Adobe Systems

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Main article: Adobe in Russia

Company history

2023: Agreement to pay $3 million for kickbacks when supplying software to government agencies

On April 3, 2023, Adobe agreed to pay $3 million to settle charges of kickbacks related to software sales to US federal authorities. Three informants from among the former Adobe managers will receive $555 thousand as part of the settlement of claims.

According to a statement from the US Department of Justice, this agreement will settle allegations that Adobe made improper payments under its Solution Partner program to companies that had contractual or other relations with the US government. This allowed Adobe to influence federal software purchases.

Adobe agreed to pay $3 million to settle kickback charges

According to court documents, between January 2011 and December 2020, Adobe paid companies a percentage of the software purchase price. The US Department of Justice argues that these payments were prohibited kickbacks, as a result of which Adobe submitted false applications for payment to US federal agencies. The department said it would continue to use all necessary tools to ensure the integrity of the federal procurement process.

Adobe has been cooperating with authorities since the investigation began in 2018. We appreciate our relationship with the American government and government customers and are pleased that this situation is behind us, "said Adobe Chief Executive Officer Shantanu Narayen.

According to Reuters, the general concept of corruption between companies and the state in the United States is not much different from others. Such a substitution of concepts gives the United States an excuse to describe bribery by legal "promotion of corporate interests," and in other countries the same scheme is called embezzlement. At the same time, the classical definition of corruption sounds quite certain and calls it such an act "the use by an official of his power and trusted rights for personal gain."^[1]

2022: $ Figma's $20 billion purchase

On September 15, 2022, Adobe announced the acquisition of Figma for $20 billion. The buyer will pay half of the transaction with their own funds, and the other part with shares. As Bloomberg notes, we are talking about the largest takeover of a software developer in history. Read more here.

2021: Buying a platform to edit videos together Frame.io

On August 20, 2021, Adobe announced plans to acquire a cloud platform for joint video editing Frame.io for $1.28 billion. Read more here.

2020: Purchase of Workfront Project Management Software Developer

On November 10, 2020, Adobe announced the purchase of Workfront for $1.5 billion. It is planned to close the deal by the end of February 2021. Read more here.

2019: Purchase of 3D texture and materials software developer Allegorithmic

On January 23, 2019, [[Adobe 'Adobe] announced]] the acquisition of the 3D texture and materials software developer Allegorithmic, but did not disclose the cost and other terms of the transaction. Read more here.

2018

Q4 sales growth of 22% to $2.46 billion

A few years ago, Adobe dramatically changed its business model in favor of selling online subscriptions to cloud services Adobe Creative Cloud, Adobe Document Cloud, Marketing Cloud, which included updated versions of the company's products. At first, management recorded a reduction in revenue and profit, but pretty soon users got used to the new system, which made it possible to quickly catch up. Recently, Adobe has been steadily showing double-digit growth in financial indicators.

The company's revenue in the fourth quarter of fiscal 2018 increased by 22.8%, reaching a record $2.46 billion and exceeding the consensus forecast at $2.43 billion. Revenue from cloud service subscriptions accounted for 88.6% of total revenue, while product sales under traditional distribution channels fell 22% and their share in revenue fell to 6.1%. Sales in the Digital Media Solution segment rose by 23%, to $1.71 billion - against the background of revenue growth of the Creative Cloud service by 25.5%, to $1.45 billion.

Geographically, sales in North America rose by 22.2%, in the EMEA region - by 26.4%, in Asia - by 18.6%. Adjusted EBITDA grew by 19.4%, exceeding $1.06 billion, and operating profitability decreased by 1.2 percentage points to 43%. Adjusted earnings per share soared 45.2% to $1.83, although they fell slightly short of analysts' average estimate of $1.88.

The company is actively developing the Sensei artificial intelligence and machine learning platform, elements of which are already beginning to be used in its products.

Participation in the Open Data Initiative

On September 24, 2018, Microsoft, SAP and Adobe announced a joint initiative that aims to help companies use their own data better and more profitably for themselves. Read more here.

Purchase of marketing automation platform developer Marketo for $4.75 billion

On September 20, 2018, Adobe officially announced the acquisition of Marketo from private equity fund Vista Equity Partners, for which the deal turned out to be profitable. Vista bought Marketo in 2016 for $1.8 billion, and now sells for $4.75 billion. All formalities regarding the sale of Marketo are planned to be completed in the fourth quarter of Adobe's fiscal year 2018. Read more here.

