Adobe (ADBE) 11 Dec 242024 Q4 Earnings call transcript

Good day, and welcome to the Q4 and FY '24 Adobe Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Steve Day, SVP, DX, CFO and Corporate Finance, Interim Head of IR. Please go ahead, sir.

Good afternoon, and thank you for joining us. Dan call Wadhwani, Shantanu Anil President of Experience; the and Adobe's Chakravarthy, on President Digital David Vice CEO; of and me today Narayen, are Chair President and With CFO. Executive Durn, Digital Media;

we which and fourth XXXX results. recorded, year discuss Adobe's On this being will call, financial is quarter fiscal

website. prepared financial results on can press as release and You well as Investor remarks Relations find our PDFs of our Adobe's

as of The uncertainty on is and call, product forward-looking our contains including and results may risk, targets December information differ those financial today, statements statements. these materially discussed this in Actual involve and XX, from plans, that forth set assumptions.

review For earnings Adobe's release more and filings. on information risks, please today's SEC those

non-GAAP financial measures. call, this On and we will GAAP discuss

growth well rates. as results Our as GAAP reported include currency constant rates

now During Adobe's executives Adobe's unless release stated. Non-GAAP currency refer our Relations are constant Investor and to website. the otherwise to earnings this presentation, in will call available over turn reconciliations Shantanu. on growth rates will I

Thanks, joining us. thank you for Steve. and Good afternoon,

QX, Experience of XX% $X.XX growth. $XXX XX% and our Digital growth. In ARR subscription achieved we billion, Media representing net million, of we business, achieved year-over-year Digital of delivered our representing $X.XX record In billion, revenue business revenue new year-over-year

Digital representing us Adobe. in $X a $XX.XX AI innovations, mission-critical was $X.XX and of and $XX.XX apps. for in was year and year-over-year in Adobe Experience XXXX more with billion crossed several the Media to our billion. year cash the The revenue year-over-year earnings of share add than business new XX% the We per us share for and providers native billion Platform net had non-GAAP new Experience $XX.XX, We of investments marketing ARR of growth. in was record in and achieved X% $X records short-term enabling RPO growth, exited world. making billion billion, milestones per GAAP representing of technology $XX.XX respectively. of $X XX% the We business with one Digital billion and revenue, ending surpass book earnings

a family, also technology delivered recently, of most was Vector, user Firefly has multiple platforms. in Adobe be including product where applications. we XXXX innovation, and, generative content, commercially Imaging, designed a our comprehensive quality year now AI We the Design foundational video. transformative AI models introduced control output offering models in and Adobe for generative levels set of safe of to unprecedented creative

integration easy set for Firefly-powered and this app. tools The creativity with record Experience a and setting past broader deep across is surpassed reimagined driving Document our across month record. generations flagship in Cloud, Adobe applications create-anything productivity customers of We every Cloud quick and usage. billion, quarter XX customer new with adoption the of Cloud, Firefly and a our Express, Creative

audiences, journeys with Assistant engagement. at native from customer infrastructure trillions and productivity We've and document PDFs around and and Acrobat to of fundamental even Platform automated AI successfully in personalized powering Adobe the decisioning to required world. accelerating truly Adobe enhanced Experience Reader, unlocking scaled the We're experiences for We greater deliver deliver apps channels value the scale.

solution, Cloud accelerate The stage GenStudio for campaigns. the Adobe marketing Performance content, expression integrating advertising extends by the in high-velocity content set empowering data and GenStudio We to Creative agencies, of together and our enterprise Experience with delivery drive content and Express, enterprises end-to-end Marketing chain and Cloud, freelancers, bringing integrates supply an AI and content to activation. creative of revolution release Adobe

to over discuss it the turn Media Digital our momentum now David to in business. I'll

Thanks, Shantanu. Hello, everyone.

value new just and fueled businesses. over ended which Creative of and the first and engagement year revenue our net as result customers on which bring in Experience new the ever as Clouds. grew a time Document Digital of In and and social adobe.com together increasing We GenStudio, Firefly to Media record QX, we enterprise year-over-year, billion, XX% mobile, of Creative both for well and accelerated achieved product Media ARR innovation, net innovation ARR for with million of Digital traffic by our $X through $X.XX billion as Services $XXX

Reader. in generation. FY productivity the standard features and PDF and revolutionizing continues 'XX accelerating major Assistant Cloud Firefly desktop. editing introduction Liquid like step them Mode to a smarter way image AI Adobe took AI people Assistant the other We On engage Acrobat mobile, the Document forward and digital AI in document integrated be and are through side, and with web of with Acrobat documents, and global insights, the faster for is across

Xx and its Edge, extend A now to productivity Teams for tasks study Assistant completed Chrome desktop, languages, and document-related in is In web for Microsoft with AI we mobile average. into the faster contracts and their documents. AI Assistant found analyze to integrated extensions. our recent that support available ability and value continued larger Acrobat on leveraging across additional and AI scanned documents, QX, specialized users

images double In to customer content. Express driving allow and quarter-over-quarter, Acrobat generate with Adobe We deeper stylize value. saw our Web, AI quickly users integrations Assistant conversations

achieved ARR ending year-over-year. $X.XX set billion, of In QX, year-over-year. of XX% Cloud Document $XXX growing $XXX Document we We a with of record growing net XX% Cloud for revenue new ARR million, million

