Why did Wall Street prefer Adobe’s quarter to Salesforce’s? • businessupdates.org

by Ana Lopez

If you look Bee Adobe and Sales team, although there are many differences, in some areas they compete directly. And when you look at their overall performance, the numbers weren’t all that different in their most recent earnings reports:

For Adobe:

  • Income from $4.53 billionwhich was right in line with analyst expectations, a 10% increase, which translates to 14% in constant currency if the dollar wasn’t so strong that it dragged down foreign earnings.

For Sales Force:

  • Income from $7.8 billion, compared to $7.2 billion expected by the analyst class. That was an increase of 14%, or 19% in constant currency.

On the surface, that looks pretty similar, but Salesforce’s share price has fallen since it announced its results. On Friday, the day after Adobe released its most recent results, the stock closed nearly 3%.

To be fair, Salesforce dropped the great news that Bret Taylor would be leaving at the same event, which may have spooked investors, but Adobe’s 10% number isn’t exactly something to shout from the rooftops.

In fact, it’s perilously close to a single-digit growth freeze, a place no publicly traded company wants to live (except perhaps IBM). But Adobe has some advantages that Salesforce doesn’t. The first is that it’s massively diversifying its earnings, which should help as we head into the new year amid continued economic turbulence.

While the vast majority of revenue still comes from the creative side of the house, as Adobe celebrates its 40th anniversary, we’re starting to see long-term bets CEO Shantanu Narayen made on marketing starting to pay off. That includes the $4.75 billion acquisition of Marketo and the $1.6 billion acquisition of Magento, both of which occurred in 2018.

The company also announced that Experience Cloud, which includes marketing tools and analytics products, reached $1 billion for the quarter for the first time – $1.15 billion to be exact.

Brent Leary, founder and principal analyst at CRM essentials, which closely monitors the marketing and sales markets, said it’s a big milestone for Adobe.

“I think most people still think of Photoshop, Illustrator and the rest of the Creative Cloud apps, but Experience Cloud reaching this milestone illustrates how important it is to use those tools to create and manage customer experiences to build deep, long-lasting relationships with them .

“Experience Cloud kind of comes out of the shadows of Creative Cloud,” Leary told businessupdates.org.

And speaking of diversification, investors may not have been thrilled with Figma’s $20 billion price tag when it was announced, but they seem to be getting used to the idea of ​​it becoming part of the company. Of course, the deal has yet to clear significant regulatory hurdles in the US and abroad before it becomes reality.

But even without that, let’s face it: Figma’s earnings aren’t going to change much anytime soon, and Adobe is doing pretty well. But let’s take a closer look at these two reports and see if they are as similar as they appear on the surface, and try to dissect why Adobe is getting more favorable treatment for investors.

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