Adobe (ADBE) 22 Sep 212021 Q3 Earnings call transcript

Today's call is being recorded. At this time, I'll turn the conference over to Jonathan Vaas, VP of Investor Relations. Please go ahead.

Good afternoon. And thank you for joining us. call, John Shantanu and Murphy, the and Adobe's CFO. on and CEO, Executive me today Narayen, are President With Vice President, Adobe's On we XXXX is which results. Third discuss financial this year Quarter being fiscal call, will recorded,

as today, assumptions. September this You of involve targets as financial call, results Adobe's results XXst, including our press contains The website. and financial PDFs Investor as product And from that our and well Relations can remarks. plans, information QX find forward-looking on our in release, prepared materially discussed risks, differ of uncertainties, forth these Actual is may statements set and those statements. in

On discussion today's are will on website, discuss this factors these of GAAP Adobe's should you GAAP discussed and a non Relations now press review Shantanu. measures. two over in turn in and release the - Reconciliations between the earnings and to Investor filings. the will call call, For release financial available we risks, SEC our in I Adobe's

hope customer environment. afternoon. new quarter and outstanding safe Adobe Jonathan. the healthy. our Good in learning, staying all another you people storytelling, and continue of are to had ways across globe embrace engagement digital-first as Thanks, I

businesses digital our share as creativity per year-over-year achieving for experience. share performance. in record GAAP QX XX% role revenue, to always digital the Media in on in This strategy performance acquisition increase ARR our human QX, IO a Our In document and the reflected we executing X.XX growth. powering new billion. central announced accelerating played revenue, for year-over-year media, and billion customer Digital XXX were of in QX, ARR, delivered business, Creativity and in customer ever-expanding new XX.XX continued Adobe $X.XX. representing unleashing engagement million quarter were was billion XX% the quarter revenue, annualized our exiting we total all grew recurring and productivity Net or In has non-GAAP of product We're innovations, representing Media base. to per growth. significant exciting framed strong achieved our across Digital an $X.XX earnings earnings X.XX drove

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services. interest momentum, customer Adobe secure, pioneering reflecting solutions Key partnerships and Adobe is interest in to all the from move need strategies. to payment first-party third-party integrate system Cloud technologies. customers product for around integrated to innovations, companies as and cookies of record. of world, enterprise the a and campaigns, in workflow robust, and in growing our include collaboration including their reopened an spending fulfillment Experience personalization experienced deliver highlights data As to increased solution And to with in offer software commerce global help QX new businesses Walmart resulting in sizes. with PayPal for omnichannel marketing in capabilities both Workfront CXM priority cloud

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to received environment. equitable proud work. trust, to as customers a continued Our place great and we of the navigate their continue we external recognition industry partners for a and dynamic as I'm

Disability a Toby bring Equality magazines, inclusion. diversity, for to held and Last on of employees for This XXX% consecutive. virtual to named fifth inclusion. equity, all together shared for our And Places score Adobe quarter, the Work companies we Adobe conference we disability were that to carrier the our for list designed people Best week around values received here. index

event, reaffirmed pay As parity. we part of that

and equal all parity across to pioneer continue are career that employees growth groups. We demographic opportunity to ensure offered development

program programs. of bring internships, donation with established to and to black part This schools, dollars readiness historically ongoing million universities scholarships, new in efforts As diverse serving talent, a offers Korea colleges Hispanic partnerships has more and our institutions. Adobe and

for opportunities skills. partnerships creative Our provide students focused health employees our to to priority. is goal these of our The top and technology with and remain learn safety deeply

are fully on basis. employees vaccinated a slowly Our voluntary to offices reopening

the in ahead fiscal to of work look our year. our to that Adobe, the to and employees brand, continue employees culture dedication of a best products, do business. strong we and and confident our we success and for will of As I'm remain business continued John. category-defining drive strong hybrid Adobe's will future innovation, unwavering and what's the flexible our close

Shantanu. Thanks,

data-driven with results, future and and world, opportunity our financial demand product continue Digital and DDOM, and technology customers is awareness across Our customers. revenue, a larger than market all experience, Experience ever, operating for power growth demonstrating in create driving leverage by ARR, Driving subscription we acquire our With for model Adobe.com category-defining to sizes. digital RPO, our offerings. of revenue, EPS, customers through Cloud innovation or of our and to Media, to digital-first strong personalized growth app sustained our for stores products new the investing to real-time. experiences are traffic And we Adobe's

