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Adobe confirms UK looking into its $20b Figma deal, EU probe 'expected'
Options? Customers have heard of them. Software giant reports record $17b+ revs, with biggest growth in ... PDFs?
Adobe's planned $20b buy of Figma – one of the largest takeovers of a private software dev on record – is being probed globally, "including by the Competition and Markets Authority in the UK," the software maker has confirmed, saying it expects "the transaction will also be reviewed in the EU."
The agreement is still on track to close next year, the company reassured investors on an earnings call for its Q4 and full year ended December 2, in which it mentioned the ongoing investigation by the US Department of Justice.
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A vector design tool where users can collaboratively edit projects, Figma has an estimated 4 million users, drawn in by a freemium tier that allows them to share files without paying for additional licensing costs as well as its relatively lightweight interface.
Adobe has a competing vector design tool called "XD" that is currently used by more than 9,900 companies. Loyal Figma fans have voiced concerns that the tool may not stay freemium, although Adobe's chief product officer Scott Bellsky told Bloomberg the company was commited to a free tier post-acquisition.
FOSS alternatives for the tool include Penpot (currently still in beta but it has an active dev community and the intriguing selling point of having SVG as its native format); Plasmic, which supports importing designs from Figma and has a paid option; and native Linux UX app Akira UX, still in early development.
"We continue to feel positive about the facts underlying the transaction and expect to receive approval to close the transaction in 2023," Adobe's Digital Media president David Wadhwani said of the Figma buy on the call.
The company earlier this month confirmed it would sell AI-generated images on its stock image platform, despite concerns over potential copyright issues. Wadhwani also talked up the "powerful new AI capabilities in Photoshop" on the call, with the popular image editing tool now including a Photo Restoration neural filter that instantly fixes damaged photos. Premiere Pro and Acrobat also now integrate Adobe's AI engine, Sensei.
The bottom line looked pretty good for the company after yet another pandemic year when a lot of business and certainly almost all creative digital collaboration was done online. It reported revenue of $17.61 billion in fiscal year 2022, a 12 percent uptick year-over-year from $15.8 billion last year and operating income of $6.098 billion up from $5.802 billion in 2021.
Meanwhile, have a guess what the biggest growth segment in the business was. Creative Cloud, I hear you say? Nope it's Document Cloud, the software behemoth's service for converting paper documents to a digital format and storing them in the cloud, integrated with Adobe tools to fill and sign forms electronically. As the world and its dog continue to fill and sign their bank deposit forms, school permission slips and sales contracts online, the service rose 16 percent in the quarter when compared with Q4 last year, and 21 percent for the full year to bring in $2.38 billion.
The Digital Media segment brought in $12.84 billion for the year, up 11 percent. Creative Cloud revenue – the bit that houses Photoshop, Illustrator, Premiere Pro, After Effects, InDesign, Acrobat Pro, Lightroom etc – grew to $10.46 billion, representing 10 percent year-over-year growth.
The Digital Experience segment revenue was $4.42 billion. That's the segment that houses Adobe Commerce (previously known as Magento). The e-commerce solution – and its open source sister Magento Open Source, much loved by small businesses on a budget who don't seem that keen on paying for ongoing maintenance or patching (not a great look when criminals nick your customers' payment details, funnily enough) – reported several serious bugs this year. These included a critical vulnerability in Magento (CVE-2022-35698) patched in October, dubbed by The Register as a "perfect 10/10" that could allow attackers to fully compromise e-commerce platforms. The flaw was spotted by bug bounty hunter Blaklis.
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Adobe was also forced to apologize for repeated outages of its Creative Cloud video collaboration service earlier this year after new acquistion Frame.io had such lengthy downtime that a user branded it an "absolutely unusable product for video professionals." The service's co-founder, Emery Wells, chalked it up to the increased "scale" that the product needed to handle after Adobe bought it, which he said "sharply increased over the past 12 months."
The creative software juggernaut gave upbeat guidance for next year, and expects $19.1 billion to $19.3 billion for fiscal 2023.
They "do not reflect the planned acquisition of Figma" as the regulators comb through the transaction ahead of the anticipated close in 2023. ®