Adobe financials: little change in segment breakdown

Adobe has released its Q3 2009 results [pdf], which show a decline in both revenue and profits compared to Q3 2008. I’m not a financial analyst, but the general view seems to be that the figures are reasonable considering the economic downturn, and that Adobe has done well to trim its costs accordingly.

What interests me most is the breakdown [pdf] in Adobe’s revenue between tools and other services. Here’s what it was last time I looked:

Revenue by segment ($millions) FY2008 YTD August 2008 – representing 3 quarters

  • Creative Solutions $1564.3 [58.7%]
  • Business Productivity Solutions $786 [29.5%]
  • Mobile and Device solutions $64.9 [2.4%]
  • Other $249.4 [9.4%]

and now:

Revenue by segment ($millions) FY2008 YTD August 2009 – representing 3 quarters

  • Creative Solutions $1272.8 [58%]
  • Business Productivity Solutions $646.7 [30%]
  • Platform Revenue $134 [6%]
  • Print and Publishing 135.1 [6%]

It’s unfortunate that the last two categories have changed, but the general picture seems to be much as before.

Creative Solutions means mainly Creative Suite.

Business productivity is Acrobat and LiveCycle, including Acrobat.com.

Platform is Flash Player, AIR, Cold Fusion, Flex and the developer tools.

Print and Publishing is the stuff you might have forgotten about: FrameMaker and PageMaker, Director, PostScript, Robohelp, and a few other bits and pieces. It’s interesting that these older products generated more revenue than the trendy new platform, Flex and AIR.

A couple of observations. First, Adobe is making little progress in reducing its dependence on sales of tools – I don’t know if this is even its aim, though it strikes me that it should be, since the tools business is a precarious one and prone to commoditization. As I understand it, Adobe has considerable ambitions for building Acrobat.com as a cloud service but this looks like mostly future hope.

Second, the huge success of Flash media on the web does not seem to be showing up as increased revenue. Maybe Microsoft’s efforts with Silverlight streaming are exerting a downward pressure on prices?

Adobe may say it is well positioned to benefit from economic recovery, which actually seems plausible.

Disclosure: I deliberately avoid investing in companies about which I write.

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2 thoughts on “Adobe financials: little change in segment breakdown”

  1. Adobe had announced that it would no longer be charging OEMs fees to install Flash Lite on their devices, which had been where most of that $64.9 million in Mobile and Devices solutions revenue came from, I believe. The goal was to speed up the adoption of the mobile Flash player under the Open Screen Project initiative. This would explain how that revenue disappeared so completely.

  2. Very interesting piece on ADBE’s revenue break down. Have you (re) considered your position regarding Flash’s success on the Web lately? It is seriously threatened by html5 as a standard for video and likely not to be embarked the iPad finally.

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