Adobe Inc. (ADBE) Earnings Call Transcript & Summary

Hello, everyone, and welcome. Thanks for being here with us today at Adobe's Q4 Earnings and 2020 Financial Analyst Meeting. My name is Jonathan Vaas, and I serve as VP of Investor Relations at Adobe. By now you should have the press release that we filed this morning along with our investor relations data sheet. We have an excellent agenda lined up for you today, one that in lots of ways mirrors what we've presented previously, though a handful of things will be handled differently. This is the 10th analyst meeting I've been part of at Adobe. The very first one took place in the year we had only recently rolled out Creative Cloud, and looking back at how much that business has expanded since that time is truly remarkable; across my first nine analyst meetings, I was among the many staff members working behind the scenes, and this time around, I have the honor of serving as the person who introduces our executive speakers in my capacity as head of Adobe's Investor Relations program, a position I stepped into earlier in 2020, shortly after we transitioned to remote work. I've genuinely appreciated every discussion I've had with investors and analysts regarding Adobe's business throughout 2020, and I'm eager to meet plenty of you face-to-face at some point. That brings me to the second way today's agenda differs somewhat from our previous ones. This marks our inaugural virtual analyst meeting. Personally, I will truly regret not having the chance to see so many of you and talk following the event, yet we've spent this year discovering how powerful digital communication can be and realizing that a webcast lets us connect with a wider audience than an in-person gathering would allow. Given the format, we've simplified today's planned presentation, though a comprehensive slide deck has been placed on Adobe's IR site containing all the in-depth details you're accustomed to. Let's walk through the agenda. Shantanu will begin by discussing the quarter and fiscal year that we just wrapped up, then shift to Adobe's vision and strategy looking ahead. After that, Abhay will address the company's vision through a technology-focused perspective. Scott will walk through our Creative Cloud strategy. Anil will cover our Experience Cloud strategy, and Gloria will discuss our strategy concerning our people along with other Adobe stakeholders. John will deliver a thorough financial summary and present Adobe's growth strategy; then we'll move to live Q&A. Before we begin, please remember that certain information we're sharing today consists of forward-looking statements that carry risk and uncertainty. Actual results could vary from what these statements indicate, and we urge you to examine the risk factors in our SEC filings for additional details. We will present both GAAP and non-GAAP financial information. Reconciliations connecting the two are available on Adobe's investor relations website. I'll now hand things over to Adobe's President and CEO, Shantanu Narayen.

Thanks, Jonathan, and let me extend my own greeting as well. We appreciate you being here at our yearly gathering for financial analysts. The setup this time around differs somewhat from our usual approach. Since this year's format calls for something else, we'll spend today's time addressing strategy, how the business is performing, and our financial results; a full deck has been posted, much like in previous years, but instead of walking through each slide, members of the management team will present the key points from their respective areas. As always, we've reserved a portion of time for questions at the conclusion of our talks. Above all, I want everyone to remain safe and well. It's truly heartbreaking to witness the latest wave of losses, yet advances in vaccines offer us all hope that the darkest days will shortly be finished. Obviously, nobody among us could have foreseen how quickly everything would shift and how drastically the world we inhabit would be transformed. Connecting, working, learning, and enjoying entertainment now happen mostly through digital means more than ever before. This fresh set of circumstances has only made our solutions more vital and pertinent while speeding up the favorable winds behind our business. That, together with our solid fundamentals, unmatched creativity, and top-tier execution, keeps propelling our expansion. For Adobe, 2020 proved to be yet another landmark year. As with every company, our top priority has been safeguarding our staff's wellbeing while still delivering for our customers; we moved quickly and firmly, telling employees to work from home, halting travel, and calling off in-person gatherings. Our attention went to assisting customers as they shifted to digital practically overnight. As one illustration, we gave 30 million students access to Creative Cloud so they could produce things from home. We launched the Government Rapid Response Program to help local governments. Through our Honor Heroes campaign, we rallied our community into making art that paid tribute to the real heroes, essential workers; we raised expectations for digital gatherings with Adobe Summit and Adobe MAX. Indeed, Adobe MAX drew 21 million views. Leveraging the trillions of transactions running through the Adobe Experience Cloud, we keep offering a distinctive, up-to-the-minute read on the economy via the Adobe Digital Economy Index. We broke new ground in fields like the Content Authenticity Initiative, which supplies attribution capability that creators may link to their output, fostering greater clarity regarding how content gets published and modified. Our leadership covers not just the things we do but the manner in which we do them, and we take pride in the ongoing praise our industry gives us. For the fifth consecutive year, we remain a top riser on the Interbrand Global Best Brands of the Year. Fortune and Glassdoor both regularly rank us among the finest employers. On a matter growing ever more significant to you as investors, we hold a leading position, be it on the Dow Jones Sustainability Index or the Bloomberg Equality Index. Since we're fundamentally a product-driven organization, what makes me proudest is our engine of innovation, which keeps running at full throttle. Within Creative Cloud, we've held onto an unmistakable number one position in a space that is growing explosively. We rolled out meaningful new product innovations, bringing our applications onto many different surfaces. Across every one of our flagship applications, we introduced richer ways for people to collaborate. We keep pioneering brand-new categories while simultaneously lifting engagement and boosting how satisfied customers are. Demand for Document Cloud remains enormous in today's digital world, since PDF and Adobe Sign have become absolutely essential to so many companies; we shipped additional capabilities—or verbs, the term we use—spanning desktop, web, and mobile, plus through our seamless PDF services. Turning to Experience Cloud, we keep expanding what is now the globe's most complete portfolio for managing customer experience. Fresh capabilities inside the Adobe Experience Platform have been broadened so that they now cover real-time customer profiles; we introduced new offerings, intelligence services, to push artificial intelligence and machine learning further into how organizations operate. We launched new solutions such as Customer Journey Analytics, which brings cross-channel data together. I'm thrilled that we just completed buying Workfront, a top-tier work management answer built for marketers. Looking at finances, having gone past the $10 billion threshold back in 2019, we've kept our momentum without a stumble. Based on our targets, we anticipate clearing the $15 billion threshold during 2021; it brings us enormous satisfaction to grow both the top and bottom lines while also producing cash and steadily giving back to shareholders. Indeed, during 2020 we brought in $12.87 billion of revenue, a rise of 15% compared with the prior year. During Q4, our digital media ARR climbed beyond $10 billion, a landmark achievement for this company; thanks to the rigorous financial discipline all of you have come to expect, we keep producing strong cash flows from operations, generating in excess of $5 billion throughout fiscal 2020. We stay focused on earnings per share, landing at $10.10 on a non-GAAP basis, an increase of 28% versus the previous year. My honest conviction is that these financial results distinguish us from every other software company, and the finest days still lie ahead. Changing the world through digital experiences is Adobe's mission, and that mission has never mattered more, given how people are searching for fresh methods to communicate, to learn, and to do business virtually. Our innovations benefit billions around the world, with that impact felt in every corner of society. It pushes our employees to chase greater impact and to create the future. Considering the macro trends all of us witness, a tectonic shift toward everything digital is happening in every industry, and I think the happenings of this year have only sped that up. You can't stuff the genie back into the bottle. Even regulated sectors, which historically embraced digital more slowly, have clearly accelerated their pace this year. Take healthcare — it's being reshaped by things such as personalized medicine and telehealth, plus, honestly, fresh approaches for getting patients involved. Then on the creative front, we're still in a golden age for design and creativity, and design remains a crucial competitive edge, since deep down everybody is a creator; people wish to express who they are through new devices and new modalities. Creativity matters enormously to the ways we connect, the ways we cope, and the ways we learn. Education, too, has been rethought, given that digital sits at the core of how students learn these days, whether through remote education or by opening up new kinds of creative storytelling. Digital is additionally tearing down barriers to education access that have lasted a long time, and that's a wonderful thing because access keeps improving. How we work is forever changed. It's wonderful to watch the PC enjoy a massive revival as the workhorse for computing. Documents sit at the heart of getting work done. The shift from paper to digital is speeding up, nothing less. Each business process is moving to digital, since every company today is a digital company. For all businesses, digital now serves as the main channel for connecting with customers.