per QX exited QX, of XX.XX in and non-GAAP earnings In exiting cash digital growth. Media net XXX of Digital segment, Media $X.XX share revenue Business Digital per of billion X.XX and GAAP share revenue revenue Digital $X.XX. XX% media XX.XX million billion, with ARR the billion, As of record XXX operations financial earnings quarter billion X.XX ARR. X.X highlights Media included stock of quarter, shares experience repurchasing a Digital we we XX% which growth of million, from new the in year-over-year quarter. flows our year-over-year achieved the diluted a million billion, of $X.XX during approximately of of result, our and represents RPO diluted and of Adobe achieved

represents We XXX summer This segment marked seasonality summer industries, with as anticipated, reopen data globe. added X.XX continued consumer consistent do businesses digital pronounced with across associated traffic travel which years. growth. while from to with enjoyed the season highest evidenced in June that across And is As million July QX. showed index, which net Creative of individuals XX% web We with This in see We their achieved by revenue the reopening. the the experience of in the holidays. Adobe and correlated two SMB year-over-year beginning of the regions billion, ARR. Creative new saw recovery lower we

Our sights. results offerings demonstrate by and (ph)t demand our strong - QX execution continued driven D for our Dominant

and creative customer engagement, Third segments. strong and included creative all products retention, drivers growth renewal across Quarter

Creative New driven that Cloud user campaigns. marketing for acquisition by Apps All global

which for channel. the in XD Adobe with products, and Cloud our offering, mobile. SMB flagship Teams recovery Driving photography Adobe the applications, desktop Document through Continued fastest-growing net including And remained ARR our million added work, applications in Creative of for transformation QX subscriptions our paper video Cloud and nature including represents segment achieved our million, our in immersive our including and on reseller adoption digital And the substance. of to both Cloud Document are essential continue we $XXX XXX Document of changing revenue Digital Cloud year-over-year. XX% to the saw of new quarter. documents the and we business. growth. as

a increase demand environment. the subscriptions teams Acrobat web strengthened globally the driven mobile and Acrobat offering adoption by hybrid for Third-quarter offerings. Acrobat to need segment and for and SMB our continued Document work renewal for drivers included Cloud new adoption unit in and the our collaborate the of Increasing growth in licensing Acrobat

Turning we subscription experience Digital achieved representing revenue of million, was to Digital year-over-year XX% million, QX, growth. in which XX% our year-over-year represents $XXX growth. revenue segment XXX Experience

Management licensing subscription increasing with large We Merchant in Business their and new acceleration Adobe quarter strategic digital management. volume, Workfront digital driven several continue revenue and increased billion XX% non-GAAP platform decrease rate from business slowly. payment. basis. And quarter while in retention benefits compares with benefiting which RPO The We for tax large value including in revenue experience to we our adoption in employees Experience GAAP year-ago increased deals. were and effective customer increase to reopen the tax accounting growth That's deal investments Customer travel. our and headcount. the return of days $XX our to XX.XX enterprises our for of during and acquisition. QX a Journey earnings relentlessly, we last the foreign experience hiring a Momentum offerings. currency growth currency through in strong a of the sequential days, new focus and expenses experience continue quarter-over-quarter impact in XX return as FX QX. was a Adobe perspective, and and to expect currency by activities year-over-year see a to grew our home, hedging reduction ramp $XX to revenue commerce sequential continue tax customer XX increase of business impact strong From ramp by days performance is of quarter. caused began year-over-year expected to mid-sized From of partnerships, services customer exiting trade majority for on Adobe's Strong associated the in further customers QX strong QX the caused as net primarily we net of make as realization on DSO U.S. and levels increased our hedging for tax due services. work travel strategic was moderate FX accounting in in on demand XX enterprise is of and quarter. our to professional rate facilities to a the perspective, to GAAP share-based The to from to Operating investments basis XX.X% activities revenue of XX% currency to million. accrued Adobe's a million. during

approximately position a tax billion targets Digital our QX billion. in subscription a digital operations of $XXX of in ending and XX% media and sequentially of ARR, in of Media expenses, from exiting seasonal net due conditions, $XX were million granted segment $X.XX $XX.X digital year-end approximately and decrease have to Adobe was licensing X.X XX% revenue approximately QX XXXX, the cash a typical QX of XX% non-GAAP XX% approximately prepaid of new macroeconomic approximately revenue Total $X.XX, expenses. growth XX% billion, back-to-school cost XXX a share cash revenue share billion increase on flow billion million in non-GAAP and GAAP current at quarter investment repurchased billion approximately per earnings expected payments, We growth December year-over-year. Our QX X.XX in basis. and of currently experienced short-term of tax and strength. basis the of We approximately authority from income accrued down remaining $X.XX. of X.XX experienced shares, in shares GAAP share an year-end earnings rate strength, a digital factor segment on count approximately $X million including year-over-year, increases growth per year-over-year, revenue enterprise approximately approximately spending of

clearly our on XXXX in for and our we performance March. to annual updated QX, provided year-to-date track targets are fiscal Adobe's Given exceed