grew channels. platforms. education Laboratories, all continues Key a across and across and include our the Acrobat Novo Pro a Cellular, Cloud grow back-to-school Creativity drove for Permanente, U.S. and AI the Cloud Information over offerings; Other billion paid app to up Truist, continued active wins new users single video 'XX million which monthly MAX, demand strength FY users, of enterprise strong also Document surpassing year-over-year; users; Agency, XX% XX% funnel Defense Nordisk, active desktop mobile, free nearly XXX Kaiser GmbH, year-over-year, include: season students. Acrobat U.S. showcased streaming for of offering Premier through and in a Creative Abbott X.X Conference, content and Adobe momentum views innovation strong BWI Systems over as customer with both State. year great Department highlights Creative had Cloud with Web top growth monthly of in Assistant in

and major strides with We to models, models design of Model on incredibly richer AI X, their of integration introduction our into brought with the and models, video Firefly powerful Image are their incredible all-new world. the our the Lightroom, professionals model. and have models generative have own deep Express These vector enhancements made millions around Firefly our InDesign tools Premiere, value like to Photoshop, creative

our We and XX have and Cloud grew billion enterprises. in million. cumulative in was which revenue, crossed scaled through to Experience the together services the content need generations $X.X continue Creative ARR In of now generations. we accelerate achieved growing year-over-year. production Net Firefly new Clouds for have introduction addressing $XXX and GenStudio, QX, brought XX% Creative billion Firefly

to ecosystem reach. Webflow, strong in our with include: and and of a Adobe in of access students increase highlights with marketplace significantly part social, year-over-year year's plugins the XXX approximately Express integrations HubSpot productivity Premium Other Wix, Express ChatGPT, of leading by X,XXX growth Express businesses adoption XX% Adobe customer this the increasing back-to-school available collaboration number Box, an and with over as Google, the in and Express quarter like season. saw Slack, apps

making and Express. The public Premiere This launch early unique integration it and broadly garnered feature of Pro drove massive and in XXXX. beta in the Firefly more limited Model its XX% forward a we interest, customer available of beta Video was to Adobe look into Vector number Premiere since Xx MAX. and in and generation Illustrator, Pro image it increase Pro to Design integrated and Enhancements include the Premiere new Firefly Photoshop, at users introduced models Image, faster capabilities

Lens and editing Strong premium Generative adoption as quick and Mobile as which with and of customers Lightroom Remove actions innovations discovery adoption Blur of embracing well increases like streamlines features.

in of Annual Mac App recognized Store Awards. as this Year Just Lightroom Apple's Adobe the morning, was the App

VX and include & Procter designed Key commercially content stakeholders. The management Coca-Cola, to Nestlé, launch Frame.io video Department Johnson, and custom enable are Gamble, and to creating American as editors end-to-end Services customer enterprises Firefly as of that to Express, Johnson ease and continued ramp for models collaboration to robust the streamlines capabilities of adoption APIs given projects U.S. the such their & and production, LVMH, Alphabet, wins Tapestry use new Defense. be of Pepsi T-Mobile seamless between it scale editing creative safe. enterprise the

product has the set stage value to another evolution Media users, existing to AI increasingly business create year Digital expand and clouds 'XX releases strong we as in to and and deliver solutions. differentiated our more ahead integrate FY for Our audiences, Experience business Digital new

as well Acrobat accelerating continuing We delivered them AI freemium will on Web offers, Express, do in adoption Acrobat to performance to access as as applications growing flagship Assistant, business innovations which our our and to core web Lightroom and Mobile mobile. expanding 'XX; our and FY creative in strong well by: this financial as AI including by expand the of bringing

solution Firefly soon will addition, introduce that additional creative video as offering includes comprehensive monetize customers, higher-priced In our will AI to and existing professionals. models value allow increase for provide us new users, we ARPU. to This new a a

our by and capabilities And look the response delighting now exponentially further in FY scale GenStudio to to thrilled I'll forward in FY excited it year release Services, 'XX saw with customers ahead. to to 'XX, integrating demand significant pass Anil. production enterprises in the Firefly solutions innovations capabilities content into accelerating We're provide with which with new to their to AI. it

CDP, for to $X.XX revenue billion achieving quarter The with leveraging in in representing Experience of The and billion the Fortune billion, quarter native Adobe Real-Time of surpassed Analytics apps, Subscription XXXX. a revenue was the everyone. the Journey XX% in a solutions. Optimizer $X.XX year-over-year fiscal revenue the the close now growth. companies $X.X Hello, Journey David. Thanks, had XXX Platform Experience of and business billion quarter, business $X these Cloud strong year, for book record in XX and Customer

BXB experience opportunity companies partner as Adobe technology and for customer strategic Both accelerate growing. acquisition, management and retention. are to market their engagement BXC and large is selecting The customer

and empower simultaneously drive customer leading to spanning businesses top while solutions, delivering growth content, gains. journeys Our productivity line data

and generate personalized have The scale been journeys. empowers built marketers websites. to Adobe content Platform enable Assistant AI automate delivery Adobe audiences and experiences Generate delivered more their personalized enterprise customers and innovations the dynamic on our through accelerate compelling tasks natively at Experience Variations creation of and experiences Experience engaging AI requirements. to Manager enabling and to governance to new satisfy AEM, have deliver customers provides we

planning, which Workfront, content enterprises and across the and insights. management, to and Analytics GenStudio, and Journey supply for GenStudio and levels agencies Journey Experience creativity of Optimizer. Experience Cloud, content workflow applications multiple enterprises including Express, Adobe creation Manager, Creative transforming and asset delivery unlock Cloud reporting with across chain enables production, and and new activation and efficiency integrates are natively We Adobe Customer Firefly,

