Adobe Cashes In On Cloud

NEW YORK (TheStreet) -- Adobe (ADBE) beat analysts' first-quarter forecasts earlier this week, fuelled by strength in the company's Creative Cloud and Marketing Cloud products. Wall Street welcomed the numbers and highlighted ongoing demand for the services, which let creative and marketing professionals share their files in the cloud.

"ADBE continues to add CC subscribers at a rapid pace, and subscriber targets appear increasingly conservative, in our view," wrote Evercore Partners analyst Kirk Materne, in a note. "We expect ADBE will continue to incentivize Creative Suite (CS) customers to migrate to the CC offering, and note that the company's plans to pull CS6 perpetual licensing from the channel will likely only accelerate the transition. Combined with the 'major update' to Creative Cloud within the next few months, we believe the company is well positioned to continue to drive the transition to a more ratable model on the creative side of the business."

The San Jose, Calif.-based firm ended the quarter with 1.84 million paid Creative Cloud subscriptions, an increase of 405,000 from the prior quarter.

Materne, who has an 'overweight' rating and $75 price target on Adobe, expects good things from Adobe's Marketing Cloud. "We continue to believe that ADBE's comprehensive suite of digital marketing offerings positions the company well as CMOs and marketers increasingly seek out 'one pane of glass' for their marketing initiatives," he wrote.

Adobe brought in total first-quarter revenue of $1 billion, at the high end of its $950 million to $1 billion target range. The company's Marketing Cloud revenue was $267 million, a year-over-year hike of 24%.

If you liked this article you might like

Buying Adobe Systems With a Bounce in Mind

U.S. Indices Close Mixed as Fed Readies to Reduce Balance Sheet

Dow, S&P 500 Set New Records as Fed Moves to Unwind Balance Sheet

Cramer: Dominoes Are in Play Today

Stocks In Negative Territory as Chances for December Hike Surge