$1.68 billion purchase of CMS Magento developer

On May 21, 2018, Adobe announced the acquisition of Magento for $1.68 billion. This deal will allow the buyer to better compete with e-commerce market leaders Salesforce.com and Oracle. Read more here.

Average employee experience - 5.3 years

At Adobe, employees work an average of about 5.3 years. Here, employees are offered gyms, reduced-cost public transport, free meals and sabbatical every five years. Read more here.

2017: Adobe and Microsoft: shared data format

On March 21, 2017, Microsoft and Adobe announced the creation of a data format that will be used in enterprise applications focused on the B2B sector. Adobe Systems and Microsoft plan to join forces to confront competitors in the corporate segment.

The merger will be to create a common data format for companies. It will be compatible with Adobe's digital marketing software suite, which will receive the cloud name Experience Cloud and Microsoft Dynamics Adobe and Microsoft's line ^[2] enterprise resource planning (ERP) and customer relationship management (CRM ) software applications ^[2]

This will allow customers to go beyond the current software restrictions in which they are forced to act. Scott Guthrie, Vice President, Microsoft Development and Cloud

2016: Record revenue of $5.85 billion, up 22%

On December 15, 2016, Adobe released its fiscal 2016 performance report. The company's revenue grew to a record high thanks to the transition to a cloud-based software distribution model.

For the 12-month reporting period ended December 2, 2016, Adobe sales increased by 22% compared to the previous year and reached $5.85 billion, which has never happened in the history of the American software manufacturer.

Adobe earns record annual revenue with move to cloud business

Net profit also increased - almost doubled to $1.2 billion. Operating profit rose from $903 million to $1.5 billion. The vendor connects the confident rise in revenues with an increase in demand for digital products.

Our entire Adobe business performed strongly in 2016, we met or exceeded all our key financial goals for the year, "said Mark Garrett, Executive Vice President and CFO of Adobe.

Adobe's growing revenue comes from cloud-based product subscriptions. In 2016, the corresponding revenue of the company reached $4.6 billion against $3.2 billion in 2015. Sales of boxed solutions decreased from $1.1 billion to $800 million.

In the total turnover of the company, the share of subscriptions amounted to 78%, while five years earlier this share was measured by 11%.

In fiscal 2016, revenue from the Creative Cloud cloud project (contains online analogues of the popular Photoshop, Illustrator and Dreamweaver programs) amounted to $3.2 billion, which is 38% more than a year ago.

On the Marketing Cloud product, in which Adobe offers corporate clients tools for analyzing customer interaction processes and managing content on social networks, the company earned $1.63 billion. This is 20% more than in 2015.^[3]

For the first quarter of fiscal 2017, Adobe expects revenue of $1.63 billion, below the average forecast of analysts ($1.65 billion) surveyed by Thomson Reuters I/B/E/S.

2015

2x net income growth to $629.6

On December 10, 2015, Adobe released its Fiscal Year 2015 Performance Report. The company's profit more than doubled due to a reduction in restructuring costs and the strengthening of its digital business.

In the 12-month reporting period ended November 27, 2015, Adobe's net profit was $629.6 million versus $268.4 million a year earlier. Revenue for this period rose by 16%, reaching a record $4.8 billion. In this amount, boxed software sales accounted for $1.1 billion against $1.6 billion in fiscal 2014.

Adobe doubles profits as restructuring costs cut

Most of Adobe's revenue is generated by software subscriptions: annual revenue from them increased from $2.1 billion to $3.2 billion. In 2015, the number of new paid subscribers of the Creative Cloud cloud project (contains online analogues of the popular Photoshop, Illustrator and Dreamweaver programs) increased by 2.17 million users and amounted to 6.17 million. The volume of digital business, to which Creative Cloud belongs, during this time rose by $1.12 billion to $3 billion.

Another major source of revenue for Adobe is the Marketing Cloud product, in which the company offers corporate clients tools to analyze customer interaction processes and manage content on social networks. In 2015, Marketing Cloud sales reached a record $1.36 billion, and the company was able to fulfill the 30 percent increase in orders in this market, according to an Adobe report.