It goes without saying that customers now expect more than ever before, and the reason is the surge in e-commerce. In fact, a yearly holiday study backed by Adobe Analytics projects that online holiday purchases will reach $189 billion, which works out to 33% growth compared with the prior year. Underneath all of this is a massive move toward artificial intelligence and machine learning, and these forces will only amplify such trends. Here at Adobe, our approach lies right where this digital upheaval converges, and by way of technology, we think we are reshaping how people work, learn, and play. We stay intensely focused on seeing what's coming next. How do we move toward the following major market opening in order to address what frustrates customers and get ahead of what they'll want? We were first to establish, and we continue to set the pace in, three enormous and fast-expanding sectors: creativity, digital documents, and customer experience management. Our drive to broaden the customer segments we reach never lets up, which widens our addressable market opportunity, since our goal is to empower everybody from a student to a small business owner to the biggest enterprise on the planet. My view is that our success comes from building breakthrough technology platforms destined to define the industry for decades, and at present those platforms operate across the full computing spectrum, from the biggest clouds down to the smallest devices, and they rest on a service-oriented architecture that additionally opens the door to fresh monetization models. Indeed, our three cloud offerings, each a leader in its industry, have never been more mission-critical across every geography and audience. Through Creative Cloud, we're opening up creative potential to everyone, equipping people anywhere with what they need to bring their ideas to life. Through Document Cloud, we're speeding up how work gets done with documents, transforming the way individuals look at, exchange, and interact with files in digital form. Through Experience Cloud, we're fueling online operations for companies large and small, supplying all the capabilities required to craft and roll out outstanding customer interactions. The magic and strength of Adobe Sensei sits beneath all three of these clouds — a major point of distinction for Adobe and something that helps us innovate faster. Turning to the creative side of the business, in every direction we turn — be it entertainment, education, or the enterprise — content is what powers the digital economy, and that's producing a surge in creators, tools, and assets, all of which amount to favorable winds for our company. The truth is, creativity belongs to everybody — whether you're a student turning in your next assignment for school or a creative pro putting together an ad. Every person has a story worth sharing. If you look across the categories — web content, mobile application creation, imaging, video, animation, screen design, augmented reality, AR, 3D — all of them are growing rapidly in this age of digital storytelling. Creativity matters so much because this year, more than at any point before, has demonstrated how powerful creativity can be in helping people express who they are, build connections, and get through difficult times. In our view, creativity ranks among the core capabilities people need in the 21st century. As machines grow quicker and more intelligent, abilities that only humans possess — creativity being one — are going to matter more and more. Beyond that, creativity has turned into a team sport, since regardless of how skilled you are, the way creative work gets done these days leans toward repetition and working together. Anyone working as a creative professional must simultaneously balance multiple streams of work, while teams have never been so distributed or remote. That demands collaboration and workflows hosted in the cloud that run without friction and drive that productivity. Offerings such as Behance, along with our social communities and live tutorials, provide individuals with new avenues for acquiring skills and discovering inspiration. When it comes to Adobe, Creative Cloud is meant to function as one place where users can go from having an idea to earning money from it. Scott is going to address you later, but I want to expand on how our approach works. First off, we intend to advance within every creative field. We're already the leader in the main creative disciplines — photography, design, video, illustration, and layout. When it comes to newer, emerging fields, including screen design and immersive media such as 3D, VR, and AR, we're extending that lead. Thanks to this method, we've been able to attract new creatives through individual app products, and then gradually demonstrate how much the complete Creative Cloud package can offer them. Our focus is on multi-surface systems — solutions for each surface and system — since we want anyone to be able to create wherever and whenever inspiration hits. Our genuine belief is that these devices no longer serve only for consumption; each device ought to be a creation device too. We're putting effort into collaboration services, because that lets us guarantee content is managed seamlessly in the cloud and reachable from any device. On the business side, this lets us boost engagement, and also bring in new stakeholders and grow our customer base through these fresh monetization opportunities. We want to connect with and motivate the community, and our lively communities — which play a major role in bringing in new users and keeping them involved — are performing well. In fact, Behance now has more than 25 million members, which presents a huge chance to drive additional upsell within the broader Creative Cloud ecosystem. With initiatives like Adobe Live, we're able to provide spaces where creatives can gather, stay active, and keep learning. As we've said for a long time, keeping customers is the new growth, and that's more accurate than ever now that we've surpassed $10 billion in digital media annualized recurring revenue coming from subscribers we already have. At the end of the day, what we're really trying to do is make creativity something everyone can access — whether you're a student, someone making content on social media, a photographer doing it professionally, a filmmaker, or a designer, you should be able to bring your ideas to life. On that front, we've rolled out several new offerings, including Photoshop and Illustrator built for tablets, consumer-facing tools such as Photoshop Camera, and easy storytelling options like Premiere Rush and Spark — each one bringing in fresh users and expanding our overall base. Beyond all that heavy product work, we also run things using a data-driven approach to operations, which is what allows us to go after such a broad opportunity. The reason that works is that we know our customer incredibly well, so we're able to deliver tailored experiences and tailored offers at every stage of that digital funnel and journey. As a result, we're able to drive deeper engagement and open up additional chances to upsell. So when you bring all of that together — the products and services we're going after across these broad segments, with adjustments made for things such as non-genuine usage — the total addressable market for Creative Cloud is expected to come in at roughly $41 billion in 2023. Out of that addressable market, $20 billion originates from creative pros, and that figure covers Creative Cloud apps along with new services such as Adobe Stock. A further $21 billion of the addressable market opportunity stems from the wider communicator and consumer segments, and that includes offerings such as Spark and Premiere Rush, plus the non-pro users of Creative Cloud, plus Stock. Guiding everything we do for years ahead will be our goal of unlocking creative potential. For this segment, several main growth levers stand out to me: drawing in first-time users through single-category tools for screens, video, and 3D; increasingly using phones as an entry point by setting up mobile IDs; earning revenue from mobile services; moving customers up through multi-surface offerings and newer options like Adobe Stock; and continuing to acquire and grow worldwide. Turning to growth opportunity number two: there's no doubt that digital documents have become essential to running today's business.

