Some people say, "2018 is the worst year in the past decade."

The market is volatile, the economy is tense, the primary market huddles together to keep warm, and the secondary market sighs that "no loss is gain".

The ofo scene that was once praised by others is gone, and Zhihu Inc., who takes you to see the world, has been laid off; the new economy companies XIAOMI and Meituan have failed one after another in Hong Kong stocks, while Tencent Music, the unicorn, is listed at a low-end price; and analysts at Morgan Stanley said frankly, "We are already in a bear market."

With mud and sand, who is the most resistant to pressure?

Whether it is a bear from a long bull or not, skyrocketing and plummeting US stocks are still gripping. When the public's eyes are on the 5G battlefield, the corner of the cloud business is still "shining".

Apple Inc, who makes hardware, is "behind bars", and his market capitalization has been surpassed by Microsoft Corp.On the other hand, the technology companies that occupy the market with cloud business are more resistant to the cold in the volatile market.For example, Microsoft Corp and Amazon.Com Inc occupy the TOP position in the global market by relying on the platform cloud business, and Saifu occupies the first place in the industry by virtue of customer relationship management cloud services. while the stock price is under pressure, it also makes people marvel at the importance of choosing the right "track".

You know, in addition to the above three "cloud" industry leadersAdobe Inc, who is well-known to the Chinese people, is no less than the P-map giant.

Like Alphabet Inc-CL C, who was born in a Silicon Valley garage, Adobe Inc was founded in the garage of founder John Warnock. Like all stumbling entrepreneurs, Adobe Inc did not become the ancestor of map revision overnight.

In the early days, the company focused on developing professional printing software and created Adobe Inc PostScript page description language. Then release digital font products and cooperate with Microsoft.

In 1989, Adobe Inc launched a graphic editing program called Photoshop.At this point, Pitu boss's "open and hang" career began.

In 1993, Adobe Inc introduced the PDF document format. In 2008, the PDF file format was incorporated into the management of the International Organization for Standardization and became a necessary format for job seekers to send resumes.

Now, Adobe Inc has dozens of software in design, video, audio, e-teaching, digital marketing and other fields, and has successfully completed the cloud business transformation through "subscription".The market capitalization stands firmly at hundreds of billions of US dollars.

It is worth mentioning that there is another company that came from P map-$Meitu (01357.HK) $, which plunged as much as 90% after the listing of Hong Kong stocks. At present, the market capitalization is only 8.7 billion Hong Kong dollars, that is to say, Adobe Inc is equivalent to 90 Meitu!

The profit is lower than expected, can you still be optimistic about it?

After the US stock market opened on December 13, 2018, Adobe Inc released his quarterly report (as of November 30, 2018) and full-year results.

Quarterly revenue was $2.46 billion, up 23% from a year earlier. Revenue for fiscal 2018 reached $9.03 billion, up 24% from a year earlier.

Quarterly profit was $678 million, or $1.37 per share, compared with $501.5 million, or $1.02 per share, or $1.87 per share, in the same period a year earlier; and earnings for fiscal 2018 were $2.591 billion, up 53 per cent from a year earlier.

The company expects adjusted earnings per share of $1.60 on revenue of $2.54 billion for the first quarter of fiscal 2019 and $7.75 per share on revenue of $11.15 billion for fiscal 2019.

-SEC announcement

According to the financial report, Adobe Inc's main source of income is still the innovative business income of the digital media business, including CC cloud services, PS and other products; the annual revenue reached 5.3 billion US dollars, accounting for 62.6 per cent of the revenue.

Although the full-year revenue of the digital media business is less than that of Microsoft Corp's Azure cloud business, its strong product demand still has an advantage in the market where there is no alternative, and the subscription model of the cloud business will encourage users to continue to use it.

As stated in the announcementQuarterly profit fell short of expectations.According to the financial results, it is mainly due to the increase in the cost of the main business and the expansion of sales and administrative expenses, which is partly due to seasonal discounts and pricing changes in North America. Throughout the recent quarterly profits, we can also see that Adobe Inc's performance growth rate fluctuates greatly, and the quarterly growth rate tends to slow down.

Count the money until you are soft: the gross profit margin is as high as 85%

Like Microsoft Corp, Adobe Inc's family's road to getting rich begins with selling software.

Before 2011, Adobe Inc mainly sold Creative Suite (CS) suite software through third-party distributors, including Photoshop, Illustrator and other products.The traditional way is to make a profit by "buyout" the right to use the product, but the high price of the product and the inability to obtain long-term benefits undoubtedly hinder the long-term development of the company.

In 2012, Adobe Inc began the cloud transformation, and the company tentatively launched Creative Cloud (CC) cloud services. In early 2013, the company fully promoted the cloud subscription transformation and announced that CC would become the main force in the future, and the CS suite would no longer be updated.

The 2018 CC products in China include 15 softwares:

The transformation from one-time purchase of package products to subscription-based software has greatly reduced the purchase threshold of Adobe Inc's customers, enhanced user stickiness, and effectively provided value-added services through cloud services and big data, creating sufficient room for profit.

In terms of gross profit margin, Adobe Inc's performance is still excellent.The gross profit margin in fiscal year 2018 is as high as 86%, and the gross profit margin in this quarter is 85%, far higher than that of companies in the same industry.

In additionThe company shows its confidence in the stock price by buying back the shares.Adobe Inc bought back about 1.6 million shares in the quarter, returning $397 million in cash dividends to shareholders, while in fiscal year 2018, he bought 8.7 million shares and returned $2 billion in cash to shareholders.