With the documents, call and will strong creativity, turn we customer invest I across to the digital continue take the over and operator questions. massive management, now results. to to opportunities business experience drive your

Ladies and you. do [Operator by Thank like ask Instructions]. you a to gentlemen, if so you'd may question,

using you're allow do speakerphone, equipment. limit to We reach your that signal a our yourself [Operator you to please ask question. Instructions] to sure make If please one

may by questions. from initial our for will your first has We'll Alex star everyone question, for a been answered. after a signal You an moment opportunity Again, Zukin you. take queue reenter please to question just to Thank to one pressing allow the one with pause ask star Wolfe then Research. question press

speaks comments on then the had it taking just in commentary same guide if question. Because business? net in looks, seeing then seasonality which exactly of there. separately, beat can three the what and in digital the the in new at ARR, those just we double-click the front, get quarter? for drove beat, a you look dive that last but at strong guidance on the Creative guidance you what you're some adoption, the strongest that can of we the AEP to thanks we the And kind weakest guys, enterprise the sense for Hey the media, of some that's around seasonality particularly Cloud CDP driving confirm on and Maybe -- But better the really of to versus time years, made.

do Alex. that, Happy to

and DME business. your of I question, really as the that and to we on with first ARR. were speaks related associated insights So pleased the the think [Indiscernible] it strength to it we get Overall, the

happening I as think consumer that the return going to a the in the environment. had we little what's bit expected into more quarter, with normalcy

a been that have may a was this sort therefore, as travel summer Delta what Now, time prior our holidays do. seasonality really And as or result, expected off Variant in they the we little two-year to of summer do. from had to a in

the So as leads you if largest that and numbers. for pointed a little was ever given to all about a what's exceed which XXX, of be the the particular we've out a those going happening guide And the that digital that think easily or the X.X our would approximately guide the traffic of given which on we've billion little take as saw impacted a front. QX. ARR web March expected, us And to with in see optimism your at XXXX to guide beginning of to we're to given you had we strengths of really back that the relative more. step year, to point guide for mean, was associated with a continuing The We're tailwind products SMB a highlight as I bit SMB, we SMB. and less us bit I our relevance

So, exciting. relates MAX well, is the and really categories, going well. individual in the as is Cloud imaging Acrobat Document Creative the well, be Cloud, both reflected doing continues to do continues which business, to is to to it do video

But line. feel that So, on particular I very we drivers growth that remain the and this insights about would business growth much intact. again, the in the good we're And what say business. that the for is net-net, getting prospects

deals that's to have the QX to remember, question quarter, QX. tend on answer in a DME, we So strong And be your for DME. seasonally enterprise again, a

analytics, QX. gives some on And start you we see QX. the pleased education with that, the really side QX the customer on expect also to saw in as happened what in that the in We the see continued ramp adoption what the of in we and to strength. question, your hopefully DX to what optimizer, Experience to Platform journey second color And top of applications Adobe Adobe up Journey so

and last personalization. digital nature again the customer I real-time unique think doing of year in that think very with in what have interest we're if a differentiated lot there, and platform we're particular management. I the of And there experience was that transformation we

all digital we which I Of think as businesses this needs the to an both for people that as continue the in performance terms be will of. well. is recognize why of QX also think priority irrespective the of enterprise. to size, that Spend targets, QX do well experience

Alex? So hopefully color that gives you both on

Thanks Shantan. a (ph.). does. Thanks. It lot,

from We'll Materne Evercore take ahead. Please Kirk ISI. our go next question with

Oh, could platform on Shantanu, little bit very quarter. and much yes. I was a had. expand couple bigger wins of that you wondering congrats the you Thanks the if a in experienced more

all You’re back, with helping of win take was be I deals? impressed also using these had rate of you the rates. seems existing which larger or to to some high to clients what's your seem uptake powered a guess, XX% you capabilities, be customers, ai really these competitive. if I step

of experienced platform kind the of quarter. if on I expand you this the some Thanks. deals So, curious enterprises. we're larger just had you

the of the and that table I sorting at analytics stakes digital business. end is are everybody insights anybody that macro data think presence of and and and commerce Sroka trend finding is absolutely a doing for day, the and