We've witnessed this enormous speed-up as companies everywhere moved to working remotely practically overnight. What's really true is that AI and machine learning, along with the cloud and mobile, are redefining what productivity means; the way we work is being reshaped by them. Greater flexibility is being enabled, and more collaboration is being demanded among globally dispersed teams. This productivity is only being amplified by artificial intelligence. We're witnessing enormous uptake of processes and workflows moving from paper to digital, and all the paper-based tasks of yesterday are now being transitioned into digital form. There's something else happening too: a new business chance is emerging from cloud ecosystems, and we call it the API economy. It's changing how apps and services get built, and also how they make money. The reason this is happening comes down to the fact that PDF is still the common language of the internet. Reader or Acrobat has been put on over 2 billion phones, tablets, and computers. In fact, 300 billion PDFs were opened inside Document Cloud apps over the past year. Strategically, when we look at this opportunity, the first piece is expanding our Sensei-powered Acrobat verbs — enabling every kind of document action, whether that's editing, sharing, scanning, or signing. Our aim is to tap into the worth contained in the trillions of PDFs out there by figuring out these unstructured documents and turning them into something that truly works well on phones. In fact, a feature we're especially proud of, known as Liquid Mode inside Acrobat Reader, handles the job of interpreting and then automatically reflowing text, images, and tables so people can navigate and read quickly, and Adobe Sensei is what drives it. Since PDF usage has grown enormously on mobile devices, we see mobile as fueling this new commercial opening. By making the Acrobat experience smoother on both mobile and web, we're genuinely capitalizing on the everywhere-present PDF format we have, and we're growing our free as well as paid mobile user base. We're seeing more PDF demand come to us through Acrobat web, since we're turning all that huge search-driven interest in PDF tasks — creating and editing, for instance — into usage via our frictionless services. Since all companies are moving toward digital operations, the strategy's third pillar involves facilitating the shift from paper to digital. We do this through offerings such as Acrobat and Adobe Sign, while also drawing on capabilities delivered via the Adobe Experience Platform, the Adobe Experience Manager, and Adobe Experience Manager Forms. Our aim is to open up a completely fresh PDF ecosystem built on document services, which supply APIs to developers outside our company. Those developers will uncover innovative and compelling applications for PDF, and that in turn lets us generate revenue from such services. Allow me to elaborate on a handful of these possibilities. Roughly 50 million searches related to PDF actions occur each month. The goal here is to make it possible, with one click, to provide a top-tier web experience, give customers fast access to the actions they're looking for, and let them both obtain and uncover a wider array of Acrobat offerings. That mirrors the effective Reader upsell approach we've already pursued, where the idea is to build engagement around PDF so users can get their tasks finished, and then move them up from the no-cost product to Acrobat subscriptions. Another piece of our Document Cloud plan involves providing a single, unified Document Cloud platform, encompassing Acrobat, AEM Forms, and Adobe Sign, all of which sit at the heart of how work happens now. Our go-to-market edge is enormous, since the refinement of our data-driven operating model grants us an extraordinarily strong grasp of our customers — how to connect with them, how to support them well — and we can genuinely fine-tune every part of the funnel, from acquisition right through to retention. We keep extending Adobe Sign's scale and reach into rapidly expanding new verticals through major go-to-market alliances, among them Microsoft, Workday, ServiceNow, and Notarize. We'll keep putting investment behind the brand equity tied to PDF as the common tongue of the internet. The Document Cloud strategy — our second pillar for growth — along with the bigger market it unlocks, has us really energized; we expect that market to hit $21 billion come 2023. Moving to subscriptions is delivering returns, so is bringing in visitors, so is mobile, and just the PDF mobile piece by itself makes up about $11 billion of that total market. Over on the Document Services platform, growth is being driven by e-signatures and fresh embedded offerings, which we view as a $10 billion addressable chance. Customer experience management is the whole focus of our third growth push, and given how digital transformation is speeding up everywhere we look, we continue to view it as an enormous opportunity. The fact is that these days every company is a digital company, and the need for digital customer engagement has never been stronger. Each business must grasp who its customers are and provide personalized experiences. As consumers, all of us purchase experiences, not merely products. What's true now is that customers anticipate this involved, personalized digital experience, and we want those interactions to come across as simple and smooth. They must be well-crafted, they must be aware of context, and they must flow without friction across every channel and be protected, arriving at the precise instant we anticipate it. Supplying a next-generation platform that provides and powers this experience is simpler to describe than to achieve, because it demands that businesses fully blend content, data, and artificial intelligence to serve up this engaging, pertinent, personalized experience instantly. The honest truth is that firms need to design for this brilliance while wiring for intelligence. Adobe pioneered the digital marketing category, and today we lead a far wider opportunity — the customer experience management category. What we aim to do is provide a full array of applications and services, organized into solution areas like content and commerce, customer journey management, customer data and insights, and — following the completion of the Workfront deal — work management. Anil Chakravarthy is going to take a bit more time to discuss our strategy. The second piece involves bringing out this next-generation technology platform, Adobe Experience Platform, which supplies the foundational infrastructure that turns CXM into something real and stands years ahead of whatever any rival has offered; it genuinely unites hundreds of data points, producing that single customer profile which businesses can activate to provide personalized experience at scale. Another part of our vision is providing an industry-leading marketing system of record. Now that the Workfront acquisition has closed, we hold the top work management offering for marketers. Although, in contrast to most companies, the bulk of our growth comes organically, we do pursue inorganic opportunities in a strategic way, and our record of buying, growing, and scaling such companies has been remarkably successful. Within our ecosystem, we have a long-established group of partners alongside Workfront, with more than 1,000 joint customers. Workfront already comes with APIs covering not only Experience Cloud but Creative Cloud as well, which opens up chances to further capitalize on and produce synergies throughout our businesses.

A major strength we possess is our capacity to execute a go-to-market at scale, reaching across the whole C-suite, thanks to the strong connection that customer CIOs and CMOs alike feel toward Adobe. Every business today is re-architecting its systems with the customer at the center, and that demands a powerful partnership between the chief marketing officer and the chief information officer. This lets us extend our go-to-market across the whole C-suite, which is producing larger-value contracts plus services; we keep an explosive partner ecosystem that shares our vision and brings distinctive expertise to our shared customers. For the Adobe Experience Cloud, our total addressable market is projected at roughly $85 billion in 2023. That breaks down into customer data and insights, which remains an enormous opportunity since intelligence is more and more the lifeblood of every organization. That accounts for an addressable opportunity of about $26 billion. The surge in content and commerce, a space where we are the undisputed leader, is fueling a $44 billion opportunity. Customer journey management, spanning products such as Campaign and email marketing, plus B2B marketing and demand generation, covering account-based marketing and lead management, should represent a $15 billion opportunity. As we've noted previously, these categories are big and expanding and sit at the top of mind for every business. In summary, we feel we hold the right strategy aimed at an outstanding opportunity worth roughly $147 billion in 2023. We have demonstrated the ability to both establish and repeatedly lead these categories; we're thinking bigger about our businesses and the customers we serve, from consumers and students to communicators and creative professionals and the whole C-suite; we have top products, services, and platforms to unleash creativity, speed up document productivity, and power digital businesses. Our secret sauce is the more than 20,000 talented employees we have, all united behind our mission and the impact they can make. We have a revered brand worldwide. We have world-class financial discipline driving growth on both the top and bottom lines with an impressive margin. This is genuinely a vast opportunity and we're well-positioned to seize it. I firmly believe Adobe's best days lie ahead of us. We expect to surpass $15 billion in revenue next year. We have a massive addressable market, industry-leading applications, services, and platform, and an unmatched innovation engine. Let me briefly address some growth drivers that we believe will keep fueling this momentum; on the Creative Cloud, beyond our leading applications in every category, mobile as a funnel and as a product monetization opportunity is enormous. Services like Stock are becoming significant contributors to ARR growth. Fresh areas such as video, web services, plus 3D and AI; over in Document Cloud, ongoing uptake of PDF services delivered through browsers and handsets, together with Acrobat subscriptions, plus the capacity to bring Adobe Sign to market targeting SMBs and bigger enterprises alike via seat growth and through document workflows; within Experience Cloud, keep rolling out this next-gen technology platform, provide Sensei intelligence services, the means to tap a partner ecosystem, and to cross-sell and upsell across mid-market and commercial, while also fueling new logo expansion and making certain we keep delivering value, propel customer success, and sustain retention. So at this point I want Abhay Parasnis, our CTO and also the person who lately assumed the role of Chief Product Officer for Document Cloud, to discuss our technology vision. Abhay?

Appreciate that, Shantanu. Hello, everyone, and good morning. It's wonderful to reconnect with all of you. Shantanu covered the bigger opportunity and the strategic imperatives for Adobe. Over the next few minutes, I'd like to discuss our technology vision and express how excited I am about what lies ahead. Since we are fundamentally a product company, we've consistently adopted a long-term perspective when it comes to creating deep technology platforms that are strongly defensible and fuel industry breakthroughs. Given all that has happened this year, I'm particularly proud of just how broad and deep the innovations are that our teams have shipped. Illustrator on iPad and Neural Filters in Photoshop, Liquid Mode and Acrobat web in Document Cloud, AEM Cloud and Real-Time CDP in Experience Cloud represent merely a handful of the innovations we've delivered; the only thing surpassing this amazing pace of innovation is the enormous scale at which we now operate; from trillions of activations served out of Experience Cloud to hundreds of millions of mobile app downloads and over 2 billion devices running Reader and Acrobat software as of today, we genuinely possess unmatched scale spanning cloud to the edge. One essential element of our technology strategy involves establishing a consistent architectural viewpoint spanning all of our products. We conceptualize this unified architecture across three levels. Multi-surface experiences for our apps, a rich portfolio of services and APIs, and our Sensei AI stack built on shared content and data platforms. Everything we do across our three clouds is steered by this unified technology vision and provides us a significant strategic advantage. More and more, we are looking past discrete app silos toward delivering new modalities and fluid multi-surface experiences spanning desktop, mobile, and web; for instance, within Creative Cloud, we are incorporating modern web and collaboration technologies into core imaging and video workflows in applications such as Photoshop and Premiere, transforming them into complete creative systems. Likewise, within Document Cloud, we are taking the best-in-class PDF runtimes on PCs and extending them to both web and mobile platforms for a consistent multi-surface PDF experience. Within Experience Cloud, we are singularly focused on a new kind of customer experience, one that is real-time and hyper-personalized across each and every touch point. At the services tier, we are not merely building an increasingly rich portfolio of services, but we are centered on three cross-cutting themes. First, we are embedding collaboration deeply at the core of all our applications, converting our best-in-class single-user apps like Photoshop or Acrobat into multi-user collaborative solutions. Since we uniquely understand our file types and workflows, we can deliver far richer contextual collaboration for users rather than what a generic file-sharing or communication platform offers. Second, leveraging the shared content and data platforms, we are enabling unique cross-cloud use cases, moving from creators to knowledge workers to marketers. This is something that only Adobe can deliver. Finally, we are increasingly concentrated on the API economy opportunity by exposing our services through open APIs to developers and ISVs in the ecosystem. You're going to see us putting intense focus on this fresh vector. And finally, I've shared with all of you before about Adobe Sensei, which is our generational wager on AI. Sensei is already making a deep impact, since our teams have shipped hundreds of features powered by Sensei spanning our three clouds; we began Sensei with AI capabilities delivered inside existing apps. By drawing on our distinctive grasp of how users work and their usage patterns, we've constructed a dedicated Sensei platform, one centered on creativity, documents, and customer experience domains. Now that this platform exists, we're in a position to stretch the boundaries with entirely new sorts of AI-first apps. Liquid Mode in Document Cloud stands out as a strong illustration of this. It was a journey spanning multiple years and demanded that we crack some distinctive and difficult challenges. Employing the newest methods in AI, machine learning, and computer vision, we taught Sensei to comprehend deeply the trillions of PDFs found around the globe. With that intelligence, we can produce structure from unstructured PDFs located across the world. At first, we're applying this to build a delightful experience on mobile devices, yet what lies ahead is genuinely thrilling, with breakthroughs in document intelligence in fields such as semantic understanding or document summarization. Just like Liquid Mode in Doc Cloud, we're likewise developing distinctive Sensei services for creative intelligence and experience intelligence. Sensei ranks as a top R&D priority carrying long-term strategic advantage. It's what allows us to create genuinely differentiated capabilities and delight customers with Adobe magic powered by Sensei. Because our customers depend on Adobe for increasingly mission-critical needs, we stay laser-focused on engineering excellence and nailing the fundamentals each and every day. We're among the earliest SaaS companies to have constructed a multi-cloud foundation that lets us deliver across varied public, private, and hybrid cloud environments, and to do so with strong operational excellence together with cost efficacy. Additionally, through Adobe's common controls framework, we can satisfy enterprise expectations around security, compliance, and privacy requirements, plus the global regulatory landscape. Finally, we keep playing a thought leadership role within the industry through various standards and other efforts, such as our Content Authenticity Initiative and Open Data Initiative. To wrap up, the opportunity in front of Adobe is genuinely thrilling, from the future of creativity to reimagining documents, to the chance to completely rewire the customer experience. We possess a world-class engineering team with a deep culture of innovation and investments in foundational technology platforms that let us deliver with speed and scale. I've never felt more confident about Adobe's technology agenda, and I'm extremely excited about our capacity to go invent the future; now, let me pass things to Scott Belsky, Chief Product Officer for Creative Cloud, to discuss Creative Cloud strategy. Over to you, Scott.

Appreciate that, Abhay. I've gone into further depth on our Creative Cloud plan in the deck, but I'd love to give you a fast overview at this moment. Stepping back, the growth and momentum we're witnessing in Creative Cloud is enormous, since creativity matters more today than it ever has. We witnessed that at the latest MAX conference, now the top creativity gathering globally. MAX shattered every prior record, drawing more than 21 million views across the world. So why does creativity carry such importance today? To begin with, everybody wants to be noticed at work, at school, on social, and even in family projects, and creative expression is the way they achieve that. Within large organizations, there's a growing recognition that inventiveness is a source of competitive edge. Whether it's through slide decks, how they present information visually, or by taking a more hands-on role in the products and campaigns they're part of, staff members are looking to stand out; as AI absorbs an ever-larger share of productivity-centered jobs, creative ability will be the thing that lets people flourish at work—and honestly, hold onto their positions. Each of these developments makes imagination matter more, creating an enormous opening for Creative Cloud, as well as an obligation for us to keep improving our offerings so they meet the needs of a new generation of creators. Let's go through the five pillars that make up our Creative Cloud strategy. To start, we're pushing innovation so that every type of creative work advances. The professionals we serve are looking to expand what's possible in their disciplines and accomplish more while spending less time. A key part of how we make that happen is Adobe Sensei — the AI engine Abhay mentioned. Take Photoshop: we just introduced Neural Filters, a fresh platform built on Sensei that lets users make dramatic adjustments simply by dragging a slider. There's something genuinely astonishing about these Neural Filters. With them, you can transform nighttime into daytime and even change a frown into a smile. Neural Filters represent only a single illustration of the breakthroughs we've achieved thanks to Sensei. Over at MAX, we rolled out a bunch of new Sensei capabilities spanning all of our creative categories, and through offerings like Substance, Dimension, and Aero, we're enabling customers to experiment with fresh formats, including 3D and immersive. Because of the pandemic, lots of teams have shifted toward 3D solutions, since those tools let you generate an image or video instead of organizing an on-site shoot. A standout case is Ben & Jerry's, which used our 3D and immersive offerings to pull off an important campaign centered on ice cream delivery throughout the pandemic. Their experience mirrors what numerous businesses are discovering: 3D-rendered visuals can't be told apart from conventional photographs, and producing them is much more efficient and, in fact, cheaper. We anticipate that enthusiasm in this area will keep growing, particularly when emerging formats such as augmented reality become widely adopted. Through these new features, we're providing genuine benefits to individuals employed in creative professions, and it ensures Creative Cloud remains the clear choice for present-day teams grappling with content velocity — our term for the unending need for more formats, more platforms, and just plain more content, with personalization increasing daily; we're committed to pushing their creativity toward new horizons. Another crucial pillar of our Creative Cloud strategy is to keep transforming our market-leading products into cloud-centric platforms that function seamlessly across numerous devices. Desktop machines are no longer the only place creativity happens, and we've achieved quite a bit in bringing our flagship offerings to additional surfaces. During the past 12 months, we've introduced Photoshop and Illustrator on the iPad. We released Adobe Fresco, the industry's most capable drawing and painting application, for Windows and Apple tablets in the prior year, then made it available on phones during this one. According to what customers tell us, the portability that iPad apps provide delivers enormous benefits. Take designers working for Sanrio's Japanese theme parks: they rely on Illustrator for the iPad to draft new attractions while physically present inside the park. This genuinely allows them to judge how a design will look in real life, in its actual location. Here's what this shift from product to service, and from multi-system platform expansion, has taught us. We've found that customers who rely on our offerings across several devices report greater satisfaction and stick with us longer. We've also found that providing a more contemporary interface on mobile devices appeals to new customers and serves as an effective route for drawing new customers into Creative Cloud via the mobile app stores. We're continuing to expand where our apps can be used, including on the web, and that's going to attract a much broader set of users while unlocking fresh potential for Creative Cloud. Building strong services that enable teamwork, and weaving them in smoothly, is another key part of what we're doing. There's no doubt that we've entered a new era of creativity, one defined by deep collaboration. The younger customers coming up now grew up using Google Docs; they take it for granted that everything should involve working together right from the beginning, and the money we've put into Creative Cloud services over the past few years has turned that into reality; we launched Creative Cloud Libraries, which allows groups to swap creative building blocks like fonts, colors, vectors, and images. We rolled out Cloud Documents, and it lets customers easily pass their work along to collaborators and stakeholders. When we weave offerings like Stock and Fonts directly into the spots within our products where people need them, teams are guaranteed to have every piece of content they need to kick off a project, all without ever leaving Creative Cloud. Finally, we've made reviewing and leaving comments directly within our desktop products dramatically easier for stakeholders. Each of these collaborative features cements Creative Cloud's role as the definitive hub for creative assets, and that locks in more lifetime value. Such services additionally open up new business possibilities and widen our footprint by drawing in stakeholders outside the usual creative team, whether that's for review purposes, copywriting, or making use of templates for social media marketing. Engagement and community inspiration remain another key priority for us. A wide variety of new customers are joining Creative Cloud right now. Retaining those users means making sure they stay involved, pick up fresh abilities, and keep finding motivation to experiment with different tools and methods. Our approach to boosting engagement involves rethinking the journey a new user takes, delivering an experience tailored more closely to each individual and enriched with content from the community and educational sources, and we have grown extremely data-focused while refining those flows; we now offer far more avenues for acquiring new skills. Visits to Adobe Live — our extensive lineup of broadcasts from Behance members demonstrating our products alongside tutorials — have risen twofold during this year. We've responded by doubling what we publish. Involvement with those broadcasts is genuinely impressive. Across the past year, viewers watch for an average exceeding 1 hour and 20 minutes. We've additionally made live broadcasting available inside our iPad apps, letting any customer simply start streaming straight from the product and post the URL to social networks. Someone else can tap that link, pick things up by watching an experienced creator work, and grab the app to test it out too. Learning opportunities get tailored inside our products. The more tailoring we do, the more precisely we connect with every customer at their own level.

Since nothing motivates us more than witnessing the work of fellow creators, we're investing further in bringing together a worldwide creative community. Inside products such as Lightroom, we've introduced a fresh suite of community-oriented capabilities, while Behance—our international creative network that means so much to me personally—now counts 25 million members, and more than 1 million individuals stop by the site daily. Such initiatives widen the entry point of our funnel and simultaneously increase the odds that these newly acquired users will thrive, feel inspired, and stay involved. Last, let's discuss making creativity accessible to everyone, a topic Shantanu raised at the outset. Through a fresh wave of web and mobile offerings that are freemium, simple to operate, and built on Adobe's foundational technology, we aim to enable people everywhere to create. Whenever somebody goes online searching for a way to retouch a picture or design a flyer, we'll offer straightforward web applications that assist with finishing that project and motivate them toward bigger things, pushing them to advance further. Across mobile, Photoshop Express, Premiere Rush, and Adobe Spark give ordinary users the power to produce content that gets noticed on social platforms. Over the coming year, we're uniting these offerings more tightly so users can move between them and bring their projects onto the web. This is something only Adobe is capable of doing. Into these mobile and web applications, we're delivering strong time-saving capabilities, a number of them driven by Sensei. Additionally, we're putting priority on interoperability with the remainder of Creative Cloud, allowing more casual makers to collaborate alongside creative professionals and to elevate their projects inside something like Photoshop or Illustrator once they feel prepared. I look forward to revealing additional details about these product investments over the next year. In summary, our estimate of the market we serve is broadening to $41 billion in TAM in 2023, since creativity's significance is accelerating rapidly and the global population of creators is surging. What we do across the next few years will guarantee that Creative Cloud remains at the forefront of creativity in emerging mediums, that it fuels the expansion of collaborative creativity, and that it embraces new generations of creators through a new generation of tools alongside the learning, inspiration, and community needed to keep them engaged and successful. Thank you. I'll now hand things over to my colleague, Anil, who leads the Digital Experience Business, for a discussion of Experience Cloud. Anil.

I also oversee our global field operations. I'd like to provide some background and detail regarding the Experience Cloud approach that Shantanu laid out. You ought to have the complete deck we've supplied; during the first six months of 2020, once COVID struck, we observed companies concentrating on keeping employees safe and healthy while maintaining continuity of operations. We adjusted course and collaborated with our clients to handle the unfamiliar circumstances. During the latter six months, we noticed organizations intensifying their emphasis on managing customer experience as a reaction to rising customer expectations. Today's customers prioritize digital channels, and they anticipate compelling, tailored interactions from every company, which has intensified the strain on organizations to speed up their digital engagement efforts. It has additionally highlighted just how challenging it is for organizations to provide an excellent experience to their clientele throughout every point of contact. Given today's conditions, achieving that has been quite an accomplishment. Organizations must consider outside influences such as privacy rules and data sovereignty, while also overcoming internal difficulties including scattered customer information and labor-intensive, ineffective workflows. It has become evident that organizations require a next-generation technology platform for Customer Experience Management, and this has generated an enormous $85 billion market opportunity for CXM, with Adobe distinctly positioned to seize it. Our purpose matters more now than it ever has, and our approach of empowering digital enterprises is connecting with companies spanning various sectors and globally. We witnessed that abundantly during 2020. Among our top 100 clients, 93% utilize three or more Experience Cloud solutions, and our typical ARR with those clients has risen to $8 million, which is almost triple the figure from 2015. Allow me to spotlight a single one of those clients—a leading customer—Verizon. Throughout the past five years, Verizon has made Adobe its standard for CXM spanning its consumer, business, and media divisions. The Adobe Experience Platform delivers real-time replies within 250 milliseconds at cloud scale spanning billions of profiles. Verizon utilizes AEP to provide tailored messaging, refine customer journeys, boost conversions, and foster customer loyalty. Consequently, our ARR from Verizon has increased 700% across the past five years. This serves as an excellent illustration of the growth patterns we observe throughout our client base. Now shifting to our approach for Experience Cloud. It draws upon Adobe's own prosperous transformation path. We've derived the concepts and learnings from our data-driven operating model and built a customizable playbook that any client can adopt to empower their digital enterprise through next-generation customer experience management. As Shantanu described, our approach contains five pillars. It's an all-encompassing collection of applications and services covering customer data and insights, content and commerce, plus customer journey management. These applications and services run on a unified Adobe Experience Platform. AEP is a next-gen platform for delivering real-time personalization at scale, handling almost 17 trillion segment evaluations each day, utilizing first-party data, cloud scale, driven by Adobe Sensei, and broadened through an open ecosystem of partners and developers. Our customers get the best of both worlds because we put in the hard work: full-featured applications and services, all brought together on one cloud-scale platform. Having spent many years in the data field, one thing is obvious to me — when it comes to capabilities and production deployments, AEP stands years ahead of everyone we compete with. Workfront, which we recently acquired, has us very enthusiastic, and the response from both customers and partners has been excellent. What we're building is a solid base for a marketing system of record, one that will let our customers execute campaigns with more efficiency and agility, and refine those campaigns using insights delivered in real time. Turning to the fourth element of our strategy: ever since we established the digital marketing category, CMOs have counted on us as a trusted partner, and these days CIOs count on us in the same way. Then, during mid-2020, we brought our worldwide field operations together with digital experience under one organization, which I now lead, and thanks to that we've been able to scale our go-to-market so it serves enterprise needs ranging from mid-market customers all the way to the biggest brands on earth. Last, we collaborate very closely with a global ecosystem made up of more than 2,800 SIs plus technology partners in order to generate business value and keep growth going. To wrap up, I couldn't be more enthusiastic about what lies ahead. Experience Cloud is a growth business, and by merging our go-to-market and product organization, we're well-positioned to fire on all cylinders. Consider our products, our platform, the innovation that Adobe Sensei powers, our customer relationships, our brand, and the investments we're making — Adobe is plainly the leader in customer experience management, and no one is better placed to help businesses bring personalized, engaging digital experiences to every one of their customers. Thank you. At this point, let me introduce our Chief People Officer, Gloria Chen.

Thank you, Anil. Hi, everybody. Twelve months back, in my role as Chief Strategy Officer, I discussed with all of you Adobe's growth trajectory, the size of our addressable market, and the huge possibilities throughout our operations. As has been shared with you today, our approach is broader in scope than it has ever been, and I have faith in our capacity to deliver, given our demonstrated history of reinvention, which I have personally witnessed on several occasions during more than 20 years with this organization. In my view, what sets us apart has been bringing together a successful plan, talented individuals, and an outstanding culture driven by purpose. My transition from corporate strategy to employee strategy at the start of this year was a logical step. Our workforce represents our most valuable resource. In my new capacity as Chief People Officer, I am thrilled to champion our principles, our legacy of forward-thinking, people-first perks and initiatives, and our dedication to helping the more than 22,000 staff members worldwide grow and develop, which now includes Workfront, whose team came aboard earlier this week. More and more, organizations are seen by their workers, buyers, and other parties as an extension of who they are, what they stand for, and the groups they belong to. During 2020, our fundamental principles were fully evident: being genuine, exceptional, innovative, and involved. When we addressed COVID, we prioritized the well-being and security of our workforce. We ramped up our messaging, introduced remote work perks, and promoted flexible scheduling; we looked after our communities, giving customers room to adjust and providing no-cost Creative Cloud licenses to students. Our staff truly rose to the occasion this year, with 70% participating in online volunteering. Our team members have answered with thankfulness and satisfaction regarding how we've handled things, and they are more involved and efficient than at any previous point. As an organization that puts people at the center, we have consistently aimed to cultivate an atmosphere of belonging, which we refer to as Adobe for All. We hold the belief that when workers are able to show up as their true selves, they produce their finest results. When our teams include a range of backgrounds, we become more inventive and better mirror the people we serve; so that staff members feel cared for both on and off the job, we put resources into training and growth opportunities, community groups, and benefits that support families. We lead the way on equal pay regardless of gender or ethnicity, and we are looking into equity of opportunity to ensure fairness in advancement and lateral moves. We are creating a pipeline of talent for today and tomorrow, putting money into young creatives in underrepresented areas, collaborations with universities, and reskilling for those mid-career plus apprenticeship programs. The occurrences of this year made it evident that although we have moved forward, there remains additional work to be done. As an organization, we prioritize deeds over mere statements. Alongside our Black employee network, we have introduced the Taking Action Initiative, which centers on community, advocacy, and growth. Throughout our worldwide Adobe for All week, we set out ambitious targets for boosting representation. Through our hiring and development efforts, our initiatives honoring women and Black creators, and our work to guarantee that our offerings are inclusive, we are generating change that reflects our fundamental principles. One more subject that has been on everyone's mind is what work will look like once the pandemic ends. Let's touch on that quickly. Over the course of this year, we discovered just how much can be accomplished successfully even when everyone is operating from home. New offerings have been brought to market, customer events held across the globe, and hundreds of interns plus employees worldwide have been brought on board. The digital shift is upon us, and as an organization we'll keep rethinking what customers and staff experience. That said, our view remains that face-to-face interactions matter greatly for building culture and trust, for learning and growth, and for innovation. Every team has to find the balance that suits it, yet broadly speaking, most staff will receive the option to work from home some of the time, and we're making that the norm rather than something unusual. Regarding those who work remotely full-time, that's already something we have now, particularly among sales and consulting personnel. Widening remote work on a large scale is a major call — it isn't merely about what individuals prefer, since it also affects collaboration, cohesion, and culture. There's more for us to learn in this area. Our first step will be revising the criteria for remote work over the next few months, then refining carefully, just as we've always done. This is plainly a journey — one we anticipate will keep changing. Looking back over the year, it's been an honor for me to serve Adobe in this new role. The record results our staff delivered came through their commitment, their fellowship, and their grit. 2020 has revealed how Adobe's values work in practice, and I have no doubt that Adobe's finest days still lie before us. At this point, I'd like to hand things over to John Murphy, our CFO.