High user stickiness, with ARR as high as $1.45 billion

For Adobe Inc, revenue and profit are data that investors care about, but the profit space in the future is more fascinating.

As one of the SaaS service providersAdobe Inc also disclosed the annual recurrent income (ARR) in his financial report.Which mainly reflects the accounts receivable under the signed contract under the subscription system. In short, it is paid on an annual and monthly basis.

Take the well-known video site, for example, users promise to open annual membership, the system automatically deducts fees, and the amount that has not been deducted is also calculated in ARR as future expected income. Through this data, we can learn about Adobe Inc's number of users and future profit space.

According to the digital marketing business ARR disclosed in the financial report, the ARR reached US $430 million in the fourth quarter and US $1.45 billion for the whole year. Assuming that the current number of paid subscribers is an enterprise user and buys a full set of CC products, the monthly payment is $922.79.According to this data, Adobe Inc has at least 130000 enterprise users to generate income for him next year.

Of course, this is just an estimate of its most expensive products, and Adobe Inc's actual number of users should far exceed this number. From the official website, the company's target customer base is mainly divided into four categories, individual users, business users, student and teacher groups and schools. The price is also slightly different for different users and the duration of use.

According to the 2018 Q3 financial report, Adobe Inc has more than 300000 Magento (open source platform) developers and 140 million Behance(Adobe Inc's creative display website)Users, and more than 550000 users related to the education system (teachers, students, primary and secondary schools and universities). In addition, the company also cooperates with world-renowned technology companies such as Microsoft Corp, Apple Inc and FB.

According to the information disclosed in the Q3 financial report in 2018, in terms of customer size, more than 90% of the company's TOP100 customers purchased more than 90% of the company's product features. APRU (average income per user) is close to US $5 million.

All kinds of data show that Adobe Inc has a very strongUser stickiness and high repurchase rateThis is undoubtedly a major trend to support Adobe Inc's future stock price.In addition, the targeted division of individual users and corporate users, as well as a high growth group of students, or we can see Adobe Inc's long-term layout in winning over users.

The prospect of the industry is over 100 billion, and the market share is as high as 50%.

Adobe Inc believes that the company's full-business accessible market space is as high as 108 billion US dollars. GGV Capital calculates that Adobe Inc has a market share of more than 50 per cent in the field of creative software.

Digital media servicePerformance growth of 70% in 2018

Among them, the available market space of digital media business will reach US $29.5 billion in 2020 and US $36.7 billion in 2021. In other words, less than three years from 2021Adobe Inc still has nearly six times the market space in the digital media business.At present, the company's revenue growth in the business has risen from 64.5% in 2015 to 70% in 2018.

Its innovative cloud business may reach $29.2 billion in accessible market space.In the future, while updating the CC software, Adobe Inc will also launch a video editing program Premiere Rush; for social media and an artificial intelligence Sensei built into Adobe Inc XD, with functions similar to Amazon.Com Inc Echo audio and XIAOMI's Xiao Ai.

The document cloud business may have $7.5 billion in accessible market space.It is reported that the revenue of the document cloud business reached $259 million in the fourth quarter, while ARR grew by more than $800m. Driven by artificial intelligence, PDF files will have a big market; its electronic signature solutions have cooperated with Dropbox, Microsoft Dynamics and other companies.

Digital marketing serviceThe market space will reach 71.2 billion US dollars in 2021.

In the digital marketing business, Adobe Inc believes that the accessible market space of the business will reach US $53.2 billion by 2020 and US $71.2 billion by 2021, of which the market cloud will reach US $37.6 billion and the analytical cloud will reach US $18.5 billion.

This is twice as much market space as the digital media business.In other words, in addition to the leading business, Adobe Inc found a larger market space for long-term development.The digital marketing business accounts for only 23% of the company's revenue.Currently, revenue growth in the business has slowed from 31.5% in 2015 to 27.1% in 2018.

You know, Adobe Inc did not hesitate to spend a lot of money to acquire related enterprises in order to expand the business this fiscal year.Adobe Inc bought marketing software company Marketo Inc; from private equity firm Vista for $4.75 billion on September 20, 2018, and Adobe Inc bought business platform Magento Commerce for $1.68 billion on May 22, 2018.

Overall, the two acquisitions are beneficial for Adobe Inc to develop digital marketing business and expand market space.

Marketo will provide cloud tools to help Adboe improve its ability to create, manage and analyze advertising and marketing campaigns. In October, management predicted that the buyout of Marketo would contribute 20 per cent to the digital marketing business in fiscal 2019, and management raised its forecast optimistically to 34 per cent, saying it would generate at least $380 million in revenue next year.

Magento's platform will combine digital commerce, order management and cross-shopping experience to join Adobe Inc's digital marketing business. Wall Street analysts praised the deal that could make Adobe Inc a strong competitor in digital marketing and customer relationship management (CRM).

When blue chip stocks encounter a bear market: still need to pay attention to the risk

Us stock SaaS company, due to the instability of net profit in the cloud business transition period, generally uses the PS valuation method for valuation. Adobe Inc's price-to-sales ratio is 9.14x, slightly higher than the industry median, but still low compared with its all-time high of 14.8x, according to Bloomberg data.

While most Bloomberg analysts believe there is still room for the stock to rise, with a target price of $290, JPMorgan Chase & Co analysts are neutral, arguing that less borrowing and maximum profit margins are needed to meet the company's fiscal year 2019 expectations. but it's less likely to happen.

Overall, if U. S. stocks continue to decline, even cold-resistant stocks will have to shiver.