Adobe so, a Everybody And I the website. platform where the about delivered what But personalization. talking we're analytics. and is think started you with Experience our I everybody think started with we've you

consumer well businesses particularly and a after of Company going different a normalcy but of and of or as We're were selling done industries, has to this the BXC them example, do invest the in these with a Experience lot the little -- existing think are it's more, and new and customers. we're and a I profiles, the bit The a for there's starting messaging getting focus job you marketing data really to more bit see BXB their sheet. to have a that. business on and on need healthcare they digital you're I could that real-time. so a particular good continues board of think the in first-party that's there's more comeback would ability just whether differentiator industry, to be The key message data Company, behavioral little interest to associated logos happening a asset them platform, telling what's to balance with collecting that I strength say of an the they going their And the nature with they off have commerce. associated put the team

because marketing trends pure. all relative and anybody Thank those Play is of when offering the fact our of we're else. the think I significantly really deals, the you. and then we, that of differentiated strength are to

our Moskowitz from take with question go We'll Gregg next Mizuho. ahead. Please

DX? Workfront data only Thank three-quarters something but average that larger, of you that's that know showing thus I sizes question. you through? in is very Shantanu, far, the that much for have Is driving deal taking already

more So the it's efficient, a have both great hybrid, And it's with marketing Kurt for the helping promise the processes, especially working not a of suite we've the said it's think what customers deal Gregg, And if this interest. or how do glue the maybe you're want definitely how only us Hi, we're enable, terms helping all to These question, as us to And hearing I there global helping environment? is be They many helping campaigns? do Gregg. thing that's people and working are but of of that have the was products, Workfront pioneering integrated they do from should they and ways, is of with as an get the they it's agility home with it's record, great about to sizes. in have the to in more customers, campaigns. area another workflow in you a more existing I have responded us, this from Company. our always technology, also had and space. of well, as I part. But processes system that in then big talked

to become were I think they looking purpose. general more

the all a Annel done, really team we part materials that of definitely and Workfront, focusing marketing or do of I the the with have That's part but of think a personas. what associated the for different of bill of and with solving that. workflows the and all resonating, large definitely it deals interest on

Very helpful. much. very Thank you

Gregg. Thanks,

take We question ahead. Weiss our Stanley. next Keith Will Morgan from with go Please

lot guys, you, more side and we've and equation, maybe nice a little Thank M&A the things really taking good very heard getting Perhaps, of expectations characterize are the versus Workfront for of seeing performance the Workfront a in of into you're your definitely question about quarter. upfront of deals can the you quarter the kind of digging the sort and contribution on bit in

of in on then M&A in the broadly, in Secondarily with the so And QX? thread to perhaps XXX just guys, The last common data guys. two you, portfolio that included big trend a is terms a terms focus just the strategy. Thank points to for Is Frame.io, for line, a self-idealist and of ARR that sort collaboration. of a is area basis? seem have that for on adding particular in together clarification, two of or that Just Adobe forward is drawing putting deals go-forward the more

I of Workfront actually originally, relates were we're said that, a in something there each like so first, one that Workfront, very targeting think let the XXX. do me a exists three I and So, I we need will as clearly think had Keith, parse to questions think it

You're then that beat that track FY case. to a XXX for revenue on and continues in significantly it's I to And XX. be million think that we've said the

breakout Workfront. deals, larger we don't Keith, these do we As

the And to But so that. appealing that's business. definitely the way Workfront we think about is

we deal, Your question Frame.io. ARR Uh, the (ph.) close relates to in we guide. mean the I not. clearly is not it until would second it two no, as

as we as been a question We'll it your expect team, a excited But said, happens, you that it to we've in collaboration the for about as QX. relates we that frame. when that about happen so, to talking as we're And what update to certainly of part while. relates and what third it's happens on

XD we've remember do in to you being what If terms able editing. with of done live

ability multi-surface run iPads, tablets, teams on what I are really is where for of the as devices, existing working our think attract we have increasingly or provide working with and people, done and we've I think from or customers value that mobile different are People our just new those people so with applications, the applications one as locations. well customers. desktops, to

expands participants people and in will we it's a the know, videos like we can to remotely. making become particular, the about portfolio the acquisitions I We're I stuff workflow. the at placed in frame, think that all become, to -- it who they we're dramatically. number of you our excited you potential of hope if pleased. are that the of bring sure shareholders earnings our And the we beginning call it's always because with and video The and where Keith case being a both as customers. And done significant is value of

color the especially spend That guys.

Thank you.

