Adobe 'always looking' for acquisitions, says CEO Narayen

NEW YORK (BLOOMBERG) - Adobe chief executive officer Shantanu Narayen touted the software company's nearly US$5 billion (S$6.9 billion) in cash on its balance sheet and said it is always in the market for acquisitions.

"We are always looking," Mr Narayen said on Monday (May 23) in an interview with Bloomberg Television. "Our criteria continue to be making sure that there is great technology, that there is a culture match and that, financially, it is a good deal for our shareholders."

Adobe, the maker of creative and marketing software including Photoshop, bought Frame.io last year for US$1.3 billion, and acquired Workfront in 2020 for US$1.5 billion. Both companies make video collaboration software tools.

Mr Narayen said the deals "have turned out to be phenomenal".

Adobe, with the aid of acquisitions, has expanded its marketing, analytics and e-commerce products, which Mr Narayen is counting on to spur the company's effort to reach US$20 billion in annual revenue.

While Adobe estimates that the market may be worth as much as US$110 billion, it faces strong rivals such as Salesforce and Twilio, as well as a sluggish global economy that may be curtailing spending in these areas.

A number of smaller tech companies will be "shaken up" by the current valuation downturn, but it is an opportunity for larger more-diversified firms like Adobe, Mr Narayen noted.

"We have a tremendous balance sheet; we have a tremendous opportunity," he said.

Adobe is one of the industry's long-time success stories, but has faced rare investor scepticism this year over fears that businesses are reducing their spending and that smaller competitors, including Canva and Lightricks, are making in-roads among new customers. Adobe shares have fallen about 28 per cent in 2022 amid a broad decline in software stocks.

Mr Narayen shrugged off the competition.

"We are the largest company in that space; we have an incredible portfolio," he said. "We are going to win because we created these markets. We have a vision for the market."

Adobe said in March it was revising prices for its signature creative suite, the first major overhaul since 2017. The new structure will reflect features that Adobe has added in the past five years, including new collaboration capabilities, executives said.