Thank you, Gloria. From everything presented this morning, it's obvious Adobe has enormous opportunities ahead; at this point I want to walk you through how our business is performing and the way we'll fuel expansion moving forward. Both the fourth quarter and fiscal year 2020 results will be addressed in what I share today. Prior to getting into the figures, during Q4 we altered our segment reporting so it matches how we run our Digital Experience business, reflecting the Advertising Cloud transition made earlier in the year. A new segment, Publishing and Advertising, was established by merging Advertising Cloud with the publishing segment that already existed. Because of this adjustment, our Digital Experience subscription book of business is now perfectly aligned with the components comprising our Digital Experience subscription revenue; having that alignment is excellent, since that's precisely where we're strategically pushing segment growth. The numbers we'll present for Q4 and FY 2020 reflect this reporting change. To preserve comparability, we've restated our financial information covering FY 2018 through today. Now let's look at how we performed in Q4. Adobe posted record revenue totaling $3.42 billion, reflecting 14% growth versus the prior year. GAAP diluted earnings per share for Q4 came in at $4.64. Non-GAAP diluted earnings per share reached $2.81. Q4 business and financial highlights include digital media revenue of $2.5 billion, marking 20% growth compared with a year earlier. Net new digital media ARR hit a record $548 million. Digital Experience revenue was $819 million, up 10% year-over-year. Digital Experience subscription revenue rose 14% from a year ago. Cash flow from operations set a record at $1.78 billion. We finished with remaining performance obligation, or RPO, of $11.34 billion. During the quarter, 1.6 million shares of our stock were repurchased. All in all, Q4 delivered a genuinely impressive performance. Now let me cover a few Q4 financial highlights along with growth drivers across each of our strategic businesses. Adobe generated $2.08 billion in Creative revenue during Q4, which amounts to 20% growth year-over-year, and contributed $425 million in net new Creative ARR; we closed the year holding $8.72 billion in Creative ARR, also reflecting 20% growth versus the prior year. Creative ARR growth was driven by acquiring new users across every geography and segment, single app and CC complete subscriptions, plus robust results in imaging, video, and stock categories. Adobe Document Cloud brought in $411 million of Q4 revenue, expanding 21% year-over-year. A record $123 million in Document Cloud ARR was added this quarter, and Document Cloud ARR at year's end stood at $1.46 billion, up 35% year-over-year. Drivers behind Document Cloud ARR growth include robust appetite for Acrobat subscriptions, demand arriving via the Reader funnel and on mobile, and considerable momentum in Sign. During Q4, we additionally gained from perpetual revenue in our Document Cloud offering that exceeded expectations. Digital Experience delivered segment revenue of $819 million in Q4, a 10% increase year-over-year, alongside subscription revenue of $696 million, which grew 14% year-over-year. During Q4, Experience Cloud's expansion was fueled by quicker uptake of Adobe Experience Platform along with app services, momentum in content and commerce—especially through our AEM Cloud Service—plus ongoing improvement in the mid-market, and we also had success closing agreements worth more than $1 million in annual deal value. Across the entire 2020 fiscal year, Adobe hit record revenue of $12.87 billion, reflecting 15% growth compared with the prior year. GAAP EPS came in at $10.83 for the year, while non-GAAP EPS was $10.10. Fueling our solid performance in FY 2020 was Digital Media segment revenue of $9.23 billion, up 20% year over year. Creative revenue reached $7.74 billion, up 19% year over year. Adobe Document Cloud revenue totaled $1.5 billion, up 22% year over year. We closed the year with $10.18 billion in Digital Media ARR, an annual gain of $1.85 billion. Digital Experience segment revenue was $3.13 billion after the segment reporting change, up 12% year over year. Digital Experience subscription revenue came to $2.66 billion, up 17% year over year. Operating cash flows generated during the year reached $5.73 billion; we increased RPO by $1.52 billion and gave back $3 billion in cash to stockholders via our stock repurchase program. Now let me share additional details about our strategic cloud businesses; we'll start with Digital Media, beginning with Creative Cloud. We pointed to several areas where we generated enormous momentum in the Creative business. We keep bringing in new customers, with roughly 75% of subscribers in fiscal 2020 being new to our Creative Cloud franchise. More than 45 million students can access Adobe Spark, almost twice as many as last year, demonstrating how we're building creative abilities for the next generation. Mobile remains a key funnel for us, with over 300 million mobile IDs created cumulatively and more than 80% year-over-year growth in mobile units, since mobile monetization has turned into a significant driver of ARR growth. Premiere Pro, growth in the Adobe Stock service, and new media types serve as a crucial customer acquisition vehicle for us. Shifting to revenue and ARR, we delivered another record year for Creative Cloud. The Creative Cloud view reveals a remarkably healthy business at scale, with steady revenue growth across the past several years. We keep seeing substantial user acquisition among creative professionals, communicators, and consumers, and revenue growth from services like Adobe Stock remains robust. Key creative growth drivers as we exited fiscal 2020 include new user growth driven by organic traffic, which is still elevated, along with targeted campaigns and promotions. Demand for single apps, particularly our video and photography offerings, strong retention and engagement, which stayed at pre-COVID levels as we exited the year, expansion into emerging markets, the gradual recovery in the SMB segment fueling demand for our team offering, including via the reseller channel, and ETLAs with educational institutions; this slide is fantastic because it displays a mix of our creative revenue in FY 2017 and FY 2020. Currently, more than 97% of our Creative revenue comes from subscriptions. At the same time, the business has expanded by 85%. A big part of what we've achieved stems from knowing our customers really well, and that keeps our retention levels high. As Scott and Abhay mentioned, this expansion is also fueled by our huge innovation engine spanning products and services as we move into additional markets. If you examine how ARR breaks down, most of the revenue still originates from all app subscriptions spanning individual, team, and enterprise. Meanwhile, an increasing share arrives via single app subscriptions, which aligns with our approach of widening our market opportunity as we bring in new users within the consumer and communicator categories. Given the most comprehensive array of creative offerings covering every design category and service, we're leveraging single apps and mobile as a demonstrated entry point for new subscribers, even as we keep growing our all-apps business throughout every segment and as an upsell chance for single app and mobile users. Creative Cloud's strength comes from our diversified and resilient business, featuring offerings suited to everyone from individuals to small businesses, education, and enterprises.

