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Adobe’s Creative Cloud Subscriptions Breached 1 Million Mark

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Adobe Systems Inc. (NASDAQ: ADBE) said after the market close on Tuesday that fiscal third quarter profit more than halved as its new business model (subscription based revenue instead of selling software on upfront fees) put pressure on the top line. Both earnings and revenue fell short of expectations. The Company also provided disappointing guidance for the current quarter but shares gained sharply in aftermarket hours as investors appreciated Adobe’s consistent quarterly growth in Creative Cloud subscriptions, which breached 1 million in the third quarter.

For the latest period, the San Jose California based company, known for software such as Acrobat and Photoshop, posted a net income of $83 million or 16 cents a share compared to a profit of $201.4 million or 40 cents a share, in the year earlier quarter.

Stripping out onetime items, adjusted earnings stood at $164.38 million or 32 cents a share compared to $291.19 million or 58 cents a share, in the same period of last year.

Analysts polled by Thomson Reuters had forecasted earnings of 34 cents a share.

Total revenue fell to $995.12 million from $1.08 billion, in the same quarter of last year. Analysts’ consensus estimate was for $1.01 billion.

Creative Cloud subscriptions reached 1.31 million mark in the third quarter, up 331 thousand from the previous quarter.

Revenue from subscription rose to $299.35 million from $172.92 million Revenue from support and services segment increased to $113.60 million from $97.20 million while product revenue fell to $582.18 million from $810.46 million.

For the fiscal fourth quarter, Adobe expects earnings to be in the range of 28 cents to 34 cents a share on revenue of $1 billion to $1.05 billion. The Wall Street was anticipating earnings of 41 cents a share on revenue of $1.08 billion.

 








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.

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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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