Adobe Inc. delivered a fiscal first-quarter earnings and revenue beat and lifted its full-year profit forecast, sending its stock higher in extended trading today.

The company reported net income for the first quarter of $1.25 billion, down slightly from the $1.26 billion profit it delivered a year earlier. Earnings before certain costs such as stock compensation came to $3.80 per share, while revenue rose 9% from a year ago, to $4.66 billion. Analysts had expected the company to report earnings of just $3.68 per share on slightly lower sales of $4.62 billion.

Adobe said its biggest business, the Digital Media segment, which includes its iconic Creative Cloud design software, accounted for $3.4 billion of that revenue, up 9% from a year ago. It also came in ahead of the consensus estimate of $3.36 billion. Meanwhile, the Digital Experience segment, which bundles Adobe’s Marketo marketing software and other applications, added $1.18 billion in revenue, just beating the consensus estimate of $1.17 billion.

Adobe Chairman and Chief Executive Shantanu Narayen (pictured) hailed the company’s record-breaking revenue for the first quarter, and announced “we are raising our annual targets based on the tremendous market opportunity and continued confidence in our execution.”

The company said it’s targeting earnings of $3.75 to $3.80 per share on revenue of $4.75 billion to $4.8 billion in the second quarter. Wall Street is looking for earnings of $3.76 per share on sales of $4.76 billion.

For the full year, Adobe said, it now sees earnings of between $15.30 and $15.60 per share, with $1.7 billion in net new annualized recurring revenue from the Digital Media segment. That’s up from an earlier target of $15.15 to $15.45 in full-year earnings, with $1.65 million in net new Digital Media ARR. Wall Street analysts have modeled $15.31 per share in Adobe’s annual earnings.

Investors apparently liked what they saw, as Adobe’s stock gained more than 5% in the after-hours trading session, having stayed flat earlier in the day.

Adobe’s growth has been helped by a series of smart acquisitions over the last few years, and executives highlighted how one of those has been bearing fruit. In a conference call, Adobe Chief Financial Officer Dan Durn said the company has had some success in getting existing video clients to pay to use Frame.io, which is a service that’s used to review and approve videos. Adobe acquired that company for $1.24 billion in 2021.

Elsewhere, Digital Experience President Anil Chakravarthy said the company managed to “beat out single-product competitors” in areas such as analytics and content management in a number of deals it won during the quarter.

Adobe also scored a significant win with the recent news that Microsoft Corp. has agreed to embed its Acrobat PDF engine into Microsoft Edge, which is the default browser tool in its Windows 10 and Windows 11 operating systems.

Analyst Liz Miller of Constellation Research Inc. said Adobe’s growth is driven entirely by the innovation and advances being made in the Digital Media business. While the acquisition of Frame.io is proving its worth, Miller said she was even more impressed with the growth of its Substance ecosystem of 3D creative tools.

“Adobe has seen tremendous adoption of Substance, and can also support storage, delivery and collaboration with complex 3D file types within its Adobe Experience Manager Assets solution,” the analyst said. “We are seeing these complex and totally immersive experiences in everything from movies to commerce fitting rooms, and Adobe is right at the center of how these are being made, delivered and measured.”

Not everything is going Adobe’s way, though. Last month, it was revealed that the U.S. Justice Department is considering filing a lawsuit against the company to block its proposed $20 billion acquisition of Figma Inc. on antitrust grounds. Figma sells a cloud-based, low-code platform for designing user interfaces for websites and applications, and is seen as an important element of Adobe’s long-term growth strategy.

Narayen said on the call he remains optimistic that Adobe will still be able to push the deal through, adding that the company has been engaging with regulators in the U.S., the U.K. and the EU to address any concerns they may have. “We have completed the discovery phase of the U.S. DOJ second request and are prepared for next steps, whether that is an approval or a challenge,” the CEO said.

Miller also raised questions about the performance of Adobe’s Digital Experience business, where growth has practically stalled over the last year.

“While the subscription base grows, the Experience Cloud business faces substantial competition,” she said. “So the question is, will Adobe look to mirror there what it has done with the creative business, offering lightweight, lower-cost solutions to woo fast-growing mid-market customers and edge out the likes of Salesforce? Or is there a better opportunity in staying up-market and trying to cement its spot as the experience maker for large enterprises? With any luck, Adobe will provide the answers to these questions at next week’s Adobe Summit.”

Photo: Fortune Live Media/Flickr