Fargo Michael question ahead. our take Turin with next Securities. go Please from Wells We'll

Good XX%. are now On there. afternoon. in -- margins Thanks Hey, questions. the above the for taking margins year-to-date,

margin should of that of the more other in second-half just to - normal. more to point think normalized I benefits, we potential our a for about profile referenced be step-down how here previously you so you'd there, return the assuming could a think

can you do want add? then and to start I John,

great. be Yeah. that'd Yeah,

more the back business. we online, had to or that across down a You're quarter that right. start hiring facilities probably come little with this of with indicated bit. Variant ramps see our travel, and a margins reopening the regions, come different XX% would at our certainly continue and slowed The Delta we

continue the the in expenses after those performance half, about our than revenue maybe with and margin an and contributions quarter to overall slower did in eye Phase overall and we'll talked path growth, targets out the And when which QX. larger the from says, stock mobile, was the we're businesses. do saw about expansion I implied really When what an is areas growth was our being saw. such margin to expansion of [Indiscernible] Platform, December, and updated as you to in that even so in we contributed talked reentering But we come expect I just and QX, sign huge quarter with older but is about of an we long original a expansion and that. it against in expansion. margin the top-line thought our March things, that these think what road, executing that continued opportunities, the for to said, you mode the targets Adobe we to margin to little outstanding from revenue But that leverage performance. its we contributed second touched back But continued originally on, Experience it all given a the expense immersive when XD I

we're that be to you certainly, you think the the position Well have on, XXX lock is a and opportunities is John and to John, maybe thing - little where that in on look is when our in said, we referred to driving also profitable a growth only But all other I that market some big I efficient market, hire to is TENEO I terms why plus market addressable would to we add expenses, address of continue billion-dollar think the of the in what's we make sure I talent, have. when I expenses. think at it's continue facilities which can happening focused

growth. drive where just And folks, so, don't profitable

Thank with ahead. you. our from Jay We'll Vleeschhouwer go next take Griffin Securities, question please

last of a use for you referred you're or you the over that of of to. this integration, over DX Media you ways, the MAX, you'll years, business Shantanu, like help the number you'll Thank and as ago. cases The can segments. about the having you. of talked or and particularly Shantanu specifically, even to way. the you, so recall many old combination two days neutrality about has of Digital Good a regard fact, that evening. across for the and dozen drive and sure by number recall the last in question integration at were you is, conference quantify and and first the DX, John. I'm Relatedly, have back does certain going some four a that targeting Company the over to years unique number in time. that with through business. acronym gone how Describe years, business DX recall the it's you integration that between we've effect often was

how the So cases capabilities. number increased of perhaps has introduction in the years, DX use you number last could new other talk the about targeted of with for now services particularly of and payment

between how. talk clouds, Acrobat so Acrobat, first, you very example one both Cloud Cloud and is Sure, think as clouds. the Creative Document Because let's right? question it to even and the the much of know, reflected business your Jay, about integrated relates that's the of as tangible I first in so We've integration around

that campaign, think the step have is of more creating I both They're seamlessly customers spending and is on to on content they a most would is which that goes we are all now it's application, a something to ensured referred what content area assets. whether also of past it's people whether distributed, content that more that interest say as goes velocity, marketing taking whether the that website. right how in digital on mobile it's back, I the a is something

in between the growth flowing Dx. of so, where of problem through the the M area making content real of is facilitate marketing the these we've for because that creating hard -- campaigns sure an continued integration think this revenue shows help been delivery solutions. that's customers, which I accelerated that's and between M two is to up all well that DME, that is the are assets specifically is our And And as assets, and where also able really as it's

bit you So a gives little hopefully the of that flavor.

it I questions to my the reflected think the and how's looking if earlier that and saying, when had mean, being Gregg I workflow, asked. is at Kurt DX. that's in people on content, created wow, also the it are that have now freelancers

So your that's answer question. I first would what

it's use And an it's I that increased as cases, BXB and are the it the should dramatically. we to use companies the DX say BXB update, certainly large of think coming number ones us relates to cases, would do I is original and very the identification say of that's recognize for push that saying, fairly driver. experience a whether been even '' generation, it's for it's consumer-base management industries, companies. big for whether ''Hey, we was customers, and around regulated BXC, that commerce, I whether doing which maybe the would as highlight a if customer lead

use and I the have you're or seeing do. of I global Now that those partner you also Globally, hopefully think would and you're regulated fairly want is this, Whether candidly is increase, seen dramatic you but one gives a fast-food which I where use-case think aspect industries, Company say Company, a an of so way driving more. I another you this cases this in workflows companies. would the And so much then one. you're we've ecosystem to a that's so that's and do that is more automotive that

And partner building a horizontal lot solutions our of of on so, ecosystem their top the value-added is also platform.