Despite the growing sales of popular Adobe products, the main stimulus for net profit growth was reduced restructuring costs. In the reporting year, they were measured at $1.6 million, and a year earlier - almost $20 million. However, the total operating costs of the company for the year remained practically unchanged.

"Strong growth in key financials reflects the impressive performance we achieved in fiscal 2015," says Adobe CFO Mark Garrett. "Our long-term goals, including an average annual revenue growth rate of 20% until the 2018 financial year, prove that the benefits of moving to the cloud are just beginning to affect^[4]

Penalty for personnel collusion with other IT companies

In mid-January 2015, Adobe, Apple, Google and Intel announced their intention to pay $415 million in compensation for a pre-trial settlement of a class action lawsuit accusing IT companies of personnel conspiracy. True, the amount of compensation turned out to be several times less than the one demanded by the accusing side initially.^[5]

A lawsuit filed back in 2011 on behalf of 64 thousand employees of Apple, Google, Intel and Adobe claimed that these employers secretly agreed not to poach employees from each other, thereby limiting for them the possibility of salary growth and finding a more attractive job in a competing company.

At first, IT giants in every possible way denied the accusations against them, but in 2013 they agreed to pay $324.5 million. District Court Judge in San Jose (California, USA) Lucy Koh said that the amount should be at least $380 million. Initially, the plaintiffs demanded about $3 billion from the violating companies.

Apple, Google, Intel and Adobe punished for collusion not to poach employees 

According to Lucy Koch, in the case of conspiracy to obstruct the employment of workers, there is enough evidence of violation of antitrust laws, as a result of which, without a pre-trial settlement, Apple, Google, Intel and Adobe face a fine of $9 billion or more.

Therefore, the companies decided to pay compensation to their employees, the amount of which is on average $5 thousand per employee, excluding the cost of lawyers, which is $1 thousand less than the previously proposed amount.

One of the main initiators of the class action lawsuit, former Adobe engineer Michael Devine, opposed it. He supported the size of the new compensation. Judge Lucy Koch must now have her say. If for any reason it does not approve the terms of the agreement proposed by Apple, Google, Intel and Adobe, then on April 10 the trial in this case will begin.

In their defense, technology companies claim that their employees' salaries have increased in recent years, so that even in the case of any employers' agreements, employees' incomes have not been undermined.

2014: Revenue rose to $4.147 billion, but profit fell to $290 million

On December 12, 2014, Adobe Systems reported results for fiscal year 2014. The U.S. company's revenue rose slightly, but profits fell.^[6]

In the 12-month reporting period closed on November 28, 2014, Adobe's net income was $290 million, or 51 cents per share, versus $253.6 million, or 58 cents per security, a year earlier. Operating profit decreased to $393.2 million, while in fiscal 2013 this figure was $422.7 million. Revenue amounted to $4.147 billion against $4.055 billion a year ago.

Adobe annual revenue rises, but profits fall

In the structure of revenue, the sale of software products brought Adobe about $1.6 billion, the sale of subscriptions a little more - $2 billion. The company earned $442.7 million on various services and support services.

The manufacturer's operating expenses ON exceeded $3.1 billion, where most ($1.67 billion) fell on the organization of sales and. marketing The second largest expense was research and development - $844.4 million. General administrative costs took $543 million.

Excluding certain expenses (Non-GAAP), Adobe's annual net income was $658.4 million, or $1.29 per share, versus $689.7 million, or $1.34 per share, a year earlier.

The Adobe report also shows that by the end of November 2014, the number of paid subscribers to the Creative Cloud cloud project (includes online counterparts of the popular Photoshop, Illustrator and Dreamweaver programs) reached 3.454 million. By the end of 2015, the company plans to bring the size of the Creative Cloud audience to 5.9 million users.

In fiscal 2014, Adobe's revenue from Marketing Cloud (providing tools in web analytics and content optimization, allowing companies to make informed decisions and ensure the success of marketing companies) reached a record $1.17 billion. In the Digital Media segment, the company earned $2.6 billion, while it expected revenue of $2.5 billion.

For the reporting year, Adobe bought back 10.9 million of its own shares in the amount of $689 million. By November 28, 2014, the company's accounts had accumulated about $1.1 billion in the form of cash and cash equivalents, as well as short-term investments.