We've got a solid grasp of the ways customers prefer to interact with us as well, and what you're seeing here is a modest shift in mix toward individual offerings bought via adobe.com, even as our team and ETLA offerings keep expanding. Now let's turn to Document Cloud; this segment is performing extremely well and played a big part in the company's achievements this year, since subscriptions now make up more than 70% of our channel units, and more than 75% of subscribers during fiscal 2020 were people who are new to the Acrobat franchise. Just like with the creative business, our approach on mobile is fueling Adobe ID creation at the top of the funnel. Although monetization on mobile helps drive ARR growth, our emphasis on bringing in new customers, combined with our move away from a perpetual base toward subscriptions, is paying off. The Document Cloud approach of speeding up document productivity, shifting from paper to digital, is truly striking a chord in the remote work setting. The Adobe Sign business experienced an inflection in growth this year. In fact, we observed that inflection point prior to the pandemic arriving, and we anticipate this trend will persist into FY 2021. As Gloria mentioned, we picture businesses where people work in flexible ways. Nothing will revert to how it used to be. To use Shantanu's wording, "The genie will not go back in the bottle." There's simply an explosive chance for new user growth as we keep capitalizing on work from home or flexible work. We've got numerous growth initiatives, such as web-based PDF, Sign as a service, and the API economy, which give this business additional legs. Moving to revenue and ARR, Document Cloud is yet another Adobe business that has surged beyond the $1 billion mark, nearing $1.5 billion in both revenue and ARR. There's simply an enormous opportunity ahead of us. The main Document Cloud growth drivers as we exit fiscal 2020 include new user acquisition of Acrobat subscriptions throughout all customer segments, monetization of our Reader install base on mobile, demand for our subscription offerings across all geos, and enterprise adoption, including strength in Adobe Sign. Remember that we also provide Acrobat and PDF services via CC Individual and all app subscriptions, which is yet another driver of growth for this business. Here you can see the phenomenal growth we've driven on subscriptions. Even though non-recurring perpetual revenue makes up a smaller share of our revenue, it aligns with our strategy. This represents an ongoing chance to transition that install base over to subscriptions. You can see the overall business has almost doubled over the past three years as we've moved more of the business to recurring revenue sources. Unlike Creative Cloud, for Document Cloud, we still offer perpetual as a way to bring people into the franchise. We enjoy flexibility in our offering, given the breadth of our customer base, which has shifted mainly to subscription. If you take digital media in its entirety, counting ARR from both Creative and Document Cloud, what you get is a picture any CFO would be delighted with; it demonstrates how recurring subscription revenue stacks up, climbing steadily upward, and we closed out the year with annualized recurring revenue above $10 billion. Consider the revenue base back when Creative Cloud debuted under a decade ago — it's remarkable how much we've widened the market opportunity while moving virtually every dollar of revenue from perpetual to recurring. That illustrates just how strong and how lasting our subscription model is. Figures of this kind can't be achieved absent an exceptionally advanced system. Our data-driven operating model is built specifically to bring in additional customers across geographies and to engage them and push retention higher. DDOM, our shorthand for it, serves as our instrument for discovering and comprehending personalized offers for our customers. What's best about DDOM is that we rely on our very own software, Adobe Experience Platform, to power it. That leads me to the digital experience segment. Let's examine Adobe's Digital Experience business more closely. To begin, we were thrilled to complete the Workfront acquisition earlier this week, and we extend a welcome to the Workfront team at Adobe. Regarding M&A at Adobe, we evaluate both the technology and the people. Adobe possesses an excellent record and history of buying companies, generating synergies, and speeding up growth. With Workfront, our attention is on our capacity to speed up growth via the marketing use case. As Anil mentioned, what's especially thrilling for us is the chance to build an industry-leading marketing system of record. We're sure our shareholders and customers will receive maximum value, and here lies a tremendous opportunity to speed up subscription revenue growth in the years ahead. Workfront constitutes a substantial addressable market for digital experience. The targets we're giving for FY 2021 and Q1 include Workfront. We look forward to getting off to a fast start, integrating the business within our Digital Experience segment, and broadening our opportunity with Customer Experience Management. Digital Experience is a category we established slightly more than a decade ago, spanning from content creation right through to marketing execution, measurement, optimization, and modernization. This year, segment revenue reached $3.13 billion. Even more significantly, we've witnessed digital transformation and Customer Experience Management striking a chord with our enterprise customers. Now more than ever, for enterprises to thrive and deliver the kind of personalized real-time experiences their customers anticipate, they need technology partners capable of helping them transform their businesses the way we've reinvented our own Digital Media business through our data-driven operating model and emphasis on Customer Experience Management. From my discussions with my peers throughout the C-suite, it's evident that regardless of their industry, they appreciate the worth of the digital transformation investment. Looking at the composition of our top 100 customer accounts, the momentum is evident: in 2020, roughly 93% of them were utilizing at least three of our solutions, and average ARR has increased by over twofold across the past 5 years. We've discussed extensively our emphasis on expanding subscription SaaS revenue within this operation. Here you can observe how prioritizing subscription revenue has fueled segment expansion across a multi-year span. Growth in our Digital Experience segment has come through subscription offerings, with notable momentum in enterprise uptake of content and commerce products, among them AEM Cloud Service. Considerable traction is being gained by our Adobe Experience Platform, with multiple referenceable customers like Verizon generating momentum. Additionally, we're witnessing ongoing recovery in the mid-market after the macroeconomic difficulties experienced there during the early part of the pandemic. Examining the business by revenue type, from 2018 onward, we've kept services and other categories fairly level, just as we committed, while concentrating on expanding recurring subscription SaaS revenue, which has achieved a 29% CAGR from 2018; to achieve this, we've maintained our approach of utilizing the partner ecosystem that Anil mentioned previously, depending on those partners to deploy our solutions and deliver services that assist our enterprise customers in realizing the value we provide.

Now let's look at how revenue breaks down across our three strategic growth pillars: customer journey management, content and commerce, and data and insights. Each of these is a market-leading solution, and all are essential to customer experience management, which we built on a shared data and content platform. What fuels growth in these businesses is customer demand for help keeping up a digital presence and completing transactions online, for delivering personalized experiences to their own customers, and for unifying and activating their data. There's an $85 billion market opportunity out there, and we're putting money to work so we can grow over the long haul in these categories. When it comes to tackling these enterprise challenges, the breadth of our platform's solutions and innovations means we're years ahead of rivals. Now I'd like to spend a bit more time on the income statement, cash flow, and how we allocate capital. This next slide shows something most CFOs would be delighted to see: growth in revenue alongside expanding margins, on both a GAAP and non-GAAP basis, and for the year, non-GAAP operating margin came in well above 40%. Several factors have driven our margin improvement: the durable top-line gains we've pursued for many years, the leverage our subscription model provides as it scales, and the deliberate choice we made to leave the transactional Advertising Cloud business behind. On top of that, we took steps in reaction to the COVID pandemic, which brought cost reductions tied to travel and to running fewer facilities. Once we reach the FY 2021 targets, I'll give you some detail on how those savings across those categories ought to be factored into your thinking down the road. What you see here is the RPO balance, up 15% year-over-year as fiscal 2020 came to a close. That figure reflects business under contract that is obligated to convert into revenue later on, which makes where our revenue comes from highly forecastable. RPO consists of two pieces: deferred revenue and unbilled backlog. Earlier in the year, we pointed out that during fiscal 2020 there's been a shift in that mix, with deferred revenue giving way to unbilled backlog, because a greater share of our digital media business now flows through adobe.com. Subscriptions there get billed month by month instead of being invoiced once a year up front, so they don't land in deferred revenue the way much of our channel and enterprise business does. Strong acquisition on adobe.com keeps pushing that same mix shift, moving dollars out of deferred revenue and into unbilled backlog. Turning to cash flow: fiscal 2020 brought faster growth in our operating cash flow, and we reached a record $5.73 billion for the year. On the cash side, our top priority remains putting money into expanding the company, whether that happens organically or through deals such as buying Workfront. Beyond that, we're always committed to giving capital back to shareholders via buybacks. When FY 2020 wrapped up, we held roughly $6 billion in cash plus short-term investments, and we also had a $1 billion credit facility that hadn't been drawn on. That leaves us in a strong liquidity spot, backed by an investment-grade credit rating and substantial room to take on debt. As I mentioned, we have a long track record of making sure extra capital flows back to shareholders through disciplined repurchases. On that note, you're able to observe how we've kept on boosting what we put into repurchasing stock, bringing the share count down as time goes on. Today, we're unveiling a fresh $15 billion buyback authorization on top of whatever is left under the existing one, which extends to the close of fiscal 2024, showing our dedication to speeding up capital returned to investors. Now I want to discuss how you ought to view financial strategy plus the markets we can address, which form the basis of our preliminary FY 2021 targets. Let's begin with strategy. I'll mention a handful of items on this slide. Adobe possesses a distinctive financial makeup that we've talked about, and it propels our approach. We put money into top-line growth, while operational rigor pushes margin expansion and earnings growth across the long haul; owning a varied set of top products and services, we're investing to fuel ongoing top-line growth and move into fresh categories given the enormous market opportunity sitting before us. The things speeding our growth will be the investments we've placed in new businesses like Adobe Stock, Sign, and our mobile apps, which have added more than $500 million of ARR growth starting in 2017. Using data-driven dynamic planning abilities, we apply disciplined spend management principles while concentrating on margin expansion and long-term earnings growth; we aim to integrate acquisitions swiftly so that the same organic operating discipline gets embedded into newly acquired businesses. Tight oversight of our balance sheet, careful use of debt financing, and cash have produced outstanding operating cash flow growth for many years, giving Adobe the chance to keep investing in our current businesses and seize attractive inorganic growth possibilities while returning capital to shareholders. As you heard earlier in today's presentations, we've refreshed our addressable markets, and you can see we're eager to grab the opportunity ahead via the broad list of growth drivers and product innovations spanning Creative Cloud, Document Cloud, and Experience Cloud. Through Creative Cloud, we're fueling ongoing growth by widening customer segments, reaching past creative professionals toward communicators and consumers, and by involving and motivating our creative community to boost customer lifetime value. Through Document Cloud, we see a growth inflection by acquiring and monetizing new customers across desktop, mobile, and web. Lastly, we keep leveraging and expanding our data-driven operating model to run the business in real time. When you put all that together, you get a $62 billion addressable market for digital media in 2023. In a similar way, our addressable market for digital experience has grown, thanks to the broadest collection of customer experience management applications and services plus the acquisition of Workfront. With our scaled next-generation customer data platform, we expect to generate multi-year growth in the data and insights category. During Q4, we changed our reporting segments to align more closely with how we operate the business and where we're making strategic bets. The Digital Experience unit was created to speed up growth in subscription and SaaS revenue while capturing additional share in a digital experience market with an addressable value of 85 billion. Ahead of discussing what we're aiming for in fiscal 2021, let me take you through a few of the assumptions behind those numbers. Our expectation is that the macro economy keeps improving gradually across the year, so we're building into our FY 2021 model a steady rebound among small and medium businesses — a group that got especially battered in the early days of the pandemic and then began recovering in Q3 and Q4. We also expect our effective tax rate to rise, because of extra taxes on foreign operations tied to adjustments we made to our international trading structure during FY 2020. The FY 2020 tax rate we reported contained one-time benefits from recognizing deferred tax assets created by those adjustments. Over a period spanning multiple years, those deductible assets will be amortized, which brings our cash tax rate down across that stretch. Our targets incorporate preliminary figures related to buying Workfront. Because the purchase accounting process isn't finished, those figures rest on a great many assumptions.

