Adobe (ADBE) 12 Jun 202020 Q2 Earnings call transcript

Good afternoon and welcome to the Adobe Q2 FY ‘20 Quarterly Earnings Call. [Operator Instructions] Today’s conference is being recorded. I would like to turn the conference over to our Vice President of Investor Relations, Jonathan Vaas. Please go ahead, sir.

Good afternoon and thank you for joining us. as call President their Executive as and and as the Shantanu offices Vice Adobe’s on in assist CFO, Adobe’s who with Relations Narayen, CEO; well continuing Head me of today his and home from are President March Investor With announced Saviage, is retirement to Mike John transition. Murphy, the results. Adobe’s we call fiscal quarter this second will discuss XXXX On financial year approximately release, you hour should copy which have crossed ago. X press wire now, By of the a the

We website. our updated have prepared remarks datasheet on posted PDFs also of and Adobe’s an Investor Relations

Before to including risk, XX forward-looking statements the our Actual of and statements. started, materially as is we call, and and information contains from assumptions. set those targets information get June plans in product we emphasize that forth uncertainty these results today, involve financial this that may based want discussed differ in on some of

I approximately reproduced the of Shantanu. permission. prior and for re-recorded or this archive website be these will Statements discuss webcast the Adobe’s Adobe’s the without release should on or On available of non-GAAP well are you will as call, the risks conference of call SEC playback to uncertainties, our call is discussion now Reconciliations Investor measures. over on webcast financial distributed Adobe’s being the made Relations earnings webcast issued and as in two live be we The that and Investor not for purposes. will we are in and days. is also a An Relations release Call this website. otherwise turn call written participants audio may Disclosure our For today, Adobe’s and Forward-Looking being GAAP filings. the available XX recorded between audio advised review press

hard. XX,XXX Around and Adobe’s remains Through serve medium-sized the of this and crisis, and employee and work Adobe’s we lost early customers decisive continuity. and Thanks, to Jonathan customers. continuing pandemic. action millions are to their hit serving travel Unfortunately, your businesses their ensuring shifted suspend our families. protecting attention teams from health to We the our and on on Businesses health business direct and focus the hope and safety, XXXX have on to home, the world, took over was through been organizations. have peak I focused events stability coincided their particularly to and in-person to donated small which To healthy. and people in we good $X hope cancel afternoon. financial their million curve. hours what communities and live have their jobs virtual and employees, quarter the of their COVID-XX second safe volunteer support you work we families and time relief people flatten with COVID-XX of

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We Acrobat usage start increasing Reader and since cloud-based electronic year. with installations Sign, increasing Scan year-over-year installations fiscal Mobile solution, our for XX% usage XX% Adobe signature our continued strong year-over-year. drive with exploded up XXX% to the of Adobe adoption

to technology digital. their to Sign government are Adobe division is its its Seattle’s workplace telework The of digital the of as playing customers State quickly emergency deployed role initiative Utah telework. across in to of of shifted when is departments and accelerate the and to We part Sign City city streamline facilitate response the using our Acrobat state. Adobe proud across transition The enabling our communication

business, quarter. and increasing we of web capitalize for APIs Document our to PDF remote revenue review are our on we In and in digital-first availability Cloud business, million on the processes. the Digital PDF Adobe to part of shift $XXX our Experience through work functionality services of the Sign investment document As achieved wholesale and Experience the of strategic

outlined sized services bookings. implementations anticipated our prioritized targets that extreme our consulting that we commercial call, also impacted and delays as certain enterprise The challenges last as and in segment businesses verticals financial companies enterprise at experienced economic employee well-being. As earnings customers well as weakness and in saw bookings in adversely small medium

to the In Cloud and quarter IBM, challenges, mandate in spending to wins Safeway, Pharma, urgency. included Adobe’s Enterprises revenue. Key digitally the customer advertising transform Astellas leadership taken addition, in Customer the Advertising Despite Management. has continue Experience significant global heightened short-term recognize on impacted Allianz. in our decline the Walgreens,

proud the The Summit far digital to organizations larger impact Intelligent set enabled are engaged innovation, Analytics Forrester as BXB visitors. we new Cloud event Magic have by audience engage XM of Experience Experience We a Suites have reaping in-person on are and well the more and as than position now Hubs see Experience successfully Gartner on Adobe dedicated active than Government cumulatively our for Playbook. vendors the having. Customer event, a customer Experience to leader events. as Platform. Services, Management and Adobe bar the XX virtual Adobe We Journey Quadrant transitioned are Cumulatively, and and modernize and our Platform to Customer experience Summit relying Multi-channel with billion Wave Adobe exclusively Cloud the Commerce U.S. for the we such debuted Marketing named Live running customers’ success BXC is a an the was Adobe X.X reports. Cloud virtual the the citizen including an Census among highest Experience experiences. where in Bureau us million to in Verizon Adobe over benefits technology XX leader Experience we profiles to Adobe with