brings ads, display Marketing for integrated ads, an content. by to a great on-brand banners, Performance application marketing offering addition need e-mails Adobe and marketing to of foundational deliver preapproved brand voice, agility. portfolio, teams images channels that GenStudio with It is paid guidelines create leveraging teams around and GenStudio variations the the including to social together numerous that speed content creative define requirements a with brand, and

since demand Marketing CIOs GenStudio and era address the We of is at the Performance AI Adobe are CFOs. transform marketing its to for seeing customer general how availability CMOs, in for to strong GenStudio answer MAX. going is for

holistic directly highlights able of Snap Other Experience soon AWS. full to and Meta, Enterprises ROI spend. their Amazon expanded power performance view Adobe be a Microsoft Services with native on with Adobe XXX, partnership ad Manager leadership Advertising, marketing partnerships Integration optimize Amazon on across to Google's our and teams the available campaign of public and extend GenStudio Campaign Platform to the clouds. Web of include access AEP in TikTok, offering make apps will

JPMorgan Gartner Adobe's and Commerce industry adapt journeys Magic on in as Bank Chase, Air bookings behavior. in CIBC, our helped BMW, our Fanatics, Fargo. Quadrant analyst Allianz, AI the Marketing of for premium Samsung, based real Disney, Express, for Wave quarter In critical recognition Centene, customer add-ons Wells Tesco ability wins with close including in and capabilities PayPal, delivered American multichannel Cross-Channel us time the Gap, Canada, global including America, Digital to marketing Cisco, major Gartner differentiated ever, recognized Hubs. customer tiers for innovations the analyst Strong particular, and Forrester GM, such customer largest key reports,

respectively. businesses for trillions around Digital Digital Monday both Friday $XX.X which and jumping billion, hit Insights, that data Black X.X% Cyber billion reported points, from analyzes sales record critical imperative XX.X% remains year, Adobe highs of growth and $XX.X world. the and of last a

the hit billion, expect We $XXX.X year-over-year. full season to X.X% holiday up

enterprise go-to-market GenStudio our our of that Media new expanding these go-to-market integrated to unique Experience these availability the teams and Adobe field under integrated capitalize FY has globally optimize umbrella. further across in Digital offerings With the the on solutions to new to breadth solutions We're opportunity 'XX, our organization. of cut Digital a sell

for that in QX. included We early this services Firefly seen success Express have strategy and

in of As and anticipate QX, our the we year enable the throughout acceleration field we of organization worldwide this rest beyond. pipeline

of confident momentum into I Dan. our to are We continuing and it XXXX. will leadership pass now

Anil. Thanks,

report highlighting results, today businesses financial covers earnings growth both Our and drivers and I'll with our targets. 'XX across QX FY finish

have the revenue, We we and delivering performance driven product cash are proud flows record investing of EPS operating aggressively FY in while in AI innovation. 'XX,

Experience records AI bookings. including GenStudio products, Media monetization. and premium Digital AI finish with the strong Express, in new expanded portfolio net We New for DX had Acrobat have of a releases, driving ARR and Performance Firefly to services, Marketing meaningful Assistant, Digital year proliferation tiers the and GenAI

constant represents XX% growth GAAP for and EPS non-GAAP as in growing Adobe the year-over-year, which year X% 'XX, and revenue EPS $XX.XX, year-over-year In XX% record and FY reported was of was $XX.XX $XX.XX respectively. currency. billion, achieved

and 'XX year; $X.XX $XX.XX billion; Digital RPO net revenue the approximately $XX.XX FY cash Media million shares of of repurchasing of revenue flows and the Digital during new operations XX.X billion; our financial Experience included: from business exiting year. of Media of of Digital highlights billion; $X.XX stock billion; $X.XX billion ARR

Digital In and per was highlights FY quarter diluted RPO the revenue billion; XX% flows growing revenue to billion $X.XX Adobe share diluted constant as year-over-year Media fourth and operations represents of earnings in earnings financial included: million; of was cash $X.XX, record growth billion; revenue $X.XX ARR and quarter. XX% of 'XX, Digital and billion, the achieved which new QX Digital share reported year-over-year, $X.XX per XX% Media net $XXX billion; business currency. Experience and of in of of in non-GAAP added $X.XX respectively. $X.XX GAAP $X.XX a QX from

revenue with growing our ARR book of currency. Digital in year-over-year as Adobe Digital $X.XX of Media of represents the revenue $XXX We which Media which reported ending we growth year-over-year constant billion, in constant $XX.XX segment, million, currency. as of Cloud exited and In currency. and our Document ARR, quarter constant achieved reported XX% business year-over-year represents QX XX% XX% growth in achieved billion

