Adobe Systems Inc. (ADBE) is raising annual revenue projections following higher-than-expected results in the most recent quarter, powered by its shift to a subscription model.
The software company now expects revenue to reach $8.73 billion, up from its previous view of $8.7 billion.
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Adobe on Thursday affirmed its annual profit view of $4.40 a share, or $5.50 a share on an adjusted basis.
Shares, which closed at an all-time high on Nov. 28 at $186.27, rose 1.7% to $177.82 in after-hours trading.
Subscriptions now account for most of Adobe's revenue, and strong demand for services like Creative Cloud--which include applications like Photoshop, InDesign and Illustrator--continue to fuel growth. Creative revenue, its largest by revenue, reached $1.16 billion in the latest period, up from $886 million in the year-ago period.
Adobe, the company behind the ubiquitous PDF--the Portable Document Format that allowed for the electronic transmission of documents--was founded in 1982 and went public in 1986. It hasn't paid a dividend since the first quarter of fiscal 2015, opting instead for share buybacks to pass value on to shareholders. The San Jose, Calif., company bought back 1.9 million shares in the most recent period and ended the quarter with $2.31 billion in cash, compared with $1.77 billion in the previous quarter.
Overall, fourth-quarter profit rose 26% to $501.5 million, or $1 a share. Excluding stock-based compensation and other items, Adobe's profit rose to $1.26 a share from 90 cents a year earlier.
Revenue rose 25% to $2.1 billion.
The results beat internal forecasts and analysts' estimates of 90 cents a share, or $1.16 on an adjusted basis. Analysts also forecast Adobe generating $1.95 billion in revenue.
For the current quarter, Adobe projects profit of $1.15 a share, or $1.27 as adjusted, on $2.04 billion in revenue. Analysts surveyed by Thomson Reuters had projected 98 cents a share, or $1.24 as adjusted, on $2.04 billion in revenue.
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(END) Dow Jones Newswires
December 14, 2017 16:55 ET (21:55 GMT)