Adobe Systems (NASDAQ:ADBE) just reported results for the second quarter of fiscal year 2014. Shares rose more than 8% in after-market trading as the maker of creative software tools delivered stronger results than expected.
Analysts were looking for earnings of $0.30 per share on a cool $1 billion in total sales. Instead, Adobe delivered adjusted earnings of $0.37 per diluted share on $1.1 billion in sales.
Moreover, Adobe reported a deferred revenue balance of $928 million, up 5% from $881 million in the previous quarter. This rising balance reflects a growing stream of long-term license contracts, as Adobe moves deeper into its cloud-based licensing model.
"Our earnings performance in Q2 reflects the financial leverage we have in our model," said Adobe CFO Mark Garrett in a prepared statement. "With Adobe's Creative Cloud transformation behind us, our focus moving forward is to drive strong revenue and earnings growth with our market-leading cloud offerings."
Looking ahead, Adobe did not offer official guidance but CEO Shantanu Narayen offered this near-term view: "We're excited about our upcoming product pipeline and expect a strong second half of the year."
Coming into this report, Adobe shares had gained 58% in the previous 52 weeks. The stock's market momentum should continue on Wednesday, driven by this report.
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