AI drivers and delivery Acrobat subscription demand across $XXX such customer across and enhancements million quarter business Document market strong ARR, growth all In driven as accelerated the enterprise. the Acrobat French by extensions ending of language quarter, routes adoption year-over-year book currency. Fourth added Edge Document and and and to of our seasonal constant and Cloud in geographies; segments, new net we Chrome; and growing and Assistant XX% ARR mobile and growth strength of support; German Cloud monetization web included: product of in Reader year-end on

currency. ARR, $XXX in quarter growth Apps Cloud Enterprise XX% in drivers Fourth achieved Teams, and strong subscriptions year-over-year Pro, single new strength enterprise. Creative our Cloud growing the markets; $X.XX included: constant across of and and We education, for Express across which demand business new subscriptions Lightroom of ARR Education; Creative in Acrobat for the represents Cloud Adobe in in individuals, apps Creative and for emerging Creative Services SMB, for momentum XX% Firefly XX% In revenue or we ending growth Photoshop; of All constant adoption quarter, added enterprises new billion, demand year-over-year of currency. book net million Creative with

across XX% achieved by billion, of subscription year-over-year with verticals, Customer services; the EMEA Experience Customer constant to Digital growth reported In XX% Fourth geographies, and year segment. included: Digital Optimizer, constant Experience Digital revenue Turning quarter year-over-year including or Real-Time drivers subscription we the growing Journey which Adobe quarter strong and financial in Workfront. led the including represents ever our revenue growth in $X.XX and Platform, bookings robust multiple Experience as strong QX, U.S. revenue and to was Experience and Analytics growth Journey XX% performance largest currency. billion, finish currency. Manager, Data $X.XX Adobe

FY growing in companies. and Marketing solution solutions Digital of retention for AEP business ending by our billion with and of the greater bookings and 'XX and interest with Experience year-over-year; GenStudio XX% Momentum XXX momentum customers for offering. $X.X apps our being leveraged XX surpassing for book with Continued GenStudio umbrella Performance than across with native new strong enterprise strength Fortune and our expansion

on in GAAP reported. Adobe's quarter was year-over-year non-GAAP and effective tax billion, the a growing growing exiting basis XX.X% rate XX% a QX XX.X% and as on basis. was RPO $XX.XX XX% cRPO

billion, we repurchase In the billion flows entered of record into was $X.XX ending were a and cash $X.XX in agreement, authorization cash in short-term XXXX. $X.X share quarter $XX our billion $XX.XX and Our we March currently billion. from investment operations exiting billion QX, remaining a granted position and have QX

end Now the financial 'XX We year during ending have and a $XX.XX $XX.XX a entering the rate and is 'XX Media in FY $XXX 'XX and XXXX of FY basis million investor ARR FY revalue decrease end to at measure turning to to our Digital balance ARR data year-end. targets. billion fiscal currency ARR our FX in the reflected constant billion FY from on sheet. the between of resulted changes

We to a of result of move the as million offerings. exchange continued FY expect 'XX to the perpetual subscriptions approximate smaller effect impact an $XXX from and revenue of foreign headwind a

and is add-ons. to ongoing into financial new subscription introduce an targets Factored our strategy tiered offerings

ending FY of targeting $XX.XX of Digital of $X.XXX per of $X.XX billion, billion billion revenue share XX.X% to Experience earnings ARR billion; of to $XX.XX. revenue revenue of $XX.XX; $XX.XX of to growth and GAAP 'XX, book For per $XX.XX segment billion we're Digital revenue segment $X.XXX earnings to Experience billion; non-GAAP billion share subscription Media to billion; Adobe Digital year-over-year; of Media total $XX.XX business $XX.XX $XX.XX to Digital $X.XX

non-GAAP and approximately tax margin XX.X%. of expect non-GAAP operating of approximately rate We a XX%

of revenue earnings to $X.XX billion $X.XX targeting: Adobe fiscal 'XX, to $X.XX subscription $X.XX; per For Digital billion; to $X.XX share segment non-GAAP to Experience earnings to Experience revenue $X.XX Digital billion; Media total billion of $X.XX billion GAAP $X.XX we're share of billion; QX and $X.XX revenue billion; $X.XX Digital of per to segment billion of revenue of $X. $X.XX

we operating of For and of expect approximately approximately tax margin non-GAAP QX, XX.X%. XX% non-GAAP rate

to outstanding innovation, performance, achieve product velocity and discipline, robust financial I'm positioning to us and you. ahead. In Shantanu, strong year revenue leadership, proud of in combines of growth back the EPS summary, our which

Thanks, Dan.

again recognized industry This once Innovators, The culture Street XX Fortune's World's Technology, quarter, was list. our Forbes and Employers, Workplaces Wall Fortune's AI Best and including Adobe on for leadership, and Companies exceptional Journal's Best Best-Managed in

At announced education develop digital global skills marketing MAX, career and partners aimed AI literacy, provide we million workforce, working initiative new the using Express to platforms helping with next-generation and nonprofits schools, content a certifications Adobe at online learning training, to modern in creation and thrive pathways. XX learners and

growth. digital strategy market represents leadership, all, businesses couldn't innovation, and Adobe global massive document Our delivering for customers market opportunity. an to unleash set on Adobe foundation better ahead. productivity massive creativity to to executing expanding Adobe power and the be build opportunity on financial its and category a and beyond. and profitable Magic continues We're accelerate strong transformative performance for of addressable brand XXXX positioned of

take questions. and you, Operator? will we Thank now

come will [Operator Goldman [Operator first Instructions] Kash Instructions] And Rangan go question with Michael Sachs. Fargo. Turrin next Wells to with We'll the from

add about was into a if some newer forecast, GenStudio. I you and could you're newer, second those offerings thinking Dan, newer how that, they're by accelerating innovations, think conservatism as just how adoption incorporating you David, maybe commentary higher-priced integrating things, into including given further efforts. And these a hoping on just your the expanding just on there's few you're you Firefly potentially prepared remarks in expand of if useful. curves focusing of or also mentioned any about how just to can on part, efforts Firefly