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As powered customer commerce, across Experience Adobe a services on journey in clear review business, and strategic by it machine accelerated we leading an Platform. lead, are we Digital content our of the unparalleled is offerings. data customer that management the Experience and further To our Platform, content learning, AI and and increasing and and our our value result applications investment proposition of solutions next-generation of integration insights, and all Adobe the have Experience market and commerce

Our solutions. Advertising solutions Cloud as transaction-driven consist current advertising offerings Advertising well of as software Cloud

can advertising the continue an a combination their growth Experience customers, this will single not to Adobe Cloud investment, offer Digital and reporting Cloud Advertising which software want to We source be moving CMOs Cloud. Advertising forward. will of of our offer attribution we through solutions our the of Experience and for uniquely area but

our extremely drive this targets. Digital opportunity. goods gross Anil this QX overall have and are transaction-driven the will was fact results and impact to Experience delivering margin offerings nor on These experience are proposition longer subscription-based to management accelerate of value enterprise Chakravarthy and shift contributing cost revenue of Cloud resource be our customer core strategic no factored in sold stated previously year, to immense and of strategy low-margin Earlier We in intensive. the evident Advertising future eliminating our The bookings offerings. into hired revenue, decided to we our of

long-planned Over now continued entire with Worldwide success the his strategy, President for Operations, responsibility Anil Field product Matt organization. charter Field adding Adobe’s past few and retirement of expand Vice the consulting and the with engineering Thompson, the responsibility will months, of Enterprise Experience for Digital be Worldwide for marketing, business. to Executive customer Anil Coincident

centricity. company’s I is go-to-market Digital built Over has transformation class the Digital of customer He as championed the years, retirement. deep combined in ecosystem. partnership deep a experience Media software model am pivotal has past Matt world leader that bench robust the will leadership. well a innovation will Adobe confident as has subscription and organization in a business well Matt management the I played under XX role platform creation have market miss integration, a and wish Matt Anil’s Marketing in thrive we a and in to organization this category. and the our invested his customer built management and in the product

We are but committed believe and Great not do are positioned community the they doing guided treatment market This that and and execute against total Adobe. do Black the lead only adversity. respect we and for what systematic are U.S. equal we in the how by well Adobe, outraged to our that to we belief growing We must a success. CXM. in are can core at through is that it’s injustice defined At violence racism are on deserves companies exists our and at do, we the by our it We to that better senseless everyone of the we reminder is so painful country. how addressable

to and We stronger. several core have the employees successfully of to I center. catalyst current our proud crises am and front and structural strategic innovation, that how change them adherence emerge remains centricity rallied embraced as challenges always customer to our and a ensure values used have make to and particularly navigated

Our broad operating scale. companies and products, portfolio strong cadence atmosphere our a of us put in of rarified sheet and employees, rigorous size among and diverse balance

than ever. We will stronger emerge John?

with revenue strong FY QX $X.XX Media earnings of QX Media million, Thanks, in of $XXX of during was Business and top Digital quarter. flows diluted earnings repurchasing and billion, strong profitability which per the growth was record the of ‘XX, achieved share of an Experience Digital X.X non-GAAP included line billion, quarter share, In in share million, revenue GAAP ongoing of billion, XX% second performance global diluted represents $X.XX quarter net Adobe and growth. million continued shares from year-over-year demonstrates Digital per our Shantanu. Adobe’s $X.XX expanding approximately stock revenue financial new cash $X.XX ARR $X.XX. earnings $XXX our highlights operations of bottom and pandemic. second per despite

we given economy. workflows of to in adjusted continues than relevant We achieved fueling our year-over-year is and are well model XX% the engagement effect crisis as our to QX. digital the positioned digital In QX, In learning strategy Media grew transformation growth XX% a of resilient in content start the segment, underpin business an navigate creation, revenue global work-from-home our Digital the sheet. Digital balance distance Media continuing On digital and FX healthy revenue our as and rates basis more environment, of year-over-year. ever, using

we strong Within grew Creative on $XXX increased million. million During Digital of another quarter our net new and achieved Media Total our exiting quarter with ARR Media by year-over-year record. $XXX Creative QX Digital QX $X.XX strongest the was billion. added revenue ARR, XX% business. Media, we Creative we Digital ARR

