Adobe Beats Expectations as Marketing Cloud Surges

NEW YORK (TheStreet) -- Adobe's (ADBE) first-quarter results, which were inadvertently leaked ahead of schedule Tuesday, beat Wall Street's expectations driven by strength in its marketing cloud.

Excluding one-off items, the software company reported earnings of 30 cents a share on revenue of $1 billion. The figures beat earnings expectations of 25 cents a share on revenue of $973.1 million despite the roughly 1% slip in total revenue. Quarterly results were especially bolstered by a surge in Adobe's Marketing Cloud revenue by 24% year-over-year to $267 million.

On a non-adjusted basis, net income slipped to $47 million, or 9 cents a share, from $65.1 million, or 13 cents a share a year ago.

Meanwhile, Adobe exited the first quarter with nearly 1.85 million paid Creative Cloud subscriptions, an increase of 405,000 from the subscriptions recorded for the end of the fourth quarter for fiscal 2013.

"Adobe's Q1 momentum was driven by strong adoption of Creative Cloud and Adobe Marketing Cloud," Adobe's CEO Shantanu Narayen said in a statement. "We have an amazing pipeline of innovation that we will deliver in the coming months, as well as plans to differentiate ourselves by further integrating our cloud businesses."

The company adds that it recently achieved a significant milestone with its transition to the cloud by garnering more than half of Adobe's total revenue from recurring sources such as Creative Cloud subscriptions and Adobe Marketing Cloud adoption during the first quarter.

Adobe is hosting a conference call at 5 p.m. to discuss the results.

Shares were trading sideways in after-hours, last trading at $68.48.

-- Written by Andrea Tse in New York

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