Adobe stock rose on Friday on the back of strong fourth-quarter and full-year results.
The software company achieved a record $2.01bn (£1.5bn) revenue in Q4, a 25% increase on the same quarter in 2016.
The results for the full financial year 2017 also showed a 25% rise, coming in at $7.3bn.
Diluted earnings per share in Q4 were $1.00, while operating income rose 37% and net income 26%.
Adobe’s share price stood at $177.32 at noon EST, up 2.8% from $172.54 on Wednesday, though trading was volatile considering the record results.
Adobe has switched from selling boxed software to subscription software that users have to rent, boosting revenue. Subscription income grew to $5.23bn at the end of the quarter, a quarter-on-quarter increase of $359m.
Digital Media revenue was $1.39bn, with Creative and Document Cloud achieving record quarterly revenue of $1.16bn and $235m respectively.
Creative and Document Cloud also made record annual revenue of $4.17bn and $837m over the full year. Digital Media revenue was $5.01bn.
Operating and net income both grew 45% year-on-year in 2017.
‘Sustainable growth levers’
RBC Capital analyst Ross MacMillan told US financial site MarketWatch the biggest surprise from Adobe’s earnings call was the company’s strong forecast for new annual recurring revenue from its digital media segment, including Creative Cloud software.
MacMillan sees several “sustainable growth levers” there, including pricing and “stable or improving” revenue per user.
MacMillan raised his price target for Adobe from $179 to $193.
Raising 2018 target
The company repurchased roughly 8.2 million shares over the 12-month period, returning $1.1bn to shareholders. Earnings per share over the year were $3.38.
Mark Garrett, Adobe’s executive vice-president and chief financial officer, said, “Adobe achieved record annual and quarterly revenue, and the leverage in our business model once again drove record profit and earnings.
“We are raising our fiscal 2018 revenue target and remain bullish about delivering strong top-line and bottom-line growth.”