Adobe reckons it'll complete $20B Figma mega deal by year-end

Ups financial forecasts on back of 'healthy' Q1, as more and more of world goes digital

Not everything is going its way, what with the proposed purchase of Figma held up by regulatory hurdles, yet Adobe is bucking the trend across much of tech by upping its financial targets for this year.

The maker of software and services for creative types and marketing departments last night outlined trading output in Q1 of its fiscal 2023 ended March 3, with group revenues up nine percent year-on-year to $4.66 billion.

It helps that Adobe has a near-monopoly of the software market for graphics professionals, with no one else nearly reaching the size and shape of that organization.

The Digital Media division also reported a 9 percent bounce, growing to $3.4 billion. This included an eight percent jump in Creative Cloud to $2.76 billion and a 13 percent surge in Document Cloud turnover to $634 million.

Dan Durn, CFO, said: “Q1 highlights include strong growth in top-of-funnel traffic”, and new user sign-ups “across customer segments and geographies.”

As for Document Cloud, the never-ending demand for PDFs opened in the Acrobat Chrome extension and new integrations that make Acrobat Reader in Microsoft Edge were among the hotspots, the CFO said.

Digital Experience was up 11 percent to $1.18 billion, with Adobe noting “high retention rates.” It said customers are turning to “digital channels while increasing the productivity of their investments in customer experience and marketing.”

Operating profit was up marginally to $1.586 billion versus $1.58 billion in its Q1 a year earlier.

Durn said that “in light of the strong start to the year and momentum in our business, factoring in the macroeconomic environment” in its up Q2 financial objectives and those for the year too. It is now expecting annualized recurring revenue from Digital Media to be $1.7 billion, up from $1.65 in December.

Adobe is trying to buy Figma for $20 billion but the sale in being delayed by competition regulators that are worried about the implications for users. The US Justice Department is planning to block the sale, and authorities in the EU and UK are also taking a keener interest.

CEO Shantanu Narayen said of the purchase on last night’s earnings call: “We remain excited about the opportunity to advance product design, accelerate collaborative creativity on the web, and redefine the future of creativity and productivity. The potential combination continues to be well received by customers, industry analysts and partners.

“In addition, we are preparing for integration as we work through the regulatory process. From the outset, we have been well prepared for all potential scenarios while realistic about the regulatory environment.

“We have completed the discovery phase of the US DOJ's second request and are prepared for next steps, whether that is an approval or a challenge. Adobe remains confident in the facts underlying the case. And based on current process timing, we believe the transaction continues to be on track for a close by the end of 2023.” ®

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