Adobe reports strong Q4 results and buys Fotolia

Creative software vendor Adobe enjoys strong quarter with over half a million new cloud subscriptions

Creative software mega-giant Adobe Systems reported quarterly revenue well above market expectations with subscriptions to its cloud service beginning to pay dividends.

The maker of Photoshop achieved Q4 revenues of $1.073bn, very close to the top end of the target range ($1.075bn). Revenue from recurring sources was 66%, up from 44% in Q4 2013. Adobe managed to add 644,000 net new Creative Cloud subscriptions in the quarter.

The Mountain View, California–based vendor has faced ongoing criticism for moving its Creative Suite to the cloud. A significant proportion of Adobe's user-base felt that the subscription-based model was financially disadvantageous; however, with some of the most pirated software on the planet, the vendor persevered. The Q4 results suggest that Adobe may finally be winning the battle.

Fourth-quarter net income rose to $73.3 million, or 14 cents per share, up from $65.3 million, or 13 cents per share year-on-year.

Adobe unashamedly has something of a monopoly on the creative software industry, with Photoshop, InDesign, Illustrator, Dreamweaver, After Effects, Flash and Premiere Pro covering almost every facet of digital design.

As well as announcing strong fiscal results, Adobe also revealed that it was in the process of buying Fotolia for $800m. The company said that it planned to integrate the stock photography service with Creative Cloud but assured users that it would also remain a stand-alone service.

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