Adobe paints a vivid picture of investors’ software pessimism

{"text":[[{"start":4.35,"text":"Few companies are thrashing more in the AI wave than Adobe. The maker of creative software has slid to an eight-year share-price low. Its market capitalisation has fallen more than 40 per cent since the start of the year — when investors started to worry in earnest that insurgent AI tools would replace conventional software — shedding more than $60bn."}],[{"start":28.25,"text":"Some of its executives seem to have read the writing on the wall. Finance chief Dan Durn is leaving to take up the same role at Marvell, a chipmaker instrumental in the AI shake-up. Chief executive Shantanu Narayen plans to step down after nearly two decades running the company, though he will stay on as chair."}],[{"start":47.2,"text":"Measured by its top line — revenue increased 13 per cent in the latest quarter, the fastest rate in four years — Adobe is hardly in crisis. But it does risk losing its edge. AI presents an epochal deflationary threat, cutting into demand for flagship Adobe tools such as Photoshop, Premiere Pro and InDesign, which are found at all levels of the creative industries. Its response has been to offer products for free in the hopes of selling AI add-ons, but converting itinerant users into steady customers is easier said than done."}],[{"start":null,"text":"

"}],[{"start":77.45,"text":"Threats are mounting on fronts that once felt safe. Google, for example, is making it easier to view PDFs within its Chrome browser, a minor tweak but one that makes it less necessary for users to download Adobe Acrobat, a useful tool for luring users into the company’s universe."}],[{"start":96.45,"text":"Although it falls under the software-as-a-service umbrella, Adobe isn’t quite like its peers: a key difference is its popularity among individual “prosumers”. There are advantages to this, but such customers are often more price-sensitive than enterprise buyers. They’re unlikely to stick around if credible, cheaper alternatives emerge."}],[{"start":118.25,"text":"Things could have been worse. Adobe set out to buy Figma, the user interface design tool, for $20bn at the end of 2022, only to abandon the deal a year later because of European antitrust pushback. Figma’s value, like Adobe’s, has now halved despite increasing revenues. Had it got its way, Adobe would have bought at the top and been saddled with $10bn of extra debt."}],[{"start":143.45,"text":"There are still reasons for hope — thankfully, since the company is now hunting for new leadership. Its user base is expansive, with an estimated 40mn users of its Creative Cloud app platform at the start of this year. But the kiboshed tie-up with Figma will remain a tantalising “what if” for the company, which might have fared better had it made its takeover tilt amid the present software industry ructions. It certainly would have come at a much lower price."}],[{"start":177.3,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1781669060_7300.mp3"}