2012: Adobe closes access to users' forum

On November 15, 2012, Adobe Systems closed access to the Connectusers.com Internet Forum, where users exchange information about the use of its Connect online conference service, due to the leakage of user data, Reuters reported.

Adobe software products are often targeted by hackers because they are widely used to process and publish electronic documents. The current incident was publicized after an anonymous hacker posted 644 Connectusers.com accounts on the Internet on Tuesday, which included usernames, email addresses and password hashes (encoded password values ​ ​ stored in the service database).

According to the hacker, the complete database stolen by him includes data from more than 150 thousand forum accounts. According to him, the purpose of the hack was to demonstrate Adobe's slow response to the identified vulnerabilities.

The company acknowledged the hack and temporarily closed access to the forum. In addition, Adobe said it would reset the passwords of about 150,000 Connectusers.com users who could fall into the hands of a hacker. According to Adobe, the accounts of the Connect service itself, as well as the data of other websites of the company, are not compromised.

The hacker, who gained access to Adobe forum data, also promised to publish data stolen from the Internet company Yahoo, Reuters notes. Representatives of Yahoo did not comment on this information.

The data leak from the Connectusers.com user forum was revealed a week after Russian information security experts from Group-IB discovered a previously unknown vulnerability in the popular Adobe Reader PDF image viewer (10 and 11 versions) - the so-called "zero-day vulnerability," which for two weeks cybercriminals have been using to distribute banking Trojan programs.

Adobe spokeswoman Wiebke Lips said the company is studying the Group-IB report, although it has not yet received examples of malicious code from information security experts.

2011

Q1: Record Sales

In the first quarter of fiscal 2011, which ended on March 4, the company Adobe received revenue of $1,028 million. For comparison, in the first quarter of 2010, the company's revenue amounted to $858.7 million, and in the fourth quarter of the same year - $1008 million. Thus, Adobe recorded a record income figure, 20% higher than in the same period last year. Diluted earnings per share for the first quarter of fiscal 2011, calculated at, GAAP was $0.46, comparable to the results of the first quarter of 2010 ($0.24), but less than in the fourth quarter of 2010 ($0.53). GAAP operating income was $302.3 million or 29.4% of the company's revenue in the first quarter of this year. GAAP net income was $234.6 million.

In the second quarter of 2011, Adobe expects to reduce revenue by about $50 million compared to normal. This is due to the situation in Japan, which is the second largest market for Adobe. Accordingly, the company's expected revenue in the next quarter ranges from $970 million to $1.02 billion.

Staff reductions and a new development strategy

In November 2011, Adobe Systems announced a reduction in investment in the development of the corporate business and the upcoming dismissal of 750 employees. All this is done in order to move as quickly as possible in strategic markets for the company: digital media and digital marketing, the company said. These measures are only part of Adobe's long-term strategy aimed at developing precisely these "explosive categories."

Adobe products aimed at enterprise users include Adobe Connect and Adobe LiveCycle, as well as web content management software that the company got after buying Day Software. However, the Acrobat family, which is handled by the Adobe employee knowledge management department, does not belong to this category.

Over the last quarter, the Enterprise Products Department brought Adobe less than 10% of total revenue, far less than the core business lines - content creation tools and digital media products.

At the same time, Adobe will increase investment in the Creative Suite and HTML 5 line through the development of Dreamweaver and Adobe Edge. In the direction of digital marketing, the company plans to develop its own analytics and reporting solutions, especially those working on mobile devices and social networks.

The announced staff reduction will be made mainly in Europe and North America. At the end of 2010, the company had about 9.1 thousand employees, so the reduction will affect about 8% of the company's employees. Restructuring costs in the current quarter will amount to $87-94 million, mainly this money will be spent on severance payments. This will reduce earnings to about $0.30-0.38 per share, Adobe predicts. The company previously forecast earnings of $0.41-0.50 per share during the current quarter, which ends December 2, 2011.

The company expects quarterly income at $1.075 billion - $1.125 billion. Analysts call the figure about $1.09 billion. The changes will also affect the company's revenue growth in the next financial year by about 4-5 percentage points, so that its growth will be about 6%.

"We believe that by focusing on two main areas and changing our business model, we will achieve faster and more predictable growth in 2013 and beyond," said Mark Garrett, CFO of the company.

Notes