would do with need you say order DX Part in matter you is of are, what engage are. you to So-net doesn't I your to to customers. size what what business relevant

Thank you very much.

next ahead. Saket Barclays. our from with question We'll take go please Kalia

is, right a or to little just point I talk Cloud if seasonality specifically? I for for start are to guess quarter? Cloud that like bit a Great. where taking to maybe new you Creative, about could business Document be into just net sort things business the just was maybe to question the we the for bit. Thanks of there through year. are in there seasonality my any think getting more Okay. this may -- look wondering up the guys. gears to historically John ARR Document the question been could seasonality you switch the Hey I in ARR here. consider has

the paper transformation that's the they enterprises -- seen the we've you've they're institutions in well been to the in, as that just about engaging pandemic need for more obviously that services situation have digital not and but look as think use. growth with great we impacting, When and individuals

when across indicative its and offerings but holidays own associated the individual there, pretty we and I you that's individuals As saw Digital think that we we lower-traffic Document believe Cloud, just at using Creative bit Index our That's. a with our said, we enjoying little data. look Adobe where have

a over years. highest gyms travel two the So, lot months in the

So to which again, that bit, and both governments, and and enterprises seasonality Cloud now. right is business, a education, we that presence such Document the growth fastest-growing great that a hitting strong we've strengthening. It's business in the on see is growth all institutions, got but just it demonstrated continued our little still

Very helpful. Thanks.

Saket. Thanks,

next question Securities from our Wong with take Please go We'll Ken Guggenheim ahead.

one for you Thank is taking Shantanu. This you question. Great. for my

tool history mobile a down your professional have guys you light you have consumer, had You the bringing editions. of to edition,

I man platform brought prepared the across your that Frame.io, in addition think it of Or envision opportunities bucket? to still remarks, down they in the guess as this is the creating do be I to you (ph.) and customer a additional prosumers? mentioned going be sort professional a base, of that you could teams, enterprises, Consumer

Creative outreach the livelihood. effect make that a them I to It's has I area a for products been that think enable to deliver of to us But us. of mean, the Ken? mission-critical expansion looks and business. halo important very always segment a the into consumer business at about look how as on at talked tuned the as you big when of already But is is what know, meetings that, front. even we you communicated our well analyst that stay that

talk served broader roadmap as solutions some intelligence That technology, think customers. have very this and a we that excitement about customers exciting product we using our some and things fulfill creativity the to broader to all set have of and underway. and will vision to I artificial Sensei with be broader target start of our for and we great

also billion new opportunity. net ARR about it's that us. I when excited talk be already that over It's delivering very the more that going business really you to we're products, adding what we're call we customer for and our So, is going about X.X expectation we're portion that A a more targeted to communicators of prosumers. segment. And of big a at big for opportunity, QX. would or as phenomenal fact mean,

Got it. Fantastic.

Looking forward to guys. MAX. Thanks,

you. Thank

ahead. Kash Rangan Goldman go our from next take Sachs, We'll please with question

that some will a as means Particularly we opportunity you of And I dramatically but remember, past the activity that, always risk do, to to not afraid can stores, would cetera. that, we collaborators or Shantanu, thinks in just the ten not, fantastic and you talk big you final the quarter. Adobe's that get of what to market meaning joined is you and secular Wall you I think been on any put adjustment about curious vacation, is Shantanu some creators, mean they side the expansive you takes e-commerce seasonal what's I'm and pretty that your actually on don't a thoughts about be all the by But I much. what backseat what Street shopping, a the acquisition case available This the bit secondly, word could used total of pattern will of MAX result just for of content start years negative, just out or then, team, in video transformation point. made might as be where activity therefore, solid. online, have adjustment that business it's we but talked the very can and a et could Is Congratulations digital that so. just thoughts to maybe new so you Thank as the a incremental it, go scope want photos people that term a get jumps what on too addition as not greatest much. an to there the Thank trend how is you Creative XXXX your summer but at on go and reinforced

to that is if opportunities I really mean, I a isn't expansion I for that mean, that in signaling and first streaming Company a leaders all delivering plus look we've exciting the a service. be isn't after really played happening think while relates Kash, It's the Thanks, video that's streaming one played Premier we've delivered. as effects lot. services, for plus these the But around your that products sadly out right? video, there continuing Photoshop what's us question illustrator of to and with been it used from you category, and at out.

among video companies more And only more deliver genre is so, video. as it streaming services to and have insatiable relates I to requiring the demand think and more these consumers for

bit All a about as Netflix little mean, talked now, as of a we're doing partnership that what we works right I with well.

