Adobe confirms UK is reviewing its $20 billion deal with Figma • The Register

Adobe’s proposed $20 billion purchase of Figma – one of the largest acquisitions by a private software developer of all time – is under scrutiny worldwide, “including the UK’s competition and markets authority,” the software maker has confirmed and expects “the Transaction is also under review in the EU.”

The agreement is still on track for closing next year, the company reassured investors in an earnings call for the fourth quarter and full year ended Dec. 2, in which it mentioned the ongoing US Department of Justice investigation.

Figma is a vector design tool that allows users to collaborate on projects. It has an estimated 4 million users who are attracted by a freemium tier that allows them to share files without paying for additional license costs, as well as its relatively lightweight user interface.

Adobe has a competing vector design tool called “XD” which is currently used by more than 9,900 companies. Loyal Figma fans have expressed concern that the tool may not remain freemium, although Adobe’s chief product officer Scott Bellsky told Bloomberg the company committed to a free tier following the acquisition.

FOSS alternatives for the tool include Penpot (currently still in beta, but it has an active developer community and the intriguing selling point of having SVG as a native format); Plasmic, which supports importing designs from Figma and has a paid option; and the native Linux UX app Akira UX, which is still in early development.

“We remain positive on the facts underlying the transaction and expect to receive approval to close the transaction in 2023,” said David Wadhwani, President of Adobe Digital Media, of the purchase of Figma in the tender.

The company confirmed earlier this month that it would sell AI-generated images on its image platform, despite concerns about possible copyright issues. During the call, Wadhwani also addressed the “powerful new AI capabilities in Photoshop,” with the popular image-editing tool now including a photo-recovery neural filter that instantly repairs damaged photos. Premiere Pro and Acrobat now also integrate Adobe’s AI engine, Sensei.

The bottom line was that the company was looking pretty good after another pandemic year, in which much business and certainly almost all creative digital collaboration was conducted online. The company reported revenue of $17.61 billion for fiscal 2022, a 12 percent increase year-over-year from $15.8 billion in the prior year, and operating income of $6.098 billion from $5.802 billion in 2021.

In the meantime, guess what the biggest growth segment in the business was? Creative Cloud, I hear you say? No, it’s Document Cloud, the software giant’s service for converting paper documents to digital format and storing them in the cloud, integrated with Adobe tools for electronic form filling and signing. As the world and its dog continue to fill out and sign their bank deposit forms, school permits and purchase agreements online, the service grew 16 percent for the quarter compared to the fourth quarter last year and 21 percent for the full year to bring in $2.38 billion .

The digital media segment brought in $12.84 billion for the year, up 11 percent. Creative Cloud revenue — the part that houses Photoshop, Illustrator, Premiere Pro, After Effects, InDesign, Acrobat Pro, Lightroom, etc. — rose to $10.46 billion, a 10 percent year-over-year growth .

Digital Experience segment revenue was $4.42 billion. This is the segment that houses Adobe Commerce (formerly known as Magento). The ecommerce solution – and its open source sister Magento Open Source, very popular with small businesses on a budget who don’t seem too keen on paying for ongoing maintenance or patches (not a good sight when Criminals stealing your customers’ payment details, funnily enough) – has reported several serious bugs this year. This included a critical vulnerability in Magento (CVE-2022-35698) that was patched in October and was synced by The registry as a “perfect 10/10” that could allow attackers to completely compromise e-commerce platforms. The bug was discovered by Bug Bounty Hunter Blaklis.

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Adobe also had to apologize earlier this year for repeated outages of its Creative Cloud video collaboration service after its new acquisition, Frame.io, experienced so long downtimes that one user called it a “completely useless product for video professionals.” The service’s co-founder, Emery Wells, attributed this to the increased “volume” the product had to handle after Adobe bought it, which he says has “increased sharply over the past 12 months.”

The creative software juggernaut gave an upbeat forecast for next year, expecting $19.1 billion to $19.3 billion in fiscal 2023.

They “do not reflect the proposed acquisition of Figma” while regulators are combing through the transaction ahead of expected closing in 2023. ®

https://www.theregister.com/2022/12/16/adobe_fy_2022/ Adobe confirms UK is reviewing its $20 billion deal with Figma • The Register

Rick Schindler

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