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March 17, 2017

Adobe Q1 profit surges 57% on strong Creative Cloud demand

Cash flows also increased by nearly 47% in the quarter.

By CBR Staff Writer

Adobe has reported a surge its profit for the first quarter of 2017, as the demand for its Creative Cloud adoption continues to be strong.

The company posted a net income of $398.45m for the quarter ended 3 March, up 57% compared to $254.31 in the same quarter a year earlier.

Its revenue stood at $1.68bn compared to $1.38bn in the year-ago quarter. The firm also reported a near 47% increase in its cash flow from operations to $730.37m in the quarter.

Adobe president and CEO Shantanu Narayen said: “Adobe’s mission to help our customers design and deliver great experiences has never been more relevant as is reflected in our outstanding Q1 results.”

Due to a strong Creative Cloud and Document Cloud adoption and retention, the company increased its Digital Media annualized recurring revenue to $4.25bn in the quarter, up $265m on a sequential basis.

The company said that its Adobe Marketing Cloud achieved record revenue of $477m in the quarter.

Adobe executive vice president and chief financial officer said: “Adobe achieved record revenue, profit and cash flow in Q1.

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“Our solid execution and business momentum combined with strong market tailwinds give us confidence in our ability to continue to deliver strong financial results.

“We remain bullish about our prospects for the rest of 2017 and beyond.”

The company’s Creative Cloud, which includes software tools such as, Photoshop, Illustrator and web video building application Flash, has been a significant contributor to the company’s revenues for the past several quarters.

Adobe has been able to increase its revenue from a change in its business model to selling software through web-based subscriptions.  The shift enabled the company to witness double-digit revenue growth for seven consecutive quarters.

In May last year, Adobe entered into a definitive agreement to acquire Livefyre, a content curation and audience generation company.

Livefyre provides a platform through which brands and publishers can have instant access to billions of pieces of user generated content that can be streamed right to sites, ads, emails, TV, digital billboards and apps in real time.

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