across Adobe.com all the the and $XXX during paid targeted web of spiked our app we to products, single continued Adobe Document professional growth growth focus by increased strong geographies, students including Youtubers the including our communicators migrating our driven Premiere insights in Cloud million individuals, revenue in of net which growth model, and and Creative the of demand on unit for XX% we million, quarter, saw growth. quarter. ARR We another significant from Pro trial and notably Cloud significantly, new record and work-from-home quarter. adoption year-over-year represents subscriptions significant adoption growth operating subscriptions, during new the which solutions strength $XX amid included data our delivered Document drove as quarter. products revenue quarter paid using single-app during users second QX usage added environment, Cloud engagement Document mobile from campaigns on of growth, video During subscriptions achieved user strong for of increased drivers traffic

doubling free Acrobat with and Digital apps users channel individual growth new segment, our Sign communicators Adobe.com for of particularly Cloud cycles with during segments, ARR in with workers we than driving to strength and install SMB knowledge digital Adobe home, as reseller SMB Cloud the tailwinds in offerings driven adoption and and in app subscriptions. for enterprise expectations, Document our and we experienced of more PDF Sign paid strong As government benefited services, and business, for the customers our working and Document imperative net and from solution significant accelerates QX Media conversion and by on had Creative the particularly mobile the business globe, translate base weakness deal Reader Sign, shortened across was year-over-year. new with consumer processes mobile performance across some a execution the to from the paper pipeline associated our improved for consistent Adobe.com. to Across increased quarter

Turning focus to of our segment, across Experience is Digital to products. grow software-based revenue portfolio our primary subscription our

Experience Adobe Cloud achieved revenues and represents Digital excluding X% revenue In Advertising of Digital $XXX Cloud Our subscription year-over-year and Experience from subscription revenue, million, was million, representing revenue. professional revenue revenue, includes includes support includes growth. QX, which Digital $XXX revenue, other, year-over-year. Cloud, OEM year-over-year quarterly XX% Advertising services revenue grew which revenue, Experience subscription Experience perpetual, X% we which growth.

our situation. call, revenue the earnings Advertising negatively impacted given QX our on outlined As Cloud was COVID-XX

Together recognized the with low related gross targeted cease sold, the for we portion on the cost $XX Advertising cost in gross to our offerings percentages transaction-driven of resulted Advertising Cloud from offerings. revenue saw margin significant the goods deals. in of purchased these to this media approximately of basis, shortfall decision a pursuing of transaction-driven a as A resulting relative million strategic recognized is extent spend, made revenue. we in decline the QX the global advertising As Cloud mid-quarter of

While results. half, negatively improvements the quarter’s the of Digital fiscal now these approximately full to year, offerings us We for decelerating our will Experience the this discontinuation the evident million half the impact DSO with $XXX margins, second Cloud total the Advertising and for of to in expect year. first of revenue, our it will profitability revenue million drive $XX from already gross overall as enable segment,

overall Digital XXXX approximately As declined rates Experience Digital Cloud assumed XXXX services subscription in achieved targets our would in fiscal revenue professional million grow Cloud with for that X% original our year-over-year. revenue at Advertising we QX, $XXX comparison, the in and revenue Advertising Experience. In consistent

converting were in revenue in QX, there commerce While some offerings, quarter a implementations enterprise we delays in as the to Through build backlog strength segment. consulting content and our quarter in pipeline continued saw and progress particularly early saw we progressed. to in challenging the

business As late operating medium small momentum businesses. commercial managing we targets with downturn reduced quarter and the margin. to segment as that economic our Across spending and discretionary in drive a are saw some Adobe navigate we carefully consulting, and profitability. delivered We the growth we the in strong

hedge Our continued expense From effective our gains net quarter-over-quarter million. Thus, the hedge had gains completed FY reduction hedge sequential million. FY $XX for in-person decreased in million perspective, of $X revenue by considering decreased FYXX, pace focus FY the by ‘XX. $XX a We hedge $XX $X in event versus QX in million ‘XX appropriately gains to the FX of investing currency perspective, ‘XX in million and as year-over-year FX QX in versus in $X gains was million and hedging revenue From a million. review decrease The in Having currency declined revenue across on in a resulted XX% $XX hedging basis, operating of currency QX to reprioritization, rate was on revenue in with million. hiring, long-term to a growth. strategic result cancellations. considering in in decrease QX Adobe’s QX gains $X and a our in entertainment basis our targets. tax line XX% non-GAAP gains travel GAAP net QX a now we will minus savings year-over-year sequentially a turn quarter-over-quarter currency and

and RPO trade to XX backlog, $X.XX front backlog. the deferred compares $X.XX a Adobe.com billed billion grew unbilled Adobe.com in and XX Remaining as by billed year-ago from XX% quarter, mix-shift flat typically channel Performance relatively are was to quarter-over-quarter. The revenue. are days offerings days, XX last quarter. monthly, QX Obligation year-over-year revenue. exiting or exited reported up during in with deferred DSO unbilled cloud which was Our in to annually offerings, as QX from drove the deferred strength We whereas billion acquisition quarter reported revenue days

