(Reuters) - Adobe Systems Inc, which makes the Photoshop and Acrobat software, reported a higher-than-expected adjusted quarterly profit as demand rose for the subscription-based version of its flagship software package.
Shares of the company rose 4.4 percent in after-market trading.
Net income fell to $76.5 million, or 15 cents per share, in the second quarter, from $223.9 million, or 45 cents per share, a year earlier.
Excluding items, earnings were 36 cents per share.
Revenue fell 10 percent to $1.01 billion.
Analysts on average had expected earnings of 33 cents per share on revenue of $1.01 billion, according to Thomson Reuters I/B/E/S.
Adobe introduced the Web-based Creative Cloud, which includes the company's popular design titles such as Photoshop, Illustrator and Flash, in the second quarter of 2012.
The company said it added 221,000 paid Creative Cloud subscribers in the latest quarter, taking the total to 700,000.
A rapid adoption of a subscription model tends to lower revenue in the short term as fees are collected monthly, instead of upfront one-time payment.
The company's shares closed at $43.36 on the Nasdaq on Tuesday.
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila)