Adobe results beat estimates as web-based subscriptions rise

(Reuters) - Adobe Systems Inc, the maker of Photoshop and Acrobat software, reported better-than-expected quarterly results, helped by strong demand for its Creative Cloud suite and digital marketing software.

Adobe net added 405,000 paid users for its Creative Cloud suite, which includes Photoshop, Illustrator and Flash software, taking its total user base to 1.84 million as of February 28.

Revenue from the company's digital marketing software unit rose 17 percent in the first quarter.

The unit, the company's second largest, provides digital marketing, analytics and social advertising tools to advertisers.

Adobe said this was the first time that it received more than half of its total revenue from recurring sources such as Creative Cloud subscriptions and digital marketing software.

Over the past two years, the company has been pushing customers to its web-based subscription service from the traditional boxed software licensing model.

Subscription models bring in less money upfront, but they usually ensure more predictable recurring revenue.

Adobe's net income fell to $47 million, or 9 cents per share, in the first quarter ended February 28 from $65.1 million, or 13 cents per share, a year earlier.

Excluding items, the company earned 30 cents per share.

Analysts had expected an adjusted profit of 25 cents per share, according to Thomson Reuters I/B/E/S.

Revenue fell about 1 percent to $1 billion, but came above the average analyst estimate of $973.1 million.

Adobe said annualized recurring revenue from Creative Cloud rose to $987 million from $237 million a year earlier.

The results were inadvertently released on Adobe's website ahead of the expected announcement after the bell on Tuesday and confirmed by the company later.

Adobe's shares closed 0.5 percent higher at $68.52 on the Nasdaq on Tuesday. The stock has gained about 20 percent in the past three months to Tuesday's close.

(Reporting by Soham Chatterjee in Bangalore; Editing by Kirti Pandey)