QX trends, flows in $X.XX cash we ending Consistent macroeconomic short-term billing billion, saw exiting customer quarter. the was in increase $X.XX and position with billion some Our from cash and operations investment requests for concessions. was

on light at be billion are approximately our $X.X in cash of to We shifts XXXX, repurchase We $X million a targets. through continue goes which have remaining ensure authority strategic granted fiscal environment macroeconomic withdrawing their focused customers cost we success managing Cloud, billion while with our the In working of the our currently of In repurchased QX, annual $XXX for to May million. Advertising XXXX. shares and we the flows. XXXX X.X

Our targets typical the impacts of the and of conditions, months August. continued current and seasonality June, pandemic July QX macroeconomic summer across factor

tax GAAP approximately Advertising share of segment year-over-year approximately excluding $XXX segment non-GAAP revenue $X.XX revenue rate million, of Media flat XX%, we ARR million share approximately approximately GAAP Digital XX% of approximately share approximately earnings of Experience Digital or X% of and basis, revenue approximately XX% QX, are earnings subscription count For growth on when $X.XX $X.XX. Experience per net growing year-over-year, year-over-year Cloud revenue billion, of and shares, per non-GAAP a new Digital targeting revenue, Media XXX Digital of

typical business. expect seasonal Digital strength We Media QX our across Experience and Digital in

unprecedented with balance to years driven sheet growth for data navigate In model to we summary, our continue invest in growth. line and as business healthy this resilient We us enabled increase expect rates expenses operating to our in successfully operating previous environment. macroeconomic model,

innovate productive. We and are extremely to proud continued of have remain employees how our

now over drive I will Our turn technologies Jonathan. back given long-term call digital to increasingly opportunity will the global robust economy. the remains

Thanks, John.

online shifted at financial analyst this month, our last later found annual We be max.adobe.com. sent creativity this Adobe Invitations will and event virtual to a summer. be meeting the about MAX, event have an email announced to online host Information to we analyst in conference, fall. investor can October. the list our be we As plan

If conference of call a be later call, you IR wish archive today’s webcast listen the to on will today. to playback available of a Adobe’s site

You shown can June also listen by playback take Operator? X would your will the phone you to be ending calling today limit questions per p.m. We numbers replay that person. beginning a above. p.m. and to Time at X questions The phone Pacific we available service at happy on be XX. Pacific and ask now to Time your one

Brent will [Operator from you. Thank Thill Jefferies. We today first our take with Instructions] question

afternoon. any digital and for as I are quarter around tailwinds, up, curious think that third just assurance why field headwind growth changes that the and field Matt’s would Anil with are to you great? you. picking such Good just won’t a departure you of Thank many guiding be Experience, if the could just revenue this steep flat also, the business? given Digital changes to the talk Shantanu, And major there follow-up, on be

as has Matt Sure, field. interest beginning respect Matt for as Experience, and friend I transition interest been think don’t saw answer Informatica as bench, managed digital planning dealt relates employee transition, stronger. the a remain grow role of demand certainly Matt questions. continues is a is to stability, mean has in bit Anil’s issue. we company. the quarter, as I the a as slowness Anil he experience well for to absolutely financial the it at we With available we to expect at this certainly to first CEO Brent. deep and in time issues is for people and There a Happy certainly the said, Digital we a a long of of in to the while going really little of as any both his with

is next and transition experience And field because issues with tremendous layer anticipate so the I respect not the any place completely to in whatsoever with would has Adobe.

portfolio customer of was a unique look great let’s opportunity the and Customer maybe so is prioritize had as unbelievably products to both Content it Brent, we a as vectors did really revenue what to at said growth add we as just commerce to think and you Analytics on is if with prior our it take continues they have well orchestration we expectations relates largest profitability. around there to take the Experience a than and be QX, which an attribution the again the is important. significant a Advertising Digital make experience I opportunity, the everybody we to as I Experience question solutions pandemic. think as said, really And touch for Advertising relates sure amount no and to know and the this of bit Cloud Brent, it’s InSight Management, really little step can InSight, for back important. larger that we what Cloud understands have that you that And value for I quarter customers.

two transaction given to different. accelerate we the in as said the moving again from and transaction the the opportunity did away lower business. margin software are However, driven separate they Advertising take We Cloud, or businesses,

Meeting remember, at you year. as Something last our we signaled actually Analyst

