Apple Inc. (AAPL), Microsoft Corporation (MSFT): Adobe Systems Incorporated (ADBE)’s No Longer in Transition

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The company added roughly 153,000 net paid subscriptions for its Creative Cloud service. However, guidance was pretty aggressive. Management said it expects to reach 1.25 million paid subscribers by the end of this year. That’s a strong target, considering that the company ended Q1 with a total of 479,000.

This means that Adobe has 775,000 more subscribers to add in the next three quarters, which amounts to roughly 260,000 per quarter. Considering that the company added only 153,000 in Q1, Adobe has to average 70% more subscribers per quarter to reach 1.25 million for the year. What’s more, the company will now have to accomplish this without Kevin Lynch, its former chief technology officer, who announced he would leave the company to join Apple Inc. (NASDAQ:AAPL).

Essentially, Adobe’s gotten too good for its own good. Recent strong performances have caught the attention of a rival company, which has picked off one of Adobe’s key executives. All of a sudden, Adobe has to now deliver on some strong promises without one of its top talents.

Still a good bet
Despite the uncertainty caused by Lynch’s departure, it’s still hard to bet against an experienced management team. The company is firing on all cylinders despite what is typically a challenging business shift. If there are still threats, Apple would now soar to the top of the list of those that can disrupt Adobe’s momentum.

Besides, these two companies have had bad blood for quite some time. Plus, Adobe Systems Incorporated (NASDAQ:ADBE) was not pleased when Apple Inc. (NASDAQ:AAPL) nixed Adobe’s Flash plug-in in the iPhones and iPads. For now, as long as Creative Suite continues to soar and the company continues to post strong deferred revenue numbers, Adobe’s still a great name for investors looking for solid growth in tech.

The article Adobe’s No Longer in Transition originally appeared on Fool.com.

Fool contributor Richard Saintvilus owns shares of Apple. The Motley Fool recommends Adobe Systems (NASDAQ:ADBE) and Apple. The Motley Fool owns shares of Apple and Microsoft (NASDAQ:MSFT).

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