Adobe Investor Handout
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Adobe Systems Incorporated May, 2008 1 2008 Adobe Systems Incorporated. All Rights Reserved. 1 Market Trends Explosion in the Number of Connected Devices Adobe revolutionizes how the world engages with ideas and information 2 5 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Strong Business Momentum Market Trends Revenue Growth Rich Media is the New Foundation of Communication Revenue (Millions) $3,500 % R: 25 $3,158 CAG $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 FY03 FY04 FY05 FY06 FY07 Source: Adobe 3 6 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Diverse Customer Base Market Trends From Individual Productivity to Working Better Together Print and Publishing Platform Mobile and Device Solutions Adobe revolutionizes how the world engages with ideas Creative Solutions and information Business Productivity Solutions Knowledge Worker Enterprise Technology Platform 4 7 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. 1 Market Trends Adobe AIR Next Generation Experiences Combine Desktop With Web . Technology platform to deliver next generation rich Internet experiences . Combines the reach of the web with the power of the desktop . Built on industry standards . Content and applications created using Adobe designer/developer tools 8 11 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Adobe’s Platform Evolution AIR Showcase Customers PostScript PDF Flash AIR 9 12 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Four Generations of Applications Devices + Desktops 2007 Deployments Global 2004 WEB APPLICATIONS RICH INTERNET Consumer APPLICATIONS Electronics 1998 Mobile REACH Phones Personal 1992 Computers Local MAINFRAME DESKTOP Server Interaction Client Interaction RICHNESS Source: Strategy Analytics, Gartner Reseach 10 13 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. 2 Flash-enabled Devices Open Screen Project . Drive consistent, rich Internet (Millions) 1B1B experience . Enable developers and designers to seamlessly publish content and applications across connected devices . Utilize Adobe Flash and AIR as Cumulative FlashLite Shipments FlashLite Cumulative technology foundation . Web browsing . Applications Source: Adobe 14 17 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Device Platform Fragmentation Creative Solutions Opportunities 100% Content Creation Tools Dynamic Media Device Penetration Hosted Services 0% Esmertec Sony Aplix Nokia Nokia Opera Access Openwave Windows Adobe Jbed Ericsson Java JBlend S40, S60 Browser* Browser* Browser* Browser* Mobile Flash Platform Java ME * Estimate of HTML browser penetration, excludes WAP-only browsers Source: Strategy Analytics, Adobe 15 18 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Adobe and Industry Leaders Establish Open Screen Project Creative Suite Success CS3 Drives 40% Revenue Growth vs. CS2 CS3 CS Product Family Revenue CS2 CS1 Launch +1Q +2Q +3Q +4Q +5Q +6Q +7Q Quarter Source: Adobe 16 19 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. 3 Creative Suite Success Creative Suite “Next” As We Have Delivered More Value, ASPs have Risen Opportunities Focus on Rich Media Creation Average Selling Price of Creative Professional Products* . Full development cycle . Deeper end-to-end workflow integration allows for more integration . Cutting edge features and innovation . Productivity and performance improvements . Rich Internet Application trend creates opportunity . Introduction of new services to expand tools for . “Must-have” release enhanced designer/ developer workflows . New customers and emerging markets . Upgrade and up-sell * Reflects Commercial and Education licenses Source: Adobe 20 23 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Creative Suite Opportunity Dynamic Media Opportunity Industry Tailwind Creative Suite Penetration* Addressable Market (Millions) US Online Advertising Forecast 5 4.3 $6.0B Flash Streams Served 4 Top Six CDN Partners 1.7 $4.5B 3 2.4 Rich Media Advertising 2 1.6 1.1 6.0M $3.0B 0.7 2.6 Creative 1 Professionals 1.3 Online 0.9 Video 0 $1.5B Source: Adobe 1/2006 3/2007 3/2008 38M+ Creative 38M+ Non-Professionals Suites Licensed by Non-Creative Professionals $0B Suites Licensed by Creative Professionals 2007 2008 2009 2010 2011 2012 * Excludes Suite to Suite upgrades Source: Adobe