Sure. go and ahead Yes, started. get I'll

amazing focus AI frankly, So it has a so excited. we're obviously for area very been our has And rates at been of huge community using us.

imaging, our we've we about including made, billion talked of train we design market about one the the really form the really things: the is three does into commercially is the with $XX as also CC kinds vector set XX the incredible heard we that's the difference past. And We Anil's to integration our as what in in well. X products, but function now dollars, these have and in flagship models; also these generations the and foundational we You video in of control the comes DX that is sorry, remarks. investments prepared between make Express the models models. into that products beta model; everyone increasingly, well. And applications course, two broadest in down -- applications in else We've talked and we of but the bake audio and safe, in and a not do billion way the what Legroom of

things go So critical differentiator is and the for foundation of that part forward. durable we of set us a a as

we an Now next the have further create Video going to introduce as early Model, that's our expect which in Creative offerings. to Cloud we tier opportunity year, market to

generation video I'm gives ability result, there. you, And much start a Creative a sure, actively as activity than to image generation. higher-value more Cloud tier the to understand, it As us is

start. this In that's -- year, to that, -- a been great addition That's we to we introduced Services. Firefly off introduced

well. And then off from personalization just Acrobat an strong with Assistant. all for host we is and a this scale on AI call at scaled everything we're that. And are any amiss localization have scale couple get Pepsi, lot bottles. not it that particular, is A incredibly it are for about everything companies by this We last, them, to merchandise using doing using their seeing customers Gatorade leveraged for at for these start and very the Gatorade brand, accelerate. of at personalize content engagement for to see productive have to include very, their starting to user buying to Assistant been with other scale customers in we we talked is of to production raw continuing content in that as or enabling AI a of production. They're Tapestry. they're

has given lot built going FY we've this really our foundation the in of lot for value a the forward. apply a our It's base. we great intend it's for all customer us we to and 'XX. optimize of signal that as us from And customers tiering So learned a

Yes. contributors the of future the that's about it's it the DX, all relates and bring David's that GenStudio. And products the in how innovation customers offer the is of been. greater I 'XX on meaningful innovation building segments Express, great just our they're today can flight. as as would to talk We to AI the the of like those today as Firefly, the out tiers we in in ever natively premium financial value Assistant, comments to a well products and taking we access. deeply FY velocity of to additional on integrated life see momentum extend further is into than guide, we called we performance say The extrapolating good products, view thing we that point pipeline innovation,

looks All of the like and XXXX to this meaningful in on 'XX. FY the contribution take based together strong have comes of perspective a what we that start

from our next with Zukin And Research. we'll take Alex Wolfe question

net circulate driver broader guess you thinking seasonality more to narrative to Media -- of methodology, the terms It something of the then year Digital from growth be through the for showing around of of see the get kind the is think maybe terms Firefly, as Media you're from up DX that I in being when there. the through, ARR? maybe business? talk new GenStudio? linearity in how we Dan, that And about net in growth ARR the to business, going be that guidance think part that alluded you just would that about anything, should Is or And given new can you meaningful great in for to color will AI the we how business? point the some new Digital

Sure. take I'm that. happy to

had conversation the all, as about And we mentioned, 'XX it. this we how we're we're of yes, FY really seeing in Media momentum first into algorithm the business. that past the for we've we're think carrying that excited about the So growth Digital around

So out to continuing plus maybe SMB, the into reaching context of me bit whether the V with more introduction in new lot Q users, in Express, it's seeing people in of this corporate We're let the to mid-market, past, terms whether more DX the and doing a reaching talked it's phones channel Obviously, about and or Express between through business with business of into Anil that. the working great DX a is and lot the P integrations have companies. We're large closely in we the whether growth Acrobat reiterate Express of the of partnerships ChatGPT, to a little into own P proliferation kind others, like bringing from of done our our and where a but into times that. We've franchise. reaching Box, education. do Express. talked Acrobat it's out there, about HubSpot workflows We've we're with number of that and products Reader we also of

products. customers to continued core the new pushing more our the we're franchise really So growth in into that drive addition Creative getting to in

Premier. where mix, them integrate the value get of Firefly because more with the to core backwards, models that it going access products across to are people base these and breadth are including so need to the their customer our can right get opportunity we our integrated video the applications, to Creative we're said Firefly Second, I flagship the mentioned tiers in applications. that actually core Again, introducing we And Web bullish into we opportunity the plan more video -- is the of about remember, we're terms the very they for this models. application, the needs. And the Creative with have sorry, price into as increases products, when into the create in earlier, I Q deeply

I GenStudio, Services, along Experience And do what as lastly, content, And of plays Tapestry, need to a about into automation And so does. it leading where -- a velocity, the what of 'XX excited business they Gatorade, driving space very holistic customers Firefly becomes towards generate that. And that content. integrating the has value the we the what's the mentioned, selling business we we're or for this more DX scale that a whole personalization it and have as particular, and level and host Alex, out. Firefly that that XX%. guide the Services with really solution to in others is more value-based absolutely everyone pipeline we're of in and that's of that in as products, could enterprise more into come, it escape with production hit then accelerate for that's that's that's go now FY corporate, Digital us. So mean

a given one and take mind is that's going a compared growth in is and next keep is FY the best 'XX. maybe products guides Again, year terms new to to growth. of If pricing. in of of new one thing users, the composition algorithm be you ARR But next back, different growth to the step value that year really little we've

