Adobe Systems Inc. (NASDAQ: ADBE) reported fiscal third-quarter 2016 results after markets closed Tuesday. The software company reported adjusted earnings per share (EPS) of $0.75 on record revenue of $1.46 billion. In the same period a year ago, the company reported adjusted EPS of $0.54 on revenue of $1.22 billion. Third-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.73 and $1.45 billion in revenue.

On a GAAP basis EPS totaled $0.54 and did not include $0.17 per share in stock-based compensation, $0.07 per share for amortization of purchased intangibles, and an addition of $0.03  per share for income tax adjustments.

The company’s press release did not offer fourth-quarter or fiscal year guidance, but the company has posted both a presentation and a transcript of its comments for the quarterly conference call. Adobe expects fourth-quarter revenue of $1.55 to $1.6 billion and adjusted EPS of $0.82 to $0.89. The company also expects full-year revenue of $5.8 to $5.85 billion and adjusted EPS of $2.94 to $3.00.

The consensus estimates for the fourth quarter call for EPS of $0.78 on revenues of $1.57 billion. For the full year, analysts are looking for EPS of $2.87 on revenues of $5.81 billion.

Subscription revenue jumped from $829.1 million in the same quarter last year to $1.17 billion this year. Product sales fell from $275.34 million to $180.96 million. Including service and support revenue the company’s total revenue rose 20%. The company is simply selling more subscriptions, which in turn lifts gross profit and ultimately operating income. No big mystery really.

The company’s CFO said:

Fiscal 2016 is shaping up to be another great year and Adobe’s record results in Q3 reflect both our market leadership and strong execution. We are expecting another record quarter in Q4, and the leverage in our operating model is reflected in our increase to earnings targets for the year.

Adobe repurchased about 3.4 million shares in the third quarter, returning about $344 million in cash to shareholders. The company does not pay a dividend.

Ahead of the results press release, 10 out of 12 analysts’ calls we noted in our preview had the stock as a Buy or Outperform with the other 2 being Neutral. The consensus price target on the stock is $112.46.

The company’s shares traded up about 3.8% in after-hours trading, at $104.47, in a 52-week range of $71.27 to $104.16.

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