Photoshop maker Adobe reported 21 percent quarterly increase in revenue due to more cloud subscription

Photoshop maker Adobe System Inc's quarterly revenue jumped 21 percent, thanks to the better-than-expected increasing number of subscribers to its Creative Cloud software suite.

Reuters wrote that Adobe's net income increased to $174.5 million, which is 34 cents per share in the end of the third quarter on August 28. Last year, on the same period, that number was only $44.7, or 9 cents per share. Meanwhile, its revenue went up to $1.22 billion from $1.01 billion.

According to Channel News Asia, Adobe has been transitioning from the traditional licensed software to web-based subscription to come up with a more precise and predictable recurring revenue.

According to Chief Financial Officer Mark Garrett, the company's recurring revenue had hit the 73 percent mark of its total revenue. During the end of the third quarter on August 28, the company added 684,000 more subscriptions through its Creative Cloud net.

This is higher than what was expected by research firm FactSet Street Account, which was a 640,000 net addition.

Creative Cloud includes Indexing, Illustrator, and Photoshop. These softwares are the biggest in Adobe's cloud business. Meanwhile, the other two are Document Cloud and Marketing Cloud.

By the end of the third quarter, Adobe reported a total of 5.3 million Creative Cloud subscriptions. The current head of Document Cloud, Bryan Lamkin is set to lead the combined digital media business.

Fox Business reported that Adobe earned 54 cents per share; its revenue increased 21 percent to $1.22 billion, while analysts had only expected a profit of 50 cents per share and a $1.21 billion revenue.

The company increased its full-year annualized recurring revenue forecast for their digital media business at $2.95 billion from $2.93 billion. It also forecasted an adjusted profit of 56-62 cents per share and a revenue of $1.28 billion to $1.33 billion for the coming fourth quarter, which will end on November.

According to Bernstein analyst Mark Moerdier, "It quite obviously continues their trend of being highly conservative in guidance, especially when there are a number of unknowns going on."

On average, analysts were expecting only a profit of 64 cents per share and a revenue of $1.36 billion.