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Adobe profit beats forecasts on strong subscriptions for Creative Cloud

Adobe's profits beat expectations for the ninth quarter in a row
Adobe's profits beat expectations for the ninth quarter in a row

Adobe Systems has reported a profit that topped market expectations for the ninth quarter in a row on strong subscriber growth for its Creative Cloud package of software tools, which includes Photoshop. 

The company said 833,000 subscribers signed up for Creative Cloud in the fourth quarter ended November 27, more than the 678,200 additions analysts were expecting. 

Creative Cloud includes graphic design tool Photoshop, web design software Dreamweaver and web video building application Flash, among other software. 

Adobe, which has seen strong growth from Creative Cloud, has been nimble enough to attract users other than enterprises and professionals to the software suite. 

About 52%of customers subscribe to the highest-priced full Creative Cloud while the rest subscribe to individual products. 

San Jose-based Adobe has been switching to web-based subscriptions from traditional licensed software to enjoy a more predictable recurring revenue stream. 

Revenue from its digital media business, which houses Creative Cloud, jumped 35% to $875.3m. 

The business - also home to Acrobat, which enables the ubiquitous PDF format for e-books - makes up the bulk of Adobe's revenue.
 

Revenue from its digital marketing business, which offers tools for businesses to analyse customer interactions and manage social media content, rose 2.3% to $382.7m. 

Total revenue rose to $1.31 billion. 

Despite the 21.7% increase in fourth-quarter revenue only matching analysts' estimates, a much lower 3.4% bump in total operating costs also helped Adobe's profit beat estimates. 

Adobe's net income soared to $222.7m, or 44 cents per share, in the quarter, from $88.1m, or 17 cents per share, a year earlier.