Adobe Inc.’s (NASDAQ: ADBE) stock was up 4.5% in afternoon trade on Friday after the company reported solid fourth-quarter 2019 results a day earlier. The company beat estimates with a 21% increase in revenue and a 25% growth in adjusted EPS.
The growth in topline numbers was driven by double-digit increases in the Digital Media and Digital Experience segments. Digital Media results were fueled by growth in Creative and Document Cloud. Adobe is investing in multiple new growth drivers, and believes the total addressable market for Creative Cloud will reach approx. $31 billion by 2022.
The growth in Document Cloud is being driven by new customer acquisition, migration from Acrobat perpetual licenses to subscriptions, and the monetization of an ever-increasing universe of Document Cloud mobile app users. Adobe estimates the total addressable market for Document Cloud will grow to approx. $13 billion by 2022.
On its quarterly conference call, the company said it is rapidly evolving its Customer Experience Management (CXM) product strategy to deliver generational technology platforms, launch innovative new services and introduce enhancements to its market-leading applications.
Within the Digital Experience division, Adobe saw a 31% growth in subscription revenue. The company also saw strong year-over-year growth in its Content & Commerce solutions led by Adobe Experience Manager.
For the first quarter of 2020, the company expects total revenue of about $3.04 billion, GAAP EPS of $1.76, and adjusted EPS of $2.23. For fiscal 2020, total revenue is projected to be about $13.15 billion. GAAP EPS is expected to be about $7.40 per share, and adjusted EPS is estimated to be $9.75.
Following the results announcement, a number of analyst firms have increased their price targets for Adobe’s stock.