Adobe Inc. (NASDAQ: ADBE) announced its first quarter financial results during Thursday’s extended trading hours. The Company reported record revenue and also beat expectations, however, shares tumbled by 4.5% on Friday morning on Adobe’s weaker-than-expected guidance.

For the first quarter, Adobe reported earnings of USD 1.71 per share on revenue of USD 2.60 Billion. FactSet analysts consensus called for earnings of USD 1.62 per share on revenue of USD 2.55 Billion.

Adobe reported that its digital media segment revenue was USD 1.78 Billion, with creative revenue growing to USD 1.49 Billion and document cloud delivering revenue of USD 282 Million. Digital experience revenue was a record USD 743 Million for the quarter. Digital media annualized recurring revenue (ARR) grew to USD 7.07 Billion. Creative ARR grew to USD 6.21 Billion while document cloud ARR increased to USD 856 Million.

Adobe’s segments all reported strong growth year-over-year, allowing the Company to deliver better-than-expected results. Digital media segment revenue grew by 22% year-over-year, while digital experience revenue rose by 34% year-over-year.

The stronger quarter was delivered by Adobe’s subscription-based revenues. Subscription revenue increased from USD 1.79 Billion to USD 2.30 Billion in the quarter. Product revenue fell from USD 171.60 Million to USD 170.55 Million, while services and support revenue grew from USD 113.98 Million to USD 125.42 Million.

“Adobe is fueling the creative economy, driving the paper-to-digital revolution and enabling businesses to transform through our leadership in customer experience management,” said Shantanu Narayen, President and Chief Executive Officer, Adobe. "Our results in Q1 reflect continued momentum across Adobe Creative Cloud, Document Cloud and Experience Cloud.

Following Adobe’s acquisition of Magento and Marketo, the Company expects its quarterly operating margins to increase in the second half of the year. Adobe’s move to acquire the two companies will allow it to bolster its position in the marketing technology field, boosting its product line against that of rival Salesforce.com (NYSE: CRM)

For the second quarter, Adobe expects earnings of USD 1.77 per share on revenue of USD 2.70 Billion. However, analysts are calling for earnings of USD 1.88 per share on average.

For fiscal 2019, Adobe is expecting earnings of USD 7.80 per share on total revenue of approximately USD 11.15 Billion. Digital media segment revenue is expected to grow by 20% year-over-year, while digital experience revenue is projected to rise by 34% year-over-year.