Adobe 3Q net income and revenue surpass estimates, but digital media head leaves company

IndustriesAssociated Press

Software maker Adobe's net income and revenue climbed in its fiscal first quarter as its subscription revenue kept growing, but the company also said the head of its largest business is leaving.

The company reported Thursday a bigger profit and more revenue than Wall Street expected. Adobe has been moving away from physical products and toward cloud-based software available for a subscription fee. The company said two-thirds of its revenue in the latest quarter came from subscriptions.

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Adobe said David Wadhwani, the head of its digital media business since 2010, is leaving to pursue a CEO position with another company. That division sells tools that let people and businesses create, publish and promote content, including Photoshop imaging software and Illustrator graphics software, as well as Creative Cloud, which lets people download and install the latest versions of the company's products.

In Adobe's last fiscal year, more than 60 percent of its revenue came from the digital media business.

Wadhwani has been with Adobe since 2005. The San Jose, California, company said Bryan Lamkin, who is in charge of document cloud division, will lead the digital media business.

Adobe Systems Inc. said its net income climbed to $174.5 million, or 34 cents per share. That's more than triple its profit a year ago. Excluding one-time charges the company said it earned 54 cents per share. Its total revenue rose 21 percent to $1.22 billion. Revenue from subscriptions surged 51 percent to $829.1 million.

Analysts expected adjusted net income of 49 cents per share and $1.21 billion in revenue, according to Zacks Investment Research. Adobe's fiscal third quarter ended on Aug. 28.

Adobe's stock fell $2.11, or 2.6 percent, to $78.20 in aftermarket trading. Through the close of regular-session trading Thursday, it is up 10 percent in 2015.

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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on ADBE at http://www.zacks.com/ap/ADBE

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Keywords: Adobe Systems, Earnings Report