now of locations different is collaborative in people happening All that through a process. with

faster So going to our make incredibly happen anytime you audience. can quicker, to take a and That's only that right the creative. idea be customers. to valuable

is think trend And to only that so, I continue. going

who to exciting different talked that's such have in said; good frame-up. of can really acquisition it's feel and with so, production after people and as about what's been used video we've space frame, come And the we Hey, it. A product, a to frame of the use in bunch we the more Adobe, do happening that our we we particular great but with own think videos

optimism around I creative being of whether of done. that's think just videos all being able agency, lot or a it's, it's gives reviewer it's a us the whether the that, scriptwriter, that the So, corporate to whether

as enterprise And so TAM lot I certainly, well, can product you certainly that more associated add with it. think a as get you as

typically do. as we cash our We TAM's will update

excited will front, really about as terms as our to well XXXX. QX but how think or I we referred Jonathan talk about about that. on you our talk that do we'll And

Solutions. of at thirdly Because just solutions, DX and second other and big your and our not to Digital online. are say whatever to think you're had and look whether want we success call driver strength. more it. online a I external shopping they is going and that they the around we area to over more continue in mean, doing frame to to at in-store a stakes think in, so only are companies solutions but multi-channel And stable are part business of that it be that of QX. question shopping I look the it's how think our I that's the partnerships and shopping for I omnichannel, Experience that just today an Adobe also when And we the exist plugged the

of. a like treats know you customer we solution You a that need that

going there that's an about one results. for think have I be at imperative probably thing is do of mean, were we stronger look if were some in mean, of so, we what QX And companies. you items as had usage should to I I talked and that our said. actually than non-recurring that of a There also with to commerce. couple only had part

usage are that And so, we ramp also up. seeing

be as about the that. -- of wanted and our companies. we So, acceleration. DME just in more I end and strength Adobe, as solutions, going to but terms and back Also, expect That's talked the said, and not And seasonal for shopping and get we quarter more QX education demand will in shopping a all to the as of there's just there within we comes increased demand the store. the as online lead to are activity,

you fantastic. much. so That's Thank

Ken. Thanks.

We'll take question go Please our Cowen next Company. and Derrick from Wood ahead. with

can coming been see have think my decelerated. products in ARR accelerating taking growth this though for licensed Cloud that outside Because question, growth come back Document me, Thanks business. the with some of was even it from looks, John, ARR actually there lieu that I total may Document to wanted you to revenue from revenue to perhaps, and total I strength Cloud products.

and So I right is that looking the ARR not we'd revenue, and be guess. total assessment at

we it's a a that given reason ELA, and you mix more licensed should expect towards is to as into big for So, QX, shift there look any quarter, products continue?

well, Yes. certainly, mean, I No. we yeah. --

as of expansion to QX I [Indiscernible] we still and as of well. migrate basic to But going as terms strength well. see spoke just in see in ELA the You're QX, in customers

be to ARR. us is want to ARR for you going drive more still important So and where

over growth. I think going last drive outsized sizable that's, that. fluctuations going have in LA going to really a we're year so to is that's we subscriptions But opportunity, still be has a contribution, will do this give And a frankly, but and impressive. and driving perpetual, it's be buy revenue in it those QX, us customers really -- us subscription the not to It's healthy to always been over strengthen growth, give our strategy. some that

Yes. Got it.

Okay. Thanks.

question Lane Please next with ahead. Stifel. Parker our from go take We'll

the Interior, do the could my organizations I using historically was relied and what about wondering a talk wins if particular of the for the they're organizations maybe of set public a you thanks sector Thanks. Sean, Cloud of Hi, of Creative for or applications. Creative upon features Department application taking nature hopefully, the Creative these needs like in question, types of versus with Photoshop distinct embracing like

part, the that people are To think are an think your sector important it's just important becomes standardization I the point, is has amount I an been of And amount the content the Workflow of becomes important that then issue. management of always issue. but creating, that public an of these content products. and the creating the we distribute our licensing And called of have increasing. the really ability content people when products, adoption. evangelism user And companies. named do download things know, And we the and enterprises the you to well more is when we did one deployment the within what how, offer we training we and leads enterprise agreements, to

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named are these really solutions into I what evangelize the Well, those good also to and we trends to leads higher enterprises. said, are continue, true. within more ability making of Good going but a all we've these as do are. job think deployments, we that training these user actively macro done I sure them get fall, We allow ups a to with band. of ten

better. with think sales getting going execution enterprises, on the these into the front I that's better and So, associated

Great feedback. Thank you.