And so that when take out will with associated revenue that the you continues. of the business impact you the find strength

bookings relates this was in I – performance. achieved it for subscription excellent greater climate would book current was the of than QX bookings, say it That XX%. to business we As in

had numbers pursuing, you stop but with could the guided we color. continue revenue is so to thing about And in decisively some a advertising say you $XX we that see business, the feel hopefully that we to had quarter. to gives if said the even million when last that we that about I’ll we good positive our really we and billion really think $X.XXX And decided QX, posted we Brent, that

you. Thank

Stanley. will Weiss hear we with Next, from Morgan Keith

in you, on for guys, talked question nice million the the the side in side equation, SMB commercial you new the equation, $XXX frankly of terms your job about Media weakness taking the Thanks. to through it focus and numbers. doesn’t net comments some in show very Shifting Thank the really John, of seeing and quarter. the of Digital AR addition, to in with

but remarkable sort strength walk on that even target? even areas had exceed XXX the that saw weakness, and with of weaker So outperformance kind your and guys such that were strong that you the of pretty that, can what kind to were it’s takes like you what that were with able areas were the of you the us puts through like

tell And clearly think mean you Keith. maybe I ability as home, business, and the will story in had document documents, I strong. QX create guided are well when about for right, Yes, our with I in both what then business, can record as the creative working is was overall well, start $XXX place, the John and from it’s and to shelter about it a their so to us certainly a you million, we happening add. as the for mean

right use to continue Because to I routes visit our the know, driven give quarter you And a color think as adobe.com, were was about globe. to very effective trying to the think what drive traffic was the data the also to you strong. across acquisition through routes have marketing we when operating tools certainly model, the we the market different market. we

would as was lower to business channel adobe.com. the as document we that was I We going to all really that normally that back continues think segment. did trying fully segment come happened it to was cloud, get our is And therefore, probably have apps, were and think relates businesses but to as we impacted all strong, we customer sign, medium Keith what than on strong what most single through revenue would it video, seen. the small say indicate about the you expect

some to who it transacted adobe.com channel probably is was through and the aspect to result. are market route a more So there who a probably folks of typically coming as also

Excellent. it. Got

I covered there. anything. the Shantanu add points wouldn’t all

guys. you Thank Excellent. very much

with we UBS. from Next, hear Jennifer will Lowe

little work Great, maybe the work pretty significantly. follow-up that granular about How you slowdown things kind demand linearity which of and know but place your QX, you. saw wanted then quarter, are of a specific of people Actually as I of imply bit, question seems you from are shelter to that in of – more surge durable. we drove through parse these because looking in quarter, some and you continue the their new being demand this in contrast seems as maybe as these you on expect favor don’t things because a with thank get home sequentially ARR lot out, to like net the I move just sort upswing Keith’s at of in things of that and move put it to bit guidance heard hard to a to certainly level things down of sort a that in

business? shifts way curious around time might been people how in of out being maybe to like of just attached you the seem what in durable shifts things I’m for parsing have work any relative and have should they if demand be So which to – favorable point a sort at consumer they home

we traffic, right the limited we as related last think that the increase it think to seen did I when quite spoke and actually said continued I we again, shelter-in-place, was impact quarter Jennifer quarter. had into XX to days COVID as began, actually high work you and it which through then the the of at we an Yes, see home

business. to So in strength see we continue the that particular

it’s continue QX. quarter the of early, first but see to we On few side, acquisition days again the in strength the the

quarter. I weak to us think as for while know be QX followed a you seasonally and tends have our

as into a model. business operating data great relates the the such have it We driven insight to

certainly while So addressable is against the the durable market trend. a overall

I factoring seasonality. normal are in think we

things But good. whether the or to Cloud, are business. Document we relates medium the Creative Cloud the overall, not that continue will to it’s it and assuming feel small better as get We

as I think the are consumer at well probably there think was if we like will number clearly look that impact was that space. of one we, now outperformance it that And thing our the momentum of I related to wow, as business. you it demonstrate QX numbers and continued if great in that you COVID overestimated

Okay, you. thank

question. has Saket Barclays Capital next Kalia with our

bigger great. with Cloud? like margin margin. of is part hope well. the byproduct the the talk about questions decision the guys the Advertising has taking my benefit can Thanks It an transactional for and of you for Okay, the lower in seems you, interesting Shantanu, cloud on ad of picture, here just with slightly all focus maybe kind

to growth you bigger the And little perhaps so with than do bit perhaps the more the going is a question it is, business DX feel profitability team past? balance in the has in

companies do. profitable know which we unlike have revenue good other never first other companies space, Saket, I not enterprise that Well, pursued the in is revenue,

And or context, I the that long-term understand we all around are engage and small what did large is commerce terms where it’s the it’s what with is the, what growth is are we orchestration unique the a so going offerings, platform in opportunities digitally saw. how when particular know every of that customer business say well and step can really result how journey, quarter, say, of and whether in clear how planet, these medium, let’s as associated do company and on get analytics is and where a really we experience our transformed take to of with what would content a In core the strategically, do we the do really differentiation. customers, I I business unparalleled back, saying built on the insight we

and offer, are how really two can we which if that that continue know they don’t is of well that business something terms but that we talked InSight businesses, software that have side, advertising in money so sure benefit you really the is had will On we there a spending resource-intensive change what let’s we be one make represent down reducing resources going now, opportunities. that growth catalyst the that going can is we transaction so that’s a but business, long-term really It business, durable, to our we to that double huge right signaled we opportunity. always very used a say to on was this a Analytics were be shows the to were as attribution Adobe which making works driven about, pandemic and from and is certainly

stronger of gives a why bit that make on the you hopefully So be terms waste of a you company. the know strategically, changes little in you making that to can crisis color

Very helpful. Thanks.

