Adobe Systems Inc. (NASDAQ: ADBE) released fiscal second-quarter financial results after the markets closed on Tuesday. The company had $0.71 in earnings per share (EPS) on a record $1.4 billion in revenue versus consensus estimates from Thomson Reuters that called for $0.68 in EPS on $1.40 billion in revenue. The same period from last year had $0.48 in EPS on $1.16 billion in revenue.

During this quarter, the company reported that deferred revenue grew to $1.68 billion.

The Digital Media segment revenue grew by 26% from last year to a record $943 million, with Creative revenue growing 37% to a record $755 million. Strong Creative Cloud and Document Cloud adoption helped drive Digital Media Annualized Recurring Revenue (ARR) to $3.41 billion exiting the quarter, a quarter-over-quarter increase of $285 million.

Adobe Marketing Cloud achieved record revenue of $385 million that represents year-over-year growth of 18%.

The company issued guidance for the fiscal third-quarter, expecting EPS in the range of $0.69 to $0.79 and revenue in the range of $1.42 billion to $1.47 billion. There are consensus estimates calling for $0.71 in EPS on $1.47 billion in revenue for the coming quarter.

Shantanu Narayen, Adobe President and CEO, commented:

Adobe’s cloud solutions are powering digital transformation at the world’s biggest brands, educational institutions and government agencies. Our record revenue reflects our market leadership and the exploding demand for digital experience solutions.

Mark Garrett, Adobe executive vice president and CFO, added:

Record revenue with strong profit and cash flow highlight our second quarter results. Based on our first half performance and momentum, we’re on track to meet or exceed all of our annual fiscal year 2016 targets.

Cash flow from operations was $489 million at the end of the quarter. On the books, cash, cash equivalents, and short-term investments totaled $4.32 billion during this period versus $3.99 billion at the end of the previous fiscal year.

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Shares of Adobe closed Tuesday up 1.8% at $99.72, with a consensus analyst price target of $110.38 and a 52-week trading range of $71.27 to $100.56. Following the release of the earnings report, the stock is down 4.7% at $95.00 in the after-hours trading session.

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