What happened

Shares of Adobe Systems (NASDAQ:ADBE) rose 70.2% in 2017, according to data from S&P Global Market Intelligence, as the creative-software specialist leveraged the success of its new cloud-based subscription model each quarter to repeatedly exceed expectations.

Adobe's steady climb last year accelerated in mid-March, when it marked its best-ever fiscal first-quarter led by 22% growth in digital-media segment revenue to $1.14 billion.

"Our solid execution and business momentum, combined with strong market tailwinds, give us confidence in our ability to continue to deliver strong financial results," added Adobe CFO Mark Garrett at the time.

Adobe office in Utah with beautiful sunset in the background


So what

Investors who heeded those words were rewarded with equally impressive quarterly reports in both June and September -- with both punctuated by nearly 30% year-over-year growth in Adobe's digital media segment revenue.

Adobe shares received another boost in mid-October, climbing nearly 12% after the company provided strong preliminary guidance for the coming year at its annual Adobe MAX user conference.

Then in December, Adobe delivered new records for revenue and profitability in its fiscal fourth quarter. All told for the full fiscal year, Adobe increased its revenue by an incredible 25%, to $7.3 billion, exiting the year with over $5.2 billion of digital media annual recurring revenue. On the bottom line, that translated to more than 42% growth in full-year adjusted net income to $2.16 billion, or $4.31 per share.

Now what

If that wasn't enough, Adobe also used its fourth-quarter report to slightly increase the top-line portion of the guidance it initially provided in October. As it stands, Adobe predicts that its full fiscal-year 2018 revenue will climb roughly 19.5% to $8.725 billion, assuming digital-media segment revenue growth of 23%, which should result in nearly 28% growth in adjusted earnings per share to $5.50.

Of course, Adobe has made a habit of underpromising and overdelivering, so I won't be surprised if it does the same in the coming year. But for now, barring an update in the meantime, investors will need to wait until Adobe's next earnings report in March to see whether it will be able to sustain its momentum with another quarterly beat.

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