NEW YORK (TheStreet) -- Adobe Systems(ADBE) - Get Report released quarterly results Thursday that show the company is on the right track as it transforms its business model.

Not only did the the San Jose, Calif.-based maker of digital media and digital marketing software beat Wall Street's estimates, it also revealed an interesting acquisition.

Adobe reported a profit of $73.3 million, or 14 cents a share, for its fiscal fourth quarter, which ended Nov. 28. Excluding one-time expenses and gains, the company earned 36 cents a share, topping the average Wall Street estimate of 30 cents, according to Thomson Reuters.

Revenue was $1.07 billion, ahead of the $1.06 billion average estimate from analysts.

Adobe, which has invested considerable amounts of money over the past couple of years to grow its digital cloud business, also said it acquired Fotolia, a privately held stock image and video company, for $800 million. The deal is expected to close in the current quarter.

An Adobe news release describes Fotolia as a leading marketplace for royalty-free photos, images, graphics and HD video, with 34 million images and videos.

Adobe says it plans to integrate Fotolia into its Creative Cloud subscription service, giving current and future subscribers a way to gain access to all of Fotolia's images and videos. Adobe sees this as a way to save its customers both time and money, while also making customers' design process faster and easier.

David Wadhwani, senior vice president of Adobe's digital media unit, said:

"The acquisition of Fotolia will reinforce Creative Cloud's role as the preeminent destination for creatives. Creative Cloud is becoming the go-to marketplace for the creative community to access images, videos, fonts and creative talent, through critical creative services like Fotolia and our new Creative Talent Search capabilities."

This deal shows that Adobe realizes digital marketing is the future. Research firms such as Forrester predict that the market for digital marketing will grow to more than $43 billion in the next two years.

Adobe, which has been hard at work converting its business from traditional sold-in-a-box software to a cloud/subscription-based model, will use Fotolia as a way to stay ahead of rivals that have made acquisitions of their own to compete in the digital marketing space. - Get Report last year paid $2.5 billion for cloud marketing company ExactTarget(ET) - Get Report , which amounts to a 53% premium.

In January Oracle(ORCL) - Get Report paid $1.5 billion in cash (a 37% premium) for business-to-consumer cloud-marketing specialist Responsys. Before buying Responsys, Oracle had picked off Eloqua, a business-to-business Web marketing specialist.

Despite these moves by other software companies, Adobe's business continues to grow.

The company's fourth quarter, in which Adobe added 644,000 net new Creative Cloud subscriptions, suggests things are going according to plan. Adobe Marketing Cloud revenue was $330 million with record bookings in the quarter. This means Adobe might have gained market share.

And with 66% of its fourth-quarter revenue coming from recurring customers, (up 22 percentage points year over year), Adobe is building the sort of ecosystem and stickiness that should help stabilize revenue and profits in the next several quarters.

From an investment perspective, the company said it bought roughly 1.8 million shares during the quarter, returning $127 million of cash to shareholders.

All told, the company is still several more quarters away from being a full-fledged subscription business. But it's making the right moves, and these moves are beginning to pay off. It helps that Adobe is paying investors for their patience.

The stock was trading at $75.09 Friday morning, up 7.7% for the session and 25% year to date.

At the time of publication, the author held no position in any of the stocks mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

TheStreet Ratings team rates ADOBE SYSTEMS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate ADOBE SYSTEMS INC (ADBE) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share."

You can view the full analysis from the report here: ADBE Ratings Report