Zelnick from will question Credit next Our with come Suisse. Brad

and focus all appropriately you will exactly you John, Adobe great now the on is what our for has you to that? you expand any the than how always Great, for investing And we stated on strategic by mean that that to much turn from is continued long-term what done? different remarks away John, growth. Can so thank congrats quarter. prepared My you in coming review, question your

interesting question, Brad. Yes, that’s an

the we would benefited because the obviously and and I think earnings travel way hire in-person cancellation basically events. We of the hire. expenses at the travel certainly that when certainly typically of to look we QX to slowed we our growth-oriented pandemic, couldn’t are couldn’t we way we company. in because And related margin wanted down the we

really So going invest was say, point hey, the are to to growth going in forward. we

great We in that of got out. us have Shantanu opportunities front laid

in got to. proven for was we so we that continue QX continue to get line to operating growth trying a margin long pencil trend as as what line we revenue, I the in I we grow great to is And have And run. is we grow that achieved one the profitability to invest would and opportunities really

up mean you how to I just sure that’s customers of will we that continue for controlled and to the know us to not the even add you at opportunities look added. important to that sure we maybe have Experience are the long-term took quarter, the with place the are to action make how long-term at back because on our look have we on the that than that long continue the make decisive Brad, variable company the right think be have bit to more that to When deliver we really beginning sure acquiring we that the to did Cloud, the at we we market little Platform, make be unique opportunities opening would a actually Document what to company. the smaller ability pandemic John because right very that value, going opportunities the And widespread when expenses. I an we

earlier, So, to something Brad, always point your that do. is it we

that we hey, to also long-term so saying, to focus understand early actions I it’s to time referring the took the and business continue bottom drive top really and both growth. was line think that will our John we on opportunities and

Thanks again.

We will Mark Research. hear Moerdler Bernstein from with now

those Do way all Sign you back? mentioned quarter, and COVID-XX people how us thing for you going Cloud the as Document and my Thank appreciated. given and it quarter, question through. was really Can would taking you a very to a some about as much moving strong this again Any color parts you much abate back? the congrats move your be was tailwind. color work were on tough continue forward? think move give about they tailwinds they start they Do to

any give revenues a came traditionally? As you versus quick on follow-up, can how of Thank now much you. color through adobe.com

how really people be remote more we as locations, a is Jennifer is business that take, Mark, company back phenomenon. be you if going question digitization Adobe sure also go I to everybody making think continues to to working a this the is to is digitally, that and the about mean I asked going as think usual. important in reentry, I to engaging new similar normal which think

web is PDF said as, PDF accomplish. available talked always the anybody part So I functionality the from We document, all we as been it. they who move trying services about think excited of the talked to Mark, about on as and any relates growth system that’s sure making to as it document perpetual subscriptions. had wants we are about to for substantial that have We API to

that be will going trends feel don’t secular think I capitalize everything We Brad’s we that back to we we optimistic think continue sure that that that to those again we’ve these continue seen question And maybe on that is think tailwind opportunity. will we make why given abates. just benefit the from. so particular to reason to And

durable. been we document and that’s has that always a growth, And accelerated a it think will just business that trend so be the

we’ll with hear Materne ISI. Kirk Next from Evercore

Thanks very much.

I So in to the topic, terms Cloud. stay Document same of in the want

area that resources and to further, just the going are verticalizing it maybe forward, forward? think capture then capacity upward last you more thinking from I John, even applying documents? ARR forward related demand in what be XX%, are been Is people an two revenue pulled perspective the segment. fair Thanks. that So to Document be Shantanu bias out, pull our just normal, given might you a is sales impact your is the the that doing, new – getting that are either of It turns I bookings up assumption what seems topic this on guess maybe about And to Document a on quarters. ARR, perhaps digitization Cloud and

can on in Digital whether first this, we that we we to now on the do the we forms, the the do strength we And out public we and are again, we content the it so that the your there were able that have what back good with one. organization offerings have that we Experience to combine during document with have business evangelizing made sector, to were for question on Kirk, side. going what what doing entire Adobe that delivering Sign strength was field have what our of

that as aligned the of around entire relates you we shift our organization that it making example have to go-to-market. one significant sure a So gives