New users forward and and that new go look the a as to mix significant driving sort growing And 'XX. the part business business. more the we into products we of FY will be base of of foundational

appreciate that, build shape the to of on 'XX. Alex, and just the around question then I And FY

growth better of the a has ARR the about a predominant indicator about continues book to growth of into the methodology subscribers, around company, algorithm, agenda share David health been, We we know ending It's the to talked growth strong guide of trajectory. of it. business We of view. driver be. new I'll all the business growth. XXXX just what have Here's guidance changed point the

people we This technologies at them really once over bring upsell. through, honed about an deeper lastly, mentioned something time we product This and cross-sell, customers. them that segment ecosystem the element. we the journey company to pricing. a how the leg, second That's then deliver that is Adobe to set is our bring portfolio, into we have of the rich ecosystem. skill into products the And great has The value to important David the

So think to rich run most as and as the well innovation, of we've that at we, market monetizing Really already important we also as to revenue pipeline as look EPS, profile, as Quarterly the about business. business we on management we way the we increasingly annual as brought growth important. the think growth. about We set think market. focus to want innovation view brought the team, less that's the be in think to of focus how as about it the the to on algorithm book business. It's and the

ISI. the with And Kirk next come will Materne question Evercore from

on could was comment sort given be delivering you're I you're think the sensitivity. wondering I delivering obviously just new value up on much meaning I follow there pricing is adoptions, there's David, so driving users, your a just unless that pricing sensitivity, I of would new pricing last bigger lever value, if incredibly important. --

more? and making walk else vectors I'm Because there just of side pricing I should you you're successful. that able more can sort missing get bringing that not all But to feels the like whereas bit a at them X on it of be know I something little people same focus you going to that I'm sort in So through on going you're time, getting is guess, -- as why the well?

monetization balance short-term versus both context that. in those, this the proliferation of we at take seriously and We've Yes. and that of we to something about have and very we look that's how talked

we us lower motion by the in of been productive as has the market, end in a bringing Lightroom, and users. Express with way, at new look Acrobat, the entered more web lot have and mobile for and you If the

and products expect market as in to paid that also us is introduce FY segment the you'll to in very When users, it so that side to and create going we when more more more converted focused at 'XX to and align comes that. is see more on value to get is And we'll continue value. this of well. And to -- enable and sensitivity price do and users both creative and certainly there delivering of of tiering new professionals, to introducing business, the core segmentation pricing freemium are what the and are business that it That comes there. we

we value we've to get automation a the of cross more and Q to amount content we chasm we see there process and to and a able as the able over and is the talked of least, there last bring P start creation not that's then enterprises, forward a going workflows core in business place So well. very efficiency as And to where bring to been are sale sort times business, because in that that there do from we significant. tremendous opportunity we certainly about value

of mix a it's these things. So

going We to are balance. to continue

to obviously that value said And -- deliver of is a come. for maintains opportunity long one products know time the we've continue the as that proliferation, are to We time, tracking. have we to we our using we believe some for priorities because top people if today, start

that And think to we right. is what so management but call, it's and we getting we're it judgment try a do balance

for that Any Dan. a you I ARR into first guess net Black year. all, new in quarter? what offer current obviously, Dan, Creative at if Monday meant, this your Cloud quick fell quarter this as to of can terms follow-up color

see Monday as our shifting of We've trend We over activity where prior time commercially of left been year Black seen we is promotions years. If in that up consumer to a about terms out this window Yes. shopping Friday/Cyber think a pattern timing. from X.X%. talking this reflect we run expected. larger we've played a multiyear behavior, about similar in about commercial and year, online our customers

can from this this even contribution X.X%. to see at was see year. year X.X%, nice step-up Cyber Cyber relative versus a though But year down a so up last last can You standpoint, from year, Monday at Monday last X.X% the you that's year, this growth year grew

that. of the around behavior Just consumer and illustrates flattening profile the

expected. as performance So

will Weiss question And Stanley. Keith Morgan the next come with from

they creative or investors pace innovation of state but talk the on of excited that lot to on excitement in excitement innovation. going in pace feeling business. call about conference of professionals, the and aren't you we guys the A about an acceleration But from obvious, apologies the aren't that from hear the And showing that right? down grew and major just Creative acceleration would quarter ARR X%. is it's Media year-to-date Cloud -- or in underperformer again seeing after-hours basis, it's Digital a today. And this I lack on we're that the the excitement. new basis stock The grew an numbers, net of point to, a on

into You're there is this I something wrong the question we're away growth not of something a innovation, right? All that's this working? brings forward the not taking is seeing will? -- is year Is share the you in there in losses? so the avenues, monetization the it numbers, part that in guiding up acceleration think direction. not Like that the if the an to we're that's is Is but momentum numbers equation there going seeing up, new not there's in the innovation. pricing investor's in the bucket, despite all leak the decelerating mind And going growth that

the middle when middle we of of from Well, ] when a Keith, targets reality the I is and then talk mean, take XX reguided and the back sharing, at in certainly guided beat issued and beginning of I'll about in we those maybe year had all I'll that [ that. we of mean, then XX the that year address we the year, think year you year, the the of you're if guided step QX, perspective, X our and feedback the the to about beginning I we year. when end the

actually, it point net of evident it that if creative, there as relates the the is thinking I'll maybe you better specifically, contribution did Creative probably Digital ARR think I Cloud the than think that the bucket versus new into and that from out in is one about Acrobat QX thing that business. Creative the Media went the to about Document