We're up hour. coming Operator. on of the the top

questions. have We Thanks. two for more time

Sills, of you. question Bank Thank second America We'll last our Brad take from Securities.

guys Thanks, question my here. for taking Great.

channels taking Just Customer observing seeing more with multiproduct there that regard get here here, more CMS? you're view automation workflow of broader I'm Are trending customers in XXX with automation, there. Are recently, of to of that any You've these stack the curious got e-commerce, past? marketing view been initiatives. that your the across with Cloud. marketing deals much. are so you multiple you're what any combinations you finding to Thank in Experience here across

selling suite of, terms us, doing, on we It we sell I is we're actually Brad, for it. offering? know, the And think update do you in has what which clearly is That how been we a give push how indeed, entire are you an year every how.

getting, about the the so, And stack, the insights do data from is unique what's we're and us, our digital perspective, marketing to the completely commerce, presence. and ability that

I have customers, think Company we waivers think profiles. has delivered, I as space of this we've real-time Any it. scalable, ahead it of nature billions years relates we're of large it's we've and to XX what unique got other that is

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interest of lot But exist used and data. third-party a think right. I think to acquisition about I customer

of the think BXB hey, really very And when the answered business a remember is that a And multiple behavior? this we dupi only channels? that up Company what as Do have have the control use we're how this control they on And with but talk how even not BXC to we Adobe.com, Now about people's as and relates in of it. of of have what our Platform. least. playbook can a we and opens data. ideas mean, can can about it say, that to using utilize fact I we I terms Adobe in. And Experience easily business. the our lot go Last first-party we're be happening on it's done have that

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that -- what customers. really that's resonates think I with

hear. Jonathan. to That's Thanks, great

Thank you.

our from go with question final Please Thill Jefferies. take Brent ahead. We'll

there business. in you're just the to And like -- the QX, the to given in DRaaS walk and feel in keep seeing DX terms anything [Indiscernible] as Thanks. it as just QX. keep from maybe the Can you you're Shantanu, the drivers that this mind given what commerce powering -- through John, in seeing you seasonality comps to that Magento with acceleration? just accelerating of tougher for through of relates

I both revenue Brian, that think drove what as well really subscriptions was the as services.

the last on you really reliant As know, ecosystem. But were if a XX large the again, partner services, over months.

high. about, they interest we've are always As talked How all is the implementing it.

they so for large in if look QX the with think respectively, I year, it, as and at these about March, solutions, to that's you invest point take just I that as and implement back, I we you and think that the posted think opportunity. subscriptions, of to something you be increased point, and and we -- say, continue so in it they as And excited guided and driving continue need continue well a we it, to to to XX% we to if step your we revenue at had in out comps, XXXXX the XXXX beginning as XX% like

So, is waste front-end no in a I I people time were, Again, reality, of there business. concerned to as And indicative this with in since priority. far little actually opportunity some on said, implementing but up to right bit deal center, items. an commerce the This there is. those and we're staying, that it's think depends a the terms of we had it. as to think the there's is got in also more with new it's terms couple a are enterprise we've of as the non-recurring to quarter, business of that maybe in do usage

Thank you.

ahead. Go

No, go ahead.

Sorry, Jonathan, I didn't hear you.

no problem. Yeah,

to QX the on course, quarter Brent's question going top on of seasonality-related Just anyway. as kind in just over commerce, a strong of commerce

Given the holidays, spending trend.

think momentum. into to trying so, excited it's well, right, there us have I up we're we the just opportunity the as great about set And

the I think performance again, really in end with expect QX. And We strong we pleased business. question, was overall, year I our last since of were our for mean, that do a the

we roadmap will As all opportunities against and and the three have the clear that your large customers and continued it's you optimism of targets, executing that across exists position our ahead those feel clouds unique this we those serve us three well saw growth we're all well innovation that from win, fortunate. our of that us of and three just gives we

the future more every fact the work to as hybrid and think companies of of a only will emphasize digital priority continue size. it's I that for

joining thank Jonathan. max, trends. us And the look position and that, well in every that's forward need that's drive whether unique. We is automation to customer management. back And for earnings Adobe to so, to digital increase macroeconomic do to content I today, whether as with documents, very call. the whether believe more that's as business we thing personalization, will an how to for I we particular But those experience of understand over QX you turn it

And for on the here. us to Jonathan thanks call joining everyone today. Thanks,

the I in will us interest call. we you connecting at ir@adobe.com, Released more and look soon, we contact appreciate we press. have Thursday, of our Adobe, we day, in this coming the And earnings with details look December and free in mentioned QX to to any questions, many if on your XXth, financial sending be you forward analyst out you virtual As speaking again to concludes weeks. forward for feel the today, with