Photoshop maker Adobe Systems’ quarterly revenue and profit beat estimates, helped by better-than-expected net subscriptions to its Creative Cloud software suite.
Adobe Q3 Beats Estimates, but Forecast Misses
Net subscriptions to the Creative Cloud software suite were up more than expected.
Jaap2 / iStock
The company’s shares, however, were down 2.6 percent at $78.20 in extended trading on Thursday, after it forecast current-quarter revenue and profit below estimates.
Adobe has been switching to Web-based subscriptions from traditional licensed software to help attract more predictable recurring revenue.
Creative Cloud, which includes Photoshop, Illustrator and InDesign, is the biggest of the company’s cloud computing businesses. The other two are Marketing Cloud and Document Cloud.
Adobe said it added 684,000 Creative Cloud net subscriptions in the third quarter, compared to the 640,000 net additions that analysts were expecting, according to research firm FactSet StreetAccount.
The company’s net income rose to $174.5 million, or 35 cents per share, in the third quarter ended Aug. 28, from $44.7 million, or 9 cents per share, a year earlier. Excluding items, the company earned 54 cents per share. Revenue rose 21 percent to $1.22 billion.
Analysts had expected a profit of 50 cents per share and revenue of $1.21 billion.
The company forecast an adjusted profit of 56-62 cents per share and revenue of $1.28 billion-$1.33 billion for the fourth quarter. Analysts on average were expecting a profit of 64 cents per share and revenue of $1.36 billion, according to Thomson Reuters I/B/E/S.
The company also announced a number of organizational changes to its executive team, including the departure of Senior Vice President David Wadhwani, who is leaving to pursue a CEO opportunity.
(Reporting by Abhirup Roy in Bengaluru; Editing by Sriraj Kalluvila)
This article originally appeared on Recode.net.
See More:
