How Much Revenue Can Creative Cloud Add To Adobe’s Topline By 2018?

+20.34%
Upside
505
Market
607
Trefis
ADBE: Adobe logo
ADBE
Adobe

Adobe (NASDAQ:ADBE) successfully transformed its business model from being a perpetual licensing vendor to a cloud-based Software-as-a-Service (SaaS) subscription service over the past few years. As this transformation gained momentum, the number of subscribers for its Creative Cloud (CC) grew, while Average Revenue Per Subscriber (ARPS) declined due to the introduction of the de-itemized suite. Recently, the company has launched new products such as Lightroom for Apple TV and Adobe Spark for visual stories that complement and supplement its Creative Cloud (CC) division. Due to these launches, Adobe’s total addressable market (TAM) for CC has gone up to 25 million creative content producers. As a result, we expect that the company can double its subscriber base over the next three years. This would result in 75% increase in CC topline for the company. Our estimates for 2018 revenues are as follows:

Adobe Cloud

 

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Adobe