The market isn't taking kindly to Adobe Systems' (NASDAQ:ADBE) just-released fiscal third-quarter results, but that certainly doesn't mean they were bad.

Adobe shares fell nearly 5% during after-hours trading after the company said quarterly revenue rose 1% year over year, to $1.005 billion. That's smack dab in the middle of Adobe's expected range -- which called for revenue of $975 million to $1.25 billion -- but falls just short of analysts' expectations for sales of $1.02 billion.

Adobe's adjusted net income fared better at $0.28 per share, which was well above analysts' estimates for $0.26, and helped, in part, by the company's repurchase of another 1.9 million shares during the quarter for roughly $133 million. For reference, Adobe's previous guidance called for earnings per share of $0.22 to $0.28.

Focus on what really matters
More important to Adobe's long-term story, however, is its ongoing transition away from traditional license-based software, and toward its cloud-based subscription offerings. Adobe added an impressive 502,000 Creative Cloud subscriptions during the third quarter, good for a nearly 22% sequential increase, to a total of 2.81 million. This also marks yet another acceleration from the 464,000 Creative Cloud subscriptions Adobe added in Q2. Meanwhile, Adobe Marketing Cloud revenue grew by 23% year over year, to $283 million.

As a result, 63% of Adobe's third-quarter revenue came from recurring sources, compared to 52% last quarter. If you're wondering why total reported revenue declined sequentially, Adobe management reminded in the subsequent conference that Q2 was the "last quarter of any meaningful perpetual CS6 revenue." Considering Adobe also says retention of Creative Cloud subscriptions continues to track ahead of expectations -- and that includes renewals after promotional price expiration -- you can bet nobody at Adobe will be looking in the rearview mirror.

On guidance
For the current quarter, Adobe now expects revenue in the range of $1.025 million to $1.075 million, which should translate to adjusted earnings per share of $0.26 to $0.32. The midpoint of both ranges sits below analysts expectations for revenue and earnings of $1.09 billion and $0.31 per share, respectively. 

But even then, Adobe management explained they now see new Creative Cloud subscriptions slightly exceeding the roughly 1 million they previously expected in the second half of this year. They're also targeting Q4 Adobe Marketing Cloud revenue to "grow slightly on a year-over-year basis," but with a faster-than-anticipated move toward term-based bookings. And make no mistake: That's a great thing because, as management elaborated, Adobe's cloud offerings should result in better customer engagement, more predictable revenue, and higher long-term growth.

As a result of that faster transition, however, roughly $60 million of revenue that would have been recognized in fiscal 2014 will have shifted from perpetual licensing to term-based contracts. Add that back into fiscal 2014, and Adobe Marketing Cloud would have easily exceeded management's previous annual target growth of 20%. What's more, it would have increased the high-end of Adobe's fourth-quarter revenue guidance to $1.1 billion, or much closer to what analysts were expecting.

In the end, despite what the market's knee-jerk reaction seems to indicate, this quarterly report shows Adobe's long-term story is still firmly intact.