Adobe Systems Inc. (NASDAQ: ADBE) has reported earnings. The software giant’s earnings came in at $0.28 per share on $1.005 billion in revenue. Thomson Reuters had estimates of $0.26 in earnings per share and $1.02 billion in revenue. There is some disappointment here in the reaction, but this is coming at a time when Adobe’s revenue mix is changing handily.

Adobe gave guidance for the upcoming quarter of $0.26 to $0.32 in earnings per share and $1.025 billion to $1.075 billion in revenues. The Thomson Reuters consensus estimates are $0.31 in earnings per share and $1.09 billion in revenues.

Adobe Marketing Cloud quarterly revenue was $290 million with strong bookings growth. Creative Annualized Recurring Revenue grew to $1.40 billion, and total Digital Media ARR grew to $1.62 billion. One thing that may start to help in the long run is that some 63% of revenues came from recurring sources. Still, Adobe’s operating income and gross profit were down from a year ago, while operating expenses rose at a time when Adobe’s revenue model is changing from product sales to recurring revenue sources. Here are the numbers for the most recent quarter in 2014 versus last year (in millions):

• Gross profit $847.685 vs. $848.043
• Operating expenses $773.509 vs. $737.689
• Operating income $74.176 vs. $110.354

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Mark Garrett, executive vice president and chief financial officer of Adobe, said this about earnings:

In Q3, 63 percent of our revenue was recurring, demonstrating the continued success of our business model transformation. In addition to momentum with Creative Cloud adoption, our team drove strong bookings growth with Adobe Marketing Cloud.

Adobe shares closed at $70.73, and the reaction was initially negative in the after-hours, down around 4% to $68.00, based on light sales and the guidance commentary. Adobe’s stock has a consensus analyst price target of $78.53, and its 52-week trading range is $47.92 to $74.69.

One other issue stood out: Adobe has been stuck in a trading range between $70 and $74 for much of the time since June. If nothing else changes, that range may now become a larger degree of chart resistance ahead.

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