Adobe Creative Cloud Is Not Growing Ex Price Increases
ADBE shares are near an all-time high, yet its core business is not growing.
Adobe’s core business - Creative Cloud - accounts for 60% of ADBE’s Total Revenue, yet that business is not growing ex-price increases.
Q1 FY’24: Adobe’s Creative Cloud business grew 11% including prices increases and grew only 1% excluding the 10% Creative Cloud price increase that took effect on November 1st 2023.
Full Fiscal Year’23: Creative Cloud grew 10% for the year. While I do not have Adobe’s price increase language on hand as I do for the recent November increase, my memory is that Adobe enjoyed a similar 10% Creative Cloud price increase in FY’23. This would mean Creative Cloud revenue was flat in FY’23 excluding price increases.
It is puzzling how ADBE shares can trade near an all-time high while Adobe’s core business is unable to grow the number of users or revenue.
Isn’t the pricing changes to CC only in certain regions and doesn’t affect all CC customers?