Microsoft I of the Sign and we document partnerships have terms API the done we talked partnerships with on that and and and the have side opportunity functionality. We’ve in always integration. think about that

a We with announced really ServiceNow. strategic partnership also

able do, change workflows in statement to to of relates which then those If but enterprise is it you PDF every workflows happened as tangible. an then single one what the think how a that really of ServiceNow record is makes needs

So one have to do. that able again, we been

and one rather a that’s like to our rather than weight. pivot question ways than company really able in brand So use we and the small which great – are nimble of

offering has the of so an example take Sign that’s now into DX of our they can entire an also with organization associated one every that And field customers.

content Cloud has huge the as back, and accentuated of imperative the terms we to going we may well bias workflows see to the these move opportunities growth we Creative, But kind of in e-signatures. versus digital revenue creation about, both. are side back for it’s think creative both I is business talked – of forward these smaller come we Document going – see continue as Certainly, come document to a not some pandemic businesses. away growth them expect as because be for certainly towards the And obviously on in opportunities and coming just

So I are both and files think just those of about excited opportunity solution in we all the associated the with them.

you. Thank

question. Griffin our Jay next Securities Vleeschhouwer has with

Good part in in role XX% evening. also on And DX, you. the of or strategic the were to TubeMogul about talk shift perhaps Shantanu, the your does strategy, overall mix margin Thank a could we’ve getting John, acquisition? before better DX is increasing you gross back which of improve about self-serve, as where prior feasibility the of talked which calls. you you

and is personalization, applications Additionally at and interesting content, Summit, technologies and services. course Adobe which one, of intelligent had some some commerce, such very interesting as scalable then new pervasive about say initiatives optimized things to really

about So maybe opportunities latter talk resources for those? business how are thinking in and the you incremental terms those of about in

As them. always questions I appreciate of three one, that mirrored Jay but in was all

you have that margin, the have as I seen it data look think relates improve think the sheet QX. at even you gross as I for COGS you that and to the actually

it’s like So on think million quarter-over-quarter. or I something something $XX

I So the improvement COGS. think see you in the

sure looking we constantly are and We our at we make want improve. COGS to

interest when a another as now I say, use it add data they across and is question around is you that’s Summit channels. people so lot that lot Adobe’s are it they services this of all of can automatically for of how personalizes in look drowning is whatever user that at a multiple a there’s a required interest, intelligent the that is that your higher, where around think reason much all solution the customer our so excitement think and value announced and things differentiated there that to have I really we we have why

what able to out, lot So you was were advance do very more folks, would with Summit we interesting expect got are to, because of we thing with that out. that’s the I awareness move globally going that you more right, that rolled say able the to in and miss to it’s for that were lot trend Summit forward. of we a be we would were probably is into top we us a as that actually all a I transact little less we But mind. second ability mature that XXXX pipeline half and move that’s now one mean

little at a of how that’s we’re bit looking it. So

Okay, thank you.

now Bank America. Rangan We’ll of from Kash hear with

Thank much. you very

of First what as to by far off, that’s value in do the today. the question savings, analyst. you things learned Brent But insight stay his about frame go Adobe into as I result, of of windows my were as company? virtually XX here to add want accomplish are beyond? product Thill to or just not that could for as congratulate pandemic? are a us marketing, snippets look you operating able offer Adobe, a revenue XXXX market, post whatever software Shantanu how costs, you for of it a on of virtually is And it Adobe lessons kind as you and what you the we years and of know, quarter case to expenses, my friend, this development, being And how you the in to is – much Shantanu of opportunities, partnership, should my

ever in around this through we you all note too ability think had than been their that would how focused internal to I just said all they that new meetings on existing productivity very it’s earnings my I as terms to will without saving I side, be I the part is made of saving when on productive a close, are we company, people that away. as so product the greater most engineering conferences. say in many are all lot the I phenomenally I and our they say sure they’ve look at the are are normal on reiterate video mean that would IT virtual travel, relates company. employees I actually productive projects, fact because mean XXX% world XX,XXX mean something the it successful. were of actually in We to productive. as first organization, was company blown it’s Yes, on as overnight a Kash, I the a first

with to it on we virtual bit new relates happens more projects, I to white boarding. the little a need what that so as focus happens one creating that the think respect of brainstorming

