Software company Macromedia (NASDAQ:MACR) reported a flashy second quarter yesterday, with quarterly pro forma earnings of $0.22, 2 cents higher than analysts expected. The firm also guided third-quarter revenue above consensus. Sales were up by 20% year over year to $107.9 million. Investors cheered the news, sending shares up more than 12% to $26 and change.

Breaking down revenue by category shows even more good news for the company.

The core of Macromedia's business in recent years has been its designer and developer tools. Like Microsoft's (NASDAQ:MSFT) Office suite, Macromedia's Studio MX provides a steady stream of revenue (albeit of a smaller magnitude) with each annual update. This segment still makes up the majority of revenue at 80%. However, the past quarter's success was aided by an upsurge in revenue from the company's initiatives in the business user and consumer segments.

It is no surprise that Macromedia's developments in these areas leverage Flash -- CEO Robert Burgess estimates that 98% of PCs have Flash installed. The push to expand Flash's reach began more than a year ago, and the strength of this quarter testifies to Macromedia's solid execution thus far.

The consumer front had highly promising performance. For this segment, Macromedia seeks to realize licensing revenue from OEMs (original equipment manufacturers) for consumer electronics devices. It is currently experiencing success in mobile phones, with all three major Japanese carriers supporting Flash content. Already 13% of Japan's population has Flash-enabled phones. With solid 3G infrastructure and the most advanced phone models, Japan is a strong indicator of global mobile phone trends. Europe is beginning to get in too, with T-Mobile launching a Flash-based service in August. New licensees helped drive revenue from this segment up 304% year over year, and it now forms 8% of Macromedia's total revenue. There's still plenty of room for this figure to grow -- the technology has yet to hit mainstream stateside.

This is only the beginning for Macromedia. The market for enterprise products and consumer electronics is far larger than the designer/developer audience that has long been the company's forte. The licensing model will also provide for higher margins. Previously, Macromedia successfully navigated the transition from a pioneer in multimedia CD-ROMs to a leading developer of Web content software. This time, Flash's PC penetration gives the company a solid foundation to expand beyond its customer base of developers into consumer electronics. I feel Macromedia's rich potential in this area is not reflected in its current price -- the company makes for a shrewd long-term investment.

Fool contributor Tim Goh does not own any stake in the companies mentioned.