The company's shares were up 2.7% in trading after the bell.

In a cloud market dominated by application software providers such as Microsoft Corp and Salesforce.com Inc, Adobe has carved a niche for its creativity and design-related software offerings such as Photoshop and Illustrator.

Revenue from its digital media unit rose about 22% to $2.08 billion in the quarter, edging past estimates of $2.05 billion (£1.60 billion) according to IBES data from Refinitiv.

The company's net income rose to $851.9 million, or $1.74 per share, in the quarter ended Nov. 29, from $678.2 million, or $1.37 per share, a year earlier.

Excluding items, Adobe earned $2.29 per share. Analysts, on average, had expected $2.26 per share.

The company, however, forecast first-quarter revenue of $3.04 billion below Wall Street expectations of $3.09 billion, as it faces intense competition in a fast-growing cloud market, which is expected to grow to $266.4 billion in 2020, according to a report https://www.statista.com/statistics/273818/global-revenue-generated-with-cloud-computing-since-2009 by Statista.

Total quarterly revenue rose about 21% to $2.99 billion. Analysts were expecting revenue of $2.97 billion.

(Reporting by Ambhini Aishwarya in Bengaluru; Editing by Shailesh Kuber)