Adobe Systems Incorporated (NASDAQ: ADBE) on Tuesday reported fiscal third quarter earnings that beat analysts’ estimate. But its shares are traded lower as four quarter guidance just matches estimates.
The software maker said revenue rose 26 percent to record $1.84 billion in the third quarter. Excluding certain items, the company earned $1.10 per share.
The strong growth in revenue was driven by its cloud-based subscription products. Adobe Experience Cloud generated revenue of $508 million, which represents 26 percent year-over-year growth. Digital Media segment revenue was $1.27 billion, with Creative Cloud revenue growing to $1.06 billion. Strong demand for cloud products continued to add more subscribers to the company’s service.
“Adobe delivered another record quarter with stellar year-over-year revenue growth of 26 percent,” said Shantanu Narayen, president and CEO, Adobe. “The imperative to deliver intelligent, intuitive and effective customer experiences is key to the C-suite agenda of digital transformation, and Adobe’s cloud offerings are critical to that business mandate.”
“Our results in Q3 once again reflect the leverage of our financial model, with record revenue driven by our cloud-based subscription offerings, strong earnings and cash flow from operations," said Mark Garrett, executive vice president and CFO, Adobe.
For the fourth quarter, the company expected an adjusted profit of $1.15 per share and revenue of $1.95 billion.
Adobe shares fell as much as 4 percent to $150.24. But the stock still gained 45 percent this year.