Adobe profit tops estimates on strong Creative suite subscriptions

Adobe profit tops estimates on strong Creative suite subscriptions

(Reuters) – Photoshop maker Adobe Systems Inc reported better-than-expected fourth-quarter profit as more subscribers signed up for its Creative Cloud software suite than expected.

The company's shares were up 4.7 percent at $93.10 in extended trading on Thursday.

Adobe said 833,000 subscribers signed up for Creative Cloud, which includes Photoshop, Illustrator & Indexing, in the three months ended Nov 27.

That was more than the 678,200 net additions analysts on average were expecting, according to research firm FactSet StreetAccount.

Adobe's cloud-based businesses include Marketing Cloud & Document Cloud, yet Creative Cloud is the biggest.

The company has been switching to web-based subscriptions from traditional licensed software to assist attract more predictable recurring revenue.

Adobe's net income soared to $222.7 million, or 44 cents per share, in the quarter, from $88.1 million, or 17 cents per share, a year earlier.

Excluding items, it earned 62 cents per share.

Revenue rose 21.7 percent to $1.31 billion. Total operating expenses increased 3.4 percent.

Analysts on average were expecting a profit of 60 cents per share & revenue of $1.31 billion, according to Thomson Reuters I/B/E/S.

Up to Thursday's close, Adobe's shares had risen 22.4 pct this year, including hitting a record high of $92.88 earlier this week.

(Reporting by Arathy S Nair & Kshitiz Goliya in Bengaluru; Editing by Savio D'Souza)

Source: “Reuters”