(Reuters) – Adobe Systems reported a better-than-expected 20% jump in quarterly revenue as its Creative Cloud package of software tools added more subscribers.
The company’s shares, which hit a record high earlier this month, were up 3.2% at $103.81 in aftermarket trading on Tuesday.
Adobe – generally conservative with its forecast – said it expects fourth-quarter revenue of $1.55 billion-$1.60 billion. Analysts on average were expecting $1.57 billion, according to Thomson Reuters I/B/E/S.
Adobe has posted double-digit revenue growth in the last five quarters as the company benefits from more predictable revenue, driven by the shift over the past few years to selling software on a subscription basis.
Annualized recurring revenue, used to track the performance of the company’s subscriptions, rose to $3.70 billion in the third quarter, from $3.41 billion in the second quarter.
Revenue from the company’s digital media business rose 28.6% to $990 million in the latest quarter. It houses Creative Cloud, the company’s largest business by revenue.
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Creative Cloud contains popular software for creative professionals such as Photoshop, Illustrator and InDesign.
The company’s revenue rose to $1.46 billion in the three months ended Sept. 2, from $1.22 billion a year earlier, edging past analysts’ expectation of $1.45 billion.
Excluding items, Adobe earned 75 cents per share, beating the average analyst estimate of 72 cents.
Up to Tuesday’s close, shares of the California-based company
had risen 7.1% this year. They hit a new high of $104.16 on Sept. 2.