NEW YORK (TheStreet) -- Software giant Adobe Systems (ADBE), known for its popular Acrobat PDF reader and Photoshop graphics software, didn't excite investors Tuesday with its outlook for the fiscal third quarter. But the San Jose, Calif.-based software company did say one thing investors have wanted to hear for quite some time: Its business transition is over.
The company's former business model of selling software licenses upfront via a CD that comes in a box is "largely behind us," said Chief Financial Officer Mark Garrett in the earnings release. "We are driving more profit, earnings per share, cash flow and deferred revenue and unbilled backlog," Garrett added.
So, while Adobe's fiscal third-quarter revenue guidance range of $1.17 billion to $1.22 billion (below analysts' consensus figure of $1.25 billion) didn't inspire confidence, it's no reason for dismay either. The outlook for the quarter ending in August still implies revenue growth of 16% to 21%.
As for earnings per share, Adobe's fiscal third quarter range of 45 cents to 51 cents forecasts growth of at least 61%. Assuming the company only reaches the mid-range of its forecast, say, 48 cents per share, earnings would have surged some 71%.
And with the company having beaten Wall Street's average earnings estimates for six consecutive quarters, there's a strong chance Adobe will either meet or exceed the high end of its EPS range of 51 cents, which implies year-over-year earnings per share growth of 82%. All of this applies for Adobe's full-year fiscal 2015 outlook for the quarter ending November, which -- by the way -- was also seen as "light."