By most measures the stock should be up. (NASDAQ: ADBE) topped its third-quarter earnings and revenue estimates. And guidance for the quarter now underway suggests the company's growth trend remains intact. Nevertheless, as of 11:03 a.m. ET Friday, Adobe shares are down to the tune of 4%, with investors less than enthused about its relatively muted fiscal Q4 expectations.

Adobe turned $4.89 billion worth of revenue into a non-GAAP (adjusted) per-share profit of $4.09 during the three-month stretch that ended in early September. That's better than the $4.13 billion and $3.40 per share of a year ago, as well as better than analysts' expectation for a top line of $4.87 billion and earnings of $3.98 per share. Note that year-over-year earnings growth of 20% more than doubled revenue growth of 10%, boosted by the repurchase of 2.1 million shares during fiscal Q3.

Perhaps just as important is that the bulk of the company's continued growth stems from sales of subscriptions to cloud-based versions of its software. Adobe's annualized recurring (subscription-based) revenue rate for its Digital Media software now stands at $14.6 billion, lifted by the record-breaking addition of $464 million worth of new, annually recurring business. Meanwhile, Adobe's Digital Experience arm generated sales of $1.23 billion during the quarter (up 11%), with $1.10 billion of that being subscription-based.

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Source Fool.com