Source: Jupiter 2007 21 24 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Photoshop Family of Products Dynamic Media Opportunity The Cornerstone of Our Creative Business Adobe’s End-to-End Workflow CREATION DISTRIBUTION PlanAcquire Produce Manage Publish Deliver Playback Photoshop CS3 Photoshop Photoshop Photoshop Photoshop CS3 Lightroom Elements Express Extended . Professional Digital Imaging units up 36% year/year A complete, customizable cross-platform solution to create, distribute and monetize content . Consumer Digital Imaging achieved another record revenue across big, small and really small screens year Source: Adobe 22 25 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. 4 Dynamic Media Opportunity Dynamic Media Opportunity Business Momentum Adobe Media Player Adobe Dynamic Media Revenue . Next generation desktop media player based on Adobe AIR . Lets content providers control, deliver, brand and monetize their content . Lets users manage their videos, and view them online and offline Source: Adobe 26 29 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Dynamic Media Opportunity Dynamic Media Opportunity Tools Monetization Adobe Media Player Monetization . Provide complete end-to-end CREATION DISTRIBUTION workflow PlanAcquire Produce Manage Publish Deliver Playback . Tightly integrate Flash across the tools portfolio . Gain Macintosh market share METADATA CREATION . Migrate point-product users to Planning Info Location Info Production Info Suites Pre-visualization Camera settings Text transcript Policies Publishing Stream quality Contextual ad delivery Script Wardrobe Time codes Sales rights Advertising Format selection Playback analytics . Innovate and deliver “must-have” insertion Actor Scene and take Edits/effects Geo exclusivity data Analytics features Product info Ad insert points Increased CPMs Geo info Campaign Character info management 27 30 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Dynamic Media Opportunity Hosted Services Opportunities Rich Media Delivery Monetization with Flash Media Server Number of CDN Partners Flash Video Streaming Volume Petabytes eCommerce Consumer Creative Pro Source: Adobe 28 31 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. 5 Scene7 eCommerce Hosted Services Acrobat Success Reported Revenue Doesn’t Include Acrobat Units in Suites . Acquired May 2007 Acrobat Revenue Acrobat Units Delivered in Creative Suites* . Ratable revenue model (Millions) (Millions) 1.6 . Dynamically delivers rich CS $800 assets on demand to any channel CAGR: 16% of distribution . Hundreds of customers in retail, manufacturing . Nicely augments CS products $0 0.0 FY03 FY04 FY05 FY06 FY07 FY03 FY04 FY05 FY06 FY07 *Acrobat units not reflected in reported Knowledge Worker revenue Source: Adobe 32 35 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Business Productivity Solutions Acrobat Market Opportunity Bringing documents, people and processes together Cumulative Acrobat Licenses vs. Market Potential anytime, anywhere on any platform Total potential users 127 million Acrobat Acrobat Connect LiveCycle Empowering knowledge workers to Empowering knowledge worker Empowering organizations to engage reliably share information with collaboration through high impact customers, partners, and employees in anyone web conferencing key business processes Ubiquitous Clients New unit licenses 30 million Reader Flash® AIR As of March 2008 Source: Adobe 33 36 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. Acrobat At Work Acrobat “Next” Focus Areas Bringing documents, people and processes together anytime, anywhere on any platform . Enrich the PDF experience Acrobat . Help people work better Empowering knowledge workers to together reliably share information with anyone . Reach a new set of users Ubiquitous Clients Reader Flash® AIR 34 37 2008 Adobe Systems Incorporated. All Rights Reserved. 2008 Adobe Systems Incorporated. All Rights Reserved. 6 Acrobat Connect Pro Solving the Engagement Gap Distributors Customers Suppliers & & Agencies & Citizens Contractors Acrobat Connect Pro Revenue (Millions) % User Experience 45 User Experience : 1 GR CA Reach . Easily share your screen and files Reach . Personalized meeting rooms ServersServers andand ServicesServices . Hosted or on-premise software . Success in eLearning and virtual classroom applications Internal Processes