Creative But just Creative look than had see Cloud if record the from at continues a well, as growth do you Acrobat ARR. non-Acrobat what certainly, a you more it you to saw. contribution actually So would in

I world executing as the right Express seeing Pro at AI, the else the think high and Acrobat. generative because all in David bottom significant the at think adoption towards play the now, both business, nobody unlock certainly, of we this the we bigger GenStudio as about the end, in actually can. of way in what's be that. And your Enterprise, GenStudio Creative question together on the will with as this to about at we're with think proliferation with a also I scale And that business it happening the Enterprise are moves and entire good said, and a brings

you models, the ability so about significant into pace, the we And move think think campaigns space. Firefly at Services, you seeing custom about when particular that of think we in that all about to traction are that

business space, think that a the absolutely the So is lot a core proliferation creative the seeing gives communicator actually as the traction for headed the the for us Express change that consumer well. also part optimism also expectations going acceleration. well And with end. But business on we're relates our of how as doing with for on line with of it lower as in through it I to enterprise, is good the

well is To Pro about seriously. that go as see We the so but value there we business targets we others beginning the sure of to I make to the pricing It's value offerings prepared that Dan have the reflect tier think offerings that the in also think And as just you'll keep innovation segments. And see as these, point take that mentioned that on as to the the appropriate? agenda, providing and executing is not you asked, well Creative growth the that our to remarks as I tiered think and in year. want us, the innovating as the have to it. and us to we're as that David Absolutely. his you'll I think did, well continue that new opportunity

with on moving BMO. And Keith Bachman to

is of it you of the the Cloud. And quarter over the terms thinking about of and I Doc course on specifically have Trying XX% to question your parts, could, in and then the looks could Cloud of David just associated durability I understand Doc within it that, some Growth this I to durability. wanted addition if in how specifically. how just break like I continues to pieces monthly in it wanted growth the quarter. users understand terms well. And to are, context you if ask leveraging was Cloud into certainly follow-up. price, to the with of value ARR. of And on durable what strong you, grow a the the are And some to active broader the of is grew again, Doc there

this content. And and standard Adobe what for think it's what for Cloud if has the -- And including business, the foundation been become We're the the that's data that. that foundation trusted unstructured the platform about in world. the fact most accessing really the years the that is Acrobat most of business, leveraging is for it's think fact the the driving really are just has secure solutions Yes. and XX de I we're -- into Document facto that the PDF providers is of fact you

what number think of growth are the that things. is this really I X business a things of drivers or -- are there

mean, like and active you and is I that at. we users monthly stat paid a keep key looking said. free exactly is First

predominantly effective them and taking very be at are And continue do desktop used on users across free focus surfaces to We converting that users we applications. a paid Reader of that more to of to Acrobat.

and iOS also mix As the on in those we Chrome we've available noted basis. the in also integrations. a grow to of have on past, We're integrations And mobile and We're all available now devices of monthly Teams. Edge continue for Android.

that the that to PDF are the a viewing is an that. But opportunity it that that drive you One value document drive sharing link guaranteed the terms also further doing the around a that PDF growth people to Adobe to then feedback That review the then opposed surface in we to of sharing conversation so, helping the we itself. as of recipient use close in more can be to the and drives is convert. lot get see to doing things viral the and of and top-of-funnel fact in control loop

foundation that strong. So very is

a the because around a be that, PDF. at don't just security to which happen things moving, governance multiple looking can not think players really unlocked of by have been we some people that don't PDF that but conversation other they you the the in add. space, year I one at reviews able have significant with many even conversations be being of has viewing, been look and has have to big to to this is and view. And documents, phenomenal addition require documents that AI Assistant Unlike a In

really So productivity general this saw And year. that take the more really in us education and adoption of gives a that purpose Acrobat to make we what drove ability platform. it and that that's the transition

strong continues with be we're of stronger and with in entire another way MAU foundation value. takes an saying that AI adding Acrobat core of getting new actually is that's value the Acrobat terms level to So But increasing. of Assistant new the to

thing out it is that, in maybe out out documents as point, in I'll And and to the in roll and enterprises across that as we specifically. languages, add your we multiple roll to as that roll durability the of languages, it we BXB

of innovation headroom significant of made tool knowledge again, meaningful in how the terms can more agenda even Acrobat So within enterprise. as be a the

if in, Okay. That's and drivers ARR. just talked And 'XX? the is, for growth It thinking to tonight, investors additive I that will, be ARR And of about, during course consumption towards to be sort call of could leads we the wanted going it for really being as it contributor into my if about think about this is we've various in maximize FY of sneak about question is consumption specifically I about follow-up growth trying should growth? ask be you 'XX. me. a seats, really to Or shouldn't to the question,

than 'XX see to more in think, going X to in Keith, ways ARR "consumption" add you're I in maybe or X so 'XX.

consumption is video pure David alluded video that be and it. to and offering, offering The if first, associated you a pricing that with have will this, a

much With I respect Services, second on business. Firefly again, think seeing we touched to enterprises David seeing. for are and in that what in I which, the think they are how is momentum and GenStudio

that premium So us with to increase. And I relates think the you'll as also so will price business more think is, effect, it enterprise I then in see a continue consumption to offering. that perhaps

may be the what's it. actually it pricing intention is the in ARR, increased a rather consumption consumption people monitor result a where tier of the have a than is to that as driving model So but

we're that, value at And for both every a as the better Assistant another we like just user, much as but generation it's to think well just it, to it's going a to monetization. monetizing way, single tier. So like not is be that's the it get of AI be different deliver will way tracking