So that’s continue will we something that on. focus to

was good. very internally part, which with other we On the customers the feel so dealing

we’re the On internal, their have slow now space mean and can across you customers, because frankly people now you time good for a first the went were meetings through it customers. a like a phase actually bit dealing that with about of same four I conquered little day engaging sometimes thinking makes right customers continents feels on with really think long as but Kash, that you’ve I feel with but day,

feel So improve. wherever they we live that attract also might to to that’s ability talent our just going

talk need because Digital net, to or is a so is higher, like whether Adobe our for I whether go important, it creative, would to overall productivity to I point inflection net, hey, Adobe, about even single company now serves And but think say, Experience. whether company such I internally, say, going it’s documents more at it’s every an about about

the sort of two to Brent years. to and think going a I very congratulations the insightful. and I benefit So company have macro certainly, probably mean, longer lasting is Adobe tailwinds the been on company XX the you like followers great of be of

So congratulations.

from We’ll Bachman Bank Keith with now of hear Montreal.

want that Creative update you Thanks very to growth to Magento very and integration can well next given increases how of wanted that products about talked when you. true? In of sneak introduced as units Creative, And has quarters, much. an the thinking in you’re rates direct see suggested rates just normally with growth anecdotes as being are kind see run to is contributor potential much. and people on growth you the been to price past, Hi, any the and and just to both And I new mix users, associated that the net or you’ve Shantanu, wanted I if with give the the And this you still Suite? price about thank of also over a to the greater on one few pandemic then of creative. Creative us property? traction

first say is question be is of base proud creative think only and I one were market is provisioned, great other. there which it I getting we everybody as the to build said I it is segment tell, has question, million who to a $XX on story we for your us a also mean, think no on, going I education, larger. that to the wouldn’t for or and

all And have it’s different is Mobile clear. again I communicators. think monetization. points, vision everything very Keith, to we from inspiration our Spark the of a did really we is very it segments. one-stop price have different for It shop well, is for

certainly the of commerce adoption terms you commerce. our question quarter. gone expect we’ve the glad very So on frankly solutions and them both to more asked dramatically to us serve continue of more offerings, as see in very I’m DDOM the acquire sure we to usage was using seen how up in has to appropriately. make enterprise points, price them as well Commerce our that strong

that band licensed transactions. for all remember is to think with way typically do the I also base how that a of many important you it’s of it’s we

they the a – in whether transaction it’s whether not it’s result that to but revenue, about doesn’t it’s band So will increased have an immediately really or go. true-up

Monday in bands. about how new is it gone Cyber every continue having they or day, Usage almost see to acquisition but customer as higher was we up, So, get good certainly hopefully you’re renewals, Black that will talk like Friday into we that. as

we Operator, on of more coming up top one question hour. please. We’ll are the the take

Zukin will come question with RBC from Markets. Capital Your Alex

guess his business that you quick cycle margin normalization be out is positive new guys squeezing XQ kind profile then initiatives, bit just gross the And given for as these Digital Experience of your maybe tailwind little you say should I new a XX a, to you we of follow-up in from it in can about thank the Shantanu, on maybe, the particularly and Cloud linearity where terms the Advertising somewhere between as of me years. margins, of at a to the piece, mind? and fair in Shantanu, talk are margin taking levels? sales quarter, for the Brent XQ to congrats the some operating the look

think April I became worse. impact quarter John, the and Alex, felt was you most probably is on for margin, certainly March relates businesses linearity of the to the it true I actually can that the month real then and during was of add the think as where this the

a got of into we people more we started think lot May, to saw improvement. as signs I engage

I think on John touched that well. as

think I up they but are Digital that’s knew and I highlight having everybody to were we and May, it so way fires would then fighting. mean, an customers. a March, And far open And related sorry, as more was I conversations had all it it imperative, half, month that the started for other month, to they with

you the some the margin QX and that And about between we feeling is we forward be which gives about So operating linearity, with. levels. will are moving hopefully that deal QX why optimistic have we as pipeline. How will

as I big dramatically, remarks, going engage Adobe side, digitally will questions, will to customers business but able the it’s able when the luxury, we any and is even in the portfolio not creative the amplify engaging platform of electronic critical the to documents the what size QX. and no I’m future about be collaborators, going have, of but all is the invest to because are question continue of it, long so the going is be think am we of you in. may excited what accomplish think am I about company more say that improve and dealing for is with to the is is driver you with urgency John going let going you’re to for to again get for creative to a of going be If me economy. products with be business. a we of the longer growth learning to that we not and is I to digital It’s of no individuals no about opportunities And really and prepared way proud. little was proud more think ran And see on enterprises longer the a digitally bit realized there even I change said, be be urgency to – the to DX transacted, thriving, the be PDF irrespective ecosystem mission learning to

Please the stay to safe, used stay profitability. of are we And this you as today. delighting matters, a and so flow proud which our have will high said I us sustained priority customers. refine align And that healthy. crisis again innovation cash on great is joining us, we we and strategy proud very our growth for always for further unique and with business we what thank organization focus our truly but as model, much I’m is

concludes This call. Thanks everyone. our