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Adobe Creative Cloud Subscriptions Hit 1.4 Million in Fiscal 2013

Company Will 'Continue to Evolve' Offerings to Attract Customers As Perpetual CS Licensing Winds Down

Despite controversy over its move to a subscription-based business model with the latest version of its creative toolset, Adobe said yesterday that subscriptions to its Creative Cloud offerings have continued to grow. The company had more than 1.4 million individual and team Creative Cloud subscribers as of November 29, the end of its fiscal year.
 
"Customer satisfaction [with Creative Cloud] is high based on our surveys," said Adobe President and CEO Shantanu Narayen during a conference call with investors. "In adddition to paid members, we currently have millions of customers in the pipeline who are trying out the service." 
 
That adds up to $768 million in annual recurring revenue from Creative Cloud, said Executive Vice President and CFO Mark Garrett, noting that subscriptions make "a more predictable revenue stream" for the company. Almost all of the subscriptions are annual plans, with only 4 percent of users opting to pay month by month (which is 50 percent more expensive). Adobe closed more than 1,000 Creative Cloud enterprise licensing contracts, which are generally three-year agreements, during the year, Garrett said.
 
Some users have been calling for Adobe to make some adjustments to the Creative Cloud license, and the company acknowledged that the offering will "continue to evolve," citing a package with photography apps Photoshop and Lightroom that was offered for just $9.99 a month beginning in September. "Uptake on this offer has been strong," Narayen said. He did not, however, go so far as to suggest that similar packages may be in the works on the video side. Per-user revenue dipped slightly in the quarter, officials said, owing in part to that Photoshop promotion, but overall "it continues to be more than what we got under the old perpetual model," Garrett said.
 
Adobe's income statement took a bit of a hit in 2013, with increases in subscription revenues not yet making up for a decline in revenue from perpetually licensed products. (Adobe obviously expects this situation to change as more subscribers come on board.) Net income for fiscal 2013 fell to $290 million (on revenue of $4.1 billion) from $833 million (on revenue of $4.4 billion) in the previous year.
 
And Adobe is looking at next year conservatively, too. It's projecting flat revenue for fiscal 2014, even as it expects Creative Cloud subscriptions to more than double to 3 million by the end of the year. Adobe is more optimistic about the longer term, targeting compound annual revenue growth of around 20 percent between fiscal 2014 and fiscal 2016.
 
Finally, Adobe said fiscal 2014 will be the last year it posts any "meaningful … perpetual revenue" from the Creative Suite, meaning if you really want any more seats of CS6, you should buy them sooner rather than later, since the company is closing the door on perpetual licenses.

10 Comments

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  • Player_L

    “Customer satisfaction [with Creative Cloud] is high based on our surveys”
    HAHAHAHAHAHAHA Really?? Who did you survey? The ones who bought it?

    By the way, could someone be so kind to tell me how many licenses of CS5 or CS6 were sold?
    I´d rather be funding an open source competitor.
    Kickstarter, I YOU NOT FUND THIS!!!!!!

    • Jeff

      As a CS6 Production Premium owner, I took one of their surveys which was emailed to me. It immediately asked for my impression of CC – once I gave it a poor rating the survey stopped and said I didn’t qualify to take it. Their surveys are pro CC that’s why their customer satisfaction is high based on their surveys. LOL. They don’t want to hear the truth from the customers. Need more proof – Adobe TV on youtube turned off their comments as too many were negative. Talk about living with your head in the clouds…Come back to earth and reality.

  • appleimmune

    That’s about 1.5 million too many supporting this horrible company and their monopolistic exploitation. They won’t ever see another penny of my hard earned money and I can’t wait until there’s real viable competition on scene, this company and its leadership can go to H**l as far as I’m concerned.

  • Jeff

    Customer Satisfaction? Adobe better visit their own forums to see all the complaints from CC subscribers. Adobe just doesn’t understand that their customers want Choice. What the 1.4 million doesn’t say is how many have left because of CC’s launch. Adobe’s lost my business for good over CC. Adobe can be closing the door on perpetual licenses as many customers are likewise closing the door on their $ being spent on Adobe products.

  • Anonymous

    Recent news reports say that information on 38 million accounts were stolen when Adobe’s servers were hacked. Let’s assume that number represents a total count of their customers. Let’s be generous and discount half of those accounts as duplicates or bogus. Simple math leads to the conclusion that 92% of Adobe’s customers have not signed up for CC. That’s a lot of customers to lose.

    • Anonymous

      The true number of accounts that were compromised was 150 million according to a naked security article. I’d post the link here, but apparently that’s not allowed. Just do a search for “anatomy of a password disaster, adobe’s giant sized cryptographic blunder”

  • Patrick Toland

    I pay 53 bucks a month for the best software ever… updated asap, all the time. This 53 bucks allows me to make 6 figures a year, working at home editing video. If you are complaining about the price, you are nuts – or do not have a valid business model, and should use freeware. If you are having tech issues, I doubt it is Adobe – more likely your system. I only use 4 programs but have access to all the others, whenever I want. This is the best deal ever, and will always be an Adobe fan….

    • Anonymous

      Firstly, I’d refrain from calling any software from adobe, the best software ever. Hyperbole for hyperbole’s sake is just windbagging. Besides, adobe make software that could have been much better than it is. There are bugs in CS6 that were there many iterations ago. The cost is less the issue than the model (extortion). The entire reason that adobe are doing this is because they’re out of ideas..

      Congratulations on 6 figures, but there are many people and organizations that either don’t use it for the money or can’t.. The truth of the matter is, if adobe had any competition in this space they wouldn’t be able or eager to do this… They’re taking advantage of being the biggest fish in the pond! Why anyone would applaud this behaviour is beyond me, unless of course they’re a shill for the company..

    • Jeff

      I would tell you to look at Adobe TV’s youtube comments to discover the problems and dissatisfied customers but since so many negatives were posted, Adobe turned off youtube comments. At $1 a month I wouldn’t be interested in renting my tools. As for CC problems, simply take a look at Adobe’s own forum to see the actual CC users complaining. .

  • Joe Mahma

    .
    Pretty impressive since they gave people no choice. Uh huh.
    .

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