And moving on to of Brad Sills Bank America. with

color momentum some If it please. this the with Services of in the some acceleration we the could past, that I be you've really, conversion of there's like like good question, sounds will that [indiscernible] into seems a year, could Firefly funnel. It you, In there. core ask all provided David, franchises see integration the

how get you effort So and would unfolding that some that year. see from to updates you throughout the love on

second, you cut a out. For actually

capture before we And you mention Brad, answer that question? that. question, you sure we other Did so any Firefly, we said make product just heard your to

to the just Lightroom, et with franchises, of that across conversion Services Photoshop, do Really activity the the What all funnel? Firefly could top integration cetera. effort

Yes, of things. number so a

many So platform you're is all, and of a foundation in a first across exactly that leveraging of Firefly different right terms products. we're

even about, we've talked we as alluded Photoshop, to a everything and even connection to on in on stand-alone APIs As for Acrobat products, Creative broad-based Premiere. And but tiering Firefly a that GenStudio. from core our then Express number also a more will perspective video, from introduction and Lightroom a this valuable in be into then Firefly there. in the of Illustrator, through think call, mobile with times And offer we Services of for

the leveraging looking AI the this foundation of So at all power in we are activities.

conversion, and very excited. of funnel relates we're as to Now top it

this acquisition. XX% adoption we're closer mobile added from Again, through and Let's education market. by we've to low Lightroom access digital, and about, We're new good year. start We user is seeing web. Express excited getting more well. social, really of mobile last with as as increased very versus with Express We the end and back-to-school. users new talked strong the X,XXX and on some the signal We're seeing really traffic new back-to-school businesses this

in very we getting of So see we and that we positive user in rate. when adoption terms user are web, signals invest mobile and some conversion

these as very adding it X,XXX I do model that. be does we're to, matter apps actively using to commercially way, that to said, Firefly safe businesses. comes new the And continues So fact only when by the Firefly integrated into the

try Photoshop, in thing The and business, of capabilities. like experience faster something is AI we people the core second Creative when is are the generative of generative to the success seeing onboarding because use

the that start to in longer use had us also but proven more journeys, as they to of user retention Again, has and that been use people proliferation more we people see always you'll drive very capabilities the the continuing good well. more productive. generative AI. So we've AI, retain rates, earlier generative But noticed those

so generative And we are AI entire in definitely leveraging funnel. for the flow the

question. just And as we for pass the top hour, one the have of we more time

will question from Jay come Securities. that with Vleeschhouwer Griffin And

would the tiered noted offerings. reported quarter, so X-year mentions there in of in a to many concept you Or your were time the to current for QX more to basis? at that as which current in compared the RPO. RPO growth fiscal there XX% or you was as and over days olden is just might closer the you're revert days? functionality since about that currently tiering more for packaging RPO if a CS up old current David, for around more Would that could, CAGR? And offering Is functionality you I lower the product the expect Dan, it then product-by-product on of 'XX, was just be X-year that least in the XX% around level CAGR results that or your more at what segmentation

we're largest And Jay. seeing take business, rhythm flow ever, AEP with at around what transformational deals, the on premium large But the to continuing portfolio, I year step cRPO. get momentum and product winning do that of Thanks, quarter definitely to back the and bookings scale. side, enterprise and into guiding want the about grow what tiers I is when a Yes. don't think of in apps having exiting the

ability bringing pain Now very business, business forward, chain drive and time. driving meaningful through to the really really when content innovation then Media feel think to our about think see. good Digital and we points at the we continue encouraged customers by about cross-cloud I over I that what And together going I'm about that we're of the supply get opportunities

to And done we been -- a the credits think on Jay, What Yes. this of we've the if just Yes, you in the was as separate right over created separate feature briefly Shantanu combination tiering through. And we on learn to be question with to package last and these, generative experimentation, to of earlier, there's it. usage for we done core of that Acrobat is of a all we that able feature, people access year, access saw adding from were idea model had a features certain it's SKU that model. a going think, where the obviously, Creative applications. a then about bit -- mentioned and tiering. the the us tier what We've limits as on

the it. higher usage the the you you tier, So more more features the get and of get

again we've a that innovation But that strong think 'XX. talk the And last I had. was for better maybe, we a sets the that given since summary, about up quick even let really had first, in just me strong 'XX, question, us

we around to relates the that I as Creative done with think have, businesses AI. everything it X that all we've Cloud

well particular with portfolio momentum a it single offerings. Acrobat Assistant of have terms vertical a and diverse a in perform cases bring document. it the well for to AI into going solution the languages, more other get both great and continues we really as beyond lot as extend really customers We use of that to business as our

ahead these continue think think that us the solutions as an Document We quarter us. all was of related And in really extremely with it to together I all Experience, bringing has bringing Digital strong to significant GenStudio. opportunity that together Cloud QX

AEP and all business, how content that that's we we and the have of to billion-dollar and same can with did ideation AI can apps just do way that with with feel to the multiple required. much a amount from and like what think variations data I accelerate the the excitement of and creation I driven we

happy more look in thank to of for our us, But interim, the holidays. sharing end you we at So you QX. and forward with joining the

do We for conference. today's conclude does you that thank today. And your participation