Adobe is a tech giant.
The American software company may not get the media attention of other big tech companies, but in financial terms, it absolutely should. At yesterday's closing price, Adobe, Inc. has a market cap of $246bn. For some context on just how big that is, Netflix's market cap is $245bn.
Photoshop and PDFs are big business
In the last 15 years Adobe has transformed itself into a software powerhouse, more than tripling its revenue since 2010. Although the company is most famous for its PDF-reader and photo-editing software Photoshop, Adobe actually sells an entire suite of software products, all sold with recurring subscriptions, which make up the bulk of Adobe's business.
Back in 2013, Adobe pivoted to that recurring subscription model, and its revenues have grown every single year since, last year reaching almost $13bn, with a whopping 87% gross profit margin.
Pivoting to the subscription model was a genius move for the company, but it doesn't always mean happy customers. This week Adobe grabbed headlines when a few customers on Twitter revealed the huge cancellation fees they were being charged when they tried to cancel their contracts. It turns out many of Adobe's subscription products are year-long contracts that just happen to get billed monthly.
