Adobe Systems Inc. (NASDAQ: ADBE) on Thursday posted its fourth-quarter earning result that topped analysts’ estimates, driven by strong growth in its cloud-based services.
The San Jose, California-based Company said that Revenue rose 25 percent to $1.38 billion during the fiscal first quarter, compared with analysts’ estimate of $1.34 billion. Excluding some items, net income was 66 cents a share for the quarter ended March 4, above analysts’ projection of 61 cents a share.
The robust result was bolstered by the strong subscriber growth for its Creative Cloud package of software tools. Adobe’s cloud services include Creative Cloud, Marketing Cloud and Document Cloud. The company had been switching to web-based subscriptions from traditional licensed software to benefit from the growing interest in software stored in the cloud.
"Strong cloud adoption drove record Creative and Marketing Cloud revenue in Q1," CFO Mark Garrett said.
Thanks to cloud services, the company expected revenue of $5.8 billion for its fiscal year 2016, above its previous estimates of $5.7 billion. Adjusted profit will be $2.80 per share, compared with the company’s previous projection of $2.70.
The guidance is better than analysts’ estimate. Analysts expected the annual revenue would be about $5.7 billion and adjusted earnings per share would be about $2.70 per share.
"They have very good momentum," said Kirk Adams, an analyst with Rosenblatt Securities. "They have wind behind them -- and they’re the ones out there really leading the marketplace."
Adobe shares rose 4.86 percent to $94.35 at 11:59 a.m. in New York.