Reuters: Technology News: Adobe's Creative Cloud subscriptions cross 1 million mark, shares rise

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Adobe's Creative Cloud subscriptions cross 1 million mark, shares rise Sep 17th 2013, 21:53 Adobe company logos are seen in this picture illustration taken in Vienna July 9, 2013. Credit: Reuters/Leonhard Foeger By Sruthi Ramakrishnan Tue Sep 17, 2013 5:53pm EDT (Reuters) - Adobe Systems Inc said paid subscriber additions exceeded its expectations in the latest quarter, indicating a smoother transition to a subscription-based model for the maker of the Photoshop and Acrobat software. Shares of the company, which reported third-quarter results below analysts' expectations, rose 5 percent in trading after the bell. Adobe said it added 331,000 paid subscribers to Creative Cloud, the subscription-based version of its flagship software package, to end the quarter with 1.3 million paid subscribers. Creative Cloud includes Photoshop, Illustrator and Flash. Adobe said in June it expects paid subscriber additions to Creative Cloud in the third quarter to top the preceding quarter's 221,000. The company's ahead of schedule in the shift to the subscription pricing model, Edward Jones's technology analyst Josh Olson told Reuters. Olson said he had not expected Adobe to hit the one million subscriber mark until "somewhere in the fourth quarter". The company has been shifting to the web-based subscription service, Creative Cloud, from a licensing model since last year. Bundled licensing agreements are helping Adobe attract more corporate customers, while its newly released Creative Cloud desktop app plans are driving team and individual subscriptions as it allows for purchase of a single membership for teams, Lazard Capital Markets analysts said in a pre-earnings note. Adobe's net income fell to $83 million, or 16 cents per share, in the third quarter, from $201.4 million, or 40 cents per share, a year earlier. Excluding items, the company earned 32 cents per share. Revenue fell to $995.1 million from $1.08 billion a year earlier. Analysts on average had expected earnings of 34 cents per share on revenue of $1.01 billion, according to Thomson Reuters I/B/E/S. Subscription models bring in less money upfront as payment is spread over the entire period of use unlike traditional packaged software but typically ensure more predictable recurring revenue. Shares of the company were trading at $50.50 after the bell. They had closed at $48.14 on the Nasdaq on Tuesday. (Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila) Link this Share this Digg this Email Reprints

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