How Adobe Sharpened Its Sales Edge This Quarter
Some of the highest-quality technology stocks deliver double-digit revenue and earnings growth on such a dependable schedule that investors can be easily lulled into following numbers alone; that is, we can focus too much on the quarterly cadence of earnings results versus expectations and ignore the narrative behind a company's sustained success.
This is never quite a safe practice, as losing a grip on why a dominant company outperforms can set investors up for unpleasant surprises if its competitive advantages and market position begin to erode. It's especially critical to delve into outperformance during such an anomalous year as 2020.
Take the ubiquitous provider of cloud-based creativity and document tools, Adobe (NASDAQ: ADBE), which reported on its fiscal third quarter of 2020 on Sept. 17. Adobe recorded year-over-year top-line growth of 14% in the last three months, notching a record $3.2 billion in revenue. The company's digital media segment, which includes its "Creative Cloud" and "Document Cloud" software suites, expanded by 19%. This momentum made up for a more modest 7% revenue advance in the smaller "Digital Experience" segment, which continued to experience weaker advertising sales. Adobe was able to transfer its sales success directly to the bottom line: Net income jumped 20% against the prior-year period, to $955 million.
Source Fool.com
