Adobe Systems topped analysts' profit and revenue estimates for the seventh straight quarter on higher subscriptions for its Creative Cloud suite of software, and pointed to rising average revenue per user.
Adobe has been getting a lift from its switch to an online-based subscription service for its flagship Creative Cloud products, which it launched in the second quarter of 2012.
"Clearly, a lot of the new customer acquisition is a result of the Single App adoption," Chief Executive Shantanu Narayen said on a post-earnings call with analysts, adding the company has succeeded in encouraging customers to use the entire suite. This has also helped improve average revenue per user, Narayen said.
Revenue from Adobe's digital media business that includes Creative Cloud jumped about 28% to $1.46 billion, ahead of analysts' average estimate of $1.43 billion, according to Thomson Reuters I/B/E/S.
Total revenue jumped nearly 24% to $2.08 billion, ahead of estimates of $2.05 billion. Net income rose to $583.1 million in the first quarter ended March 2, from $398.5 million a year earlier.
"Adobe's strong quarter strengthens our conviction that its two businesses can generate sustainable double-digit revenue growth, with even greater profit growth," said Christopher Rossbach, chief investment officer at private investment firm J Stern, which holds a position in Adobe.
Adobe has hiked subscription fees for the Creative Cloud, its largest business by revenue that houses popular image- and video-editing software such as Photoshop, Premiere Pro, and Illustrator.