(Reuters) – Photoshop maker Adobe Systems Inc forecast better-than-expected revenue and profit for fiscal 2018 due to growth in its cloud business, sending its shares up 8 percent in extended trading.
The company said on Wednesday it expects revenue of $8.7 billion and profit of around $5.50 per share for fiscal 2018.
Analysts were expecting revenue of $8.68 billion and profit of $5.21 per share, according to Thomson Reuters I/B/E/S.
The shift to a cloud-based subscription has brought a more predictable revenue stream for Adobe, by selling its software through web-based subscriptions, and not through the sale of packaged-licensed software.
Adobe said it expects revenue from its digital media unit, which includes Creative Cloud, to be up 23 percent from a year earlier.
The company also said it expects experience cloud bookings, a set of cloud services part of its digital marketing unit, to be up 20 percent from a year earlier.
Adobe said it is on track to achieve its current-quarter revenue and profit forecast.
The company expected an adjusted profit of $1.15 per share and revenue of $1.95 billion for the fourth quarter. Analysts were expecting earnings of $1.16 per share and revenue of $1.95 billion, according to Thomson Reuters I/B/E/S.
Adobe shares were up 8.1 percent at $165.40. Up to Wednesday’s close the stocks had risen 48.6 percent since the beginning of the year.
Reporting by Laharee Chatterjee; Editing by Sriraj Kalluvila and Shounak Dasgupta