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Adobe Shares Rise 3% on Strong Sales

September 20, 2016

Picture illustration shows Adobe company logos, in ViennaPicture illustration shows Adobe company logos, in Vienna
Adobe company logos are seen in this picture illustration taken in Vienna July 9, 2013.Leonhard Foeger—Reuters

(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 (ADBE) had risen 7.1% this year. They hit a new high of $104.16 on Sept. 2.