accounts for 92% of total sales.
A robust pipeline of products suited for the screen-centric world and the working-from-home trend all but continues to affirm the company’s long-term prospects. The stock rallying by more than 30% since the start of the year affirms it is one of the top stay-at-home stocks.
Workfront Acquisition
In addition, Adobe has resorted to acquisitions to strengthen its prospects in work management further. The acquisition of work management platform Workfront with more than 3,000 customers and one million users underscores its ambitions in spearheading the digital transformation.
Workfront should enhance Adobe's ambitions in enhancing efficiency, collaboration, and productivity gains among marketing teams. Both companies are poised to establish strong product synergies and a growing customer base made of the likes of T-Mobile, Nordstrom, and Under Armour.
The $1.5 billion acquisition should also enhance Adobe’s Experience cloud offerings while also strengthening the overall offerings. In addition, Adobe should be able to capitalize on the growing demand for workflow management software in the data-driven global economy.
Workfront acquisition is in line with Adobe's long term plan of bolstering online marketing capabilities expected to drive its momentum among customers.