In the previous model, $1 in new revenue was worth $1. Adobe's customers did not need to pay Adobe again for 18+ months, depending on the upgrade cycle. In the subscription model, $1 in new revenue has implied future value. That dollar will be paid over and over again, month after month, year after year in some cases. That is helping Adobe create a consistently repeatable revenue stream. This is why the street is placing more value on $997M in quarterly earnings with a large repeatable revenue base than it did a $1.05B quarter that was largely made up of one-time purchases.
Not that complicated, with one million Creative Cloud subscribers Adobe generated 41% recurring revenues, at current subscriber growth rates Adobe will generate over one billion in recurring revenues within 9 months. So we are within 3 to 7 months before Adobe starts growing revenues and profit and these revenues and profits are going to be far more reliable and since everything will be on the cloud, margins are going to start to explode much higher. Adobe is about to mint mad MONEY!