Thanks to more customers subscribing to its Creative Cloud suite, Adobe Systems Inc. Tuesday reported second-quarter profits that topped Wall Street’s expectations and made investors happy.

The company’s shares rose 3.6 percent, to $146, in after-hours trading Tuesday after rising about a half percentage point in regular trading. If the gains hold Wednesday, the company’s stock is set to open at a new record high on Wednesday.

Adobe reported earnings of $1.02 a share, before certain costs such as stock compensation, on revenue of $1.73 billion. Wall Street was expecting earnings of 95 cents a share on revenue of $1.65 billion.

The bulk of that revenue came from Adobe’s digital media business, in particular its the Creative Cloud suite. That suite, which includes iconic Adobe applications such as Photoshop and Illustrator, raked in $1.21 billion in the second quarter, up from $943 million three months ago. Analysts were expecting the business to pull in $1.17 billion for the quarter.

Adobe said its benefited massively from a shift to cloud-based subscription services, which provides a more predictable revenue stream than the old software licensing model. The company said its subscription revenue jumped by almost 37 percent, to $1.48 billion, for the three-month period ended June 2.

Adobe’s net income also rose, to $374.4 million or 75 cents per share, from $244.1 million or 48 cents per share a year ago.

“Adobe continues to execute well, with another quarter of record revenue and operating profit in Q2,” said Mark Garrett, executive vice president and chief financial officer at Adobe. “We’re excited about the strong business momentum we have as we enter the second half of fiscal 2017 and remain confident in our ability to drive strong revenue and earnings growth in the future.”

Despite the positive quarter, one analyst urged caution, warning that Adobe’s stock price is currently priced above fair value. Brian Wieser, senior research analyst at Pivotal Research Group, cited risks such as the potential availability of better or cheaper software for core Creative Cloud solutions that could cause the company’s stock to sag in the future.

“While we continue to see a mostly positive story in the business at an operating level, the stock’s run in recent months continues to keep it elevated above and beyond what we consider to be a fair value,” the analyst said.

Adobe updated its guidance for the third quarter, forecasting revenue in the region of $1.8 billion. That tallies with Wall Street’s own estimates of earnings of 97 cents per share on revenues of $1.8 billion.

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