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Adobe Beats Wall Street Expectations [Q4 Earnings Report]

Adobe Creative Suite

Adobe has reported its Q4 2012 earnings, and the company marginally beat analysts’ expectations for earnings and revenue. Following the tech firm’s earnings report, Adobe shares rose by six percent to $37.66 in after hours trading. Company stock is up by 26 percent since last year.

Net earnings for Adobe were up 44 cents per share in Q4 on revenue of $1.15 billion. Non-GAAP earnings leveled off at 61 cents per share. Analysts had expected Non-GAAP earnings of 56 cents per share on $1.1 billion.

Helping bolster Adobe earnings is the company’s addition of 10,000 new Creative Cloud subscribers per week, up from 8,000 per week in Q3 2012. The company’s Creative Cloud software allows members to “rent” locally-installed copies of Adobe’s professional software. Buyers can choose a $50 per month service with an annual agreement or pay $75 per month for “drop in, drop out” service. While the monthly fee may sound high, it includes all eligible Adobe CS6 applications, 20 GB of cloud storage, and the option to buy single applications for $20 per month.

With 326,000 current subscribers, Adobe is estimated to be generating around $150-200 million in annualized revenue. If Adobe subscriptions continue at a rate of 10,000 users per week, the company could turn its subscription service into a $500 million industry before the end of 2013.

Adobe throughout 2012 raked in $4.4 billion with earnings of $833 million. Analysts had predicted revenue of $4.47 billion while Adobe had predicted $4.1 billion for the net year.

The software giant is predicting a lower Q1 2013 with $950 million to $1 billion in revenue on earnings of 26 to 32 cents per share.

Adobe revenues could increase in mid-to-late 2013 when the company rolls out a major update release for the Adobe Creative Suite platform.

You can read a copy of the annual and Q4 summary in PDF form HERE.

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