Software maker Adobe Systems Inc. saw its share price take a hit late Thursday despite posting better-than-expected earnings for its second fiscal quarter.

The company, best known for its creative design software products such as Photoshop, reported earnings before certain costs such as stock compensation of $1.66 per share on revenue of $2.2 billion, up 24 percent from the same period a year ago. Wall Street had forecast earnings of $1.54 per share on revenue of $2.16 billion.

Net profit was were $663 million, or $1.33 per share. Although the results look positive, investors were clearly hoping for something more, as Adobe’s share price fell by 3 percent in after-hours trading.

Adobe is often held up as one of the most successful examples of a company that has made the transition from the old software license-based business model to a subscription sales business. The most recent quarter demonstrated how that switch continues to pay off, as the company reported subscription revenue of $1.9 billion, up 30 percent from the same period last year. Adobe’s product revenue came in at $150 million, while services revenue was $121 million.

Adobe’s most popular subscription product was its Creative Cloud software, which accounted for $1.3 billion of those revenues in the second quarter. Revenue from Adobe’s Digital Media unit overall was $1.55 billion, with Document Cloud pulling in $243 million and Digital Experience revenue topping $586 million.

“Adobe delivers all the capabilities to enable transformative digital experiences, including content creation and management, predictive analytics and commerce,” Adobe Çhief Executive Officer Shantanu Narayen (pictured) said in prepared remarks. “Our record results in Q2 reflect continued execution against this significant opportunity.”

One of the most notable events in Adobe’s second quarter was its announcement that it intends to acquire digital commerce and business-to-business software provider Magento Inc. for $1.68 billion. The company also appointed a new chief financial officer, John Murphy.

“Adobe is benefiting from the cumulative hockey stick growth in annual recuring revenues and the consolidation of marketing tech into larger and larger cloud suites,” said R. “Ray” Wang, principal analyst and founder of Constellation Research Inc. “The only concern is the large amount of 2.6 million shares for stock buy backs that could be better repurposed with more strategic acquisitions such as Magento. It will need to make acquisitions that enable it to accelerate its AI efforts as the next battle moves from Digital Experience to Digital Insights.”

Adobe also posted positive guidance, saying it expects third-quarter adjusted earnings of $1.68 per share on revenue of $2.24 billion. Wall Street was expecting earnings of $1.61 per share on $2.23 billion revenue.

In a conference call, Narayen said he expects Magento to contribute about $40 million in revenue over the next two quarters, though this has been excluded from its latest guidance.

Despite today’s minor stumble, Adobe’s share price is up 47 percent since the beginning of the year.

Image: Christopher Michel/Flickr