We anticipate that purchase accounting will boost amortization of intangible assets and create a sizeable deferred revenue haircut, which should add roughly $25 million to Q1 revenue. During the fiscal year, as you're aware, ARR is measured by us on a constant currency basis, and at year-end we value ARR using then-current currency rates. Currency movements from December 2019 through this year produced a $77 million lift in Digital Media ARR. Our updated investor data sheet shows the impact of this revision. During FY 2021, this year's ARR results will be compared against that figure. Savings on costs tied to the present remote work setup will persist through the first half of FY 2021. When it comes to OpEx growth, we'll be putting money into opportunities for top-line growth. Hiring should go back to a normal rate, especially for R&D plus sales and marketing positions; we expect T&E and facilities expenses to climb in the second half as restrictions ease. Finally, FY 2021 for us is a 53-week fiscal year, and that extra week lands in Q1. As noted in the press release, we estimate the additional week will help Q1 by about $240 million in extra revenue versus a 13-week quarter, plus another $25 million in net new Digital Media ARR. Now, without further delay, these are the targets we're offering for fiscal year 2021. Total Adobe revenue near $15.15 billion, Digital Media segment year-over-year revenue growth near 19%, net new Digital Media ARR near $1.75 billion, Digital Experience segment year-over-year revenue growth near 19%, Digital Experience subscription revenue year-over-year growth near 22%, a tax rate near 19% on a GAAP basis and 17.5% on a non-GAAP basis. Share counts near 482 million shares, GAAP earnings per share near $8.57, and non-GAAP earnings per share near $11.20. For Q1 of FY 2021, we're targeting revenue near $3.75 billion, with Digital Media segment year-over-year revenue growth near 26%, net new Digital Media ARR near $410 million. Digital Experience segment year-over-year revenue growth near 19%. Digital Experience year-over-year subscription revenue growth near 22%. Tax rate near 15.5% on a GAAP basis and 17.5% on a non-GAAP basis. Share count near 484 million shares. GAAP earnings per share near $2.19, and non-GAAP earnings per share near $2.78; on seasonality, though 2020 wasn't a typical year because of the pandemic, which made Q3 especially strong with everyone working from home as we discussed last quarter, we're assuming things open back up by summer 2021; we'd expect Digital Media net new ARR in FY 2021 to rise sequentially from Q1 to Q2, decline seasonally in Q3 as has happened before, and end strongly in Q4 as is typical for us. When it comes to EPS growth, Q1 should be robust, then quarters two, three, and four will be more moderate. That's because we'll be up against the COVID-related savings from FY 2020, and also because fiscal 2021 brings higher effective tax rates. Wrapping up: FY 2020 was a record year for Adobe, and all of us are proud of that, plus momentum in the business is solid heading into FY 2021. As a market leader, we keep delivering growth and expanding margin at scale — in fact, record profit and cash flow. Our market opportunity is large and growing, as we've described; we're fueling category creation and expansion, innovations, and a growing customer universe, aiming for over $15 billion in revenue across the next 12 months. We're a disciplined operator with a demonstrated history of driving long-term top line and bottom line growth. Now we'll play a short video, and then Jonathan will start the Q&A.

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That was a fantastic video. Honestly, I can't picture getting work done without Adobe Acrobat and Adobe Sign. Thank you, John. At this point we'll transition to the live Q&A featuring all 6 of our executive speakers. If you'd like to pose a question, please queue up with our conference call operator right now, assuming you haven't already. Once you're asking a question, kindly mute your webcast so no feedback occurs. Given the format, a few seconds of latency might happen, so please hold any interjections down to a minimum. With that said, operator, let's take the first question.

Morning, and thanks for that solid rundown today. Shantanu, a few investor questions have come up regarding this current quarter and Digital Media. The amount of upside versus the plan came in a bit under what some people expected. A lot of folks want to know: is there anything we should keep in mind about the Digital Media business for this quarter? And then, perhaps even more significant, when you look ahead to next year in Digital Experience, it appears you're experiencing strong momentum. Perhaps Anil could discuss what's fueling that growing confidence and momentum in that business. Thanks.

Absolutely. I'm glad to address both of those and offer some detail. To start, regarding Digital Media, we delivered a record Q4 in Digital Media, with $548 million in net new ARR, which is simply outstanding performance. I'd say Q3 and Q4 were both extremely strong. Certainly, when you examine the back half of the year for Digital Media, the performance was remarkable. Looking at our Q1 targets, and also at the targets for the whole of fiscal 2021, as you're aware, these represent the highest targets we've ever provided at the start of a year. The growth drivers we observe in Digital Media keep going unabated. That covers everything from bringing in customers to upselling them. I think we made an effort, therefore, to give you genuine detail distinguishing the individual apps from the full apps. Our data-driven operating model lets us be quite sophisticated, so even measured against our Q4 targets, from our standpoint, it was a beat, which demonstrated the momentum in the business. Digital Media ARR, nothing there. We still believe in the expansion of the total addressable market and are truly pleased with how we performed. On Digital Experience as well, the momentum there, what occurred was clearly that during Q2 and Q3, while every company was contending with the pandemic, the priority was customer continuity and keeping employees safe. Once that shifted, everyone began saying digital is the only path out of the pandemic; they started asking who the obvious leaders in Customer Experience Management were, and our conversations sped up considerably. That was the momentum, with the Adobe Experience Platform being a clear leader, which explains why, when you consider our expectations for 2021 and what we think will keep accelerating past that, we're pleased and, all things considered, very excited about our 2021 targets.

Operator, let's go ahead with the following question.

Great, thanks a lot. Jonathan, with all due respect to Mike, I'd say your 10th year has produced a fantastic event, so I appreciate it, and clearly Adobe still has its best days ahead. I've got a question for Shantanu and one more for John. Shantanu, it's a little hard for me to square the optimism shown through those growth rates with markets that are unquestionably huge and thrilling, ones you compete in and often lead. Based on your growth projections and where run rates stand now, it sounds like you're anticipating share losses everywhere. I'm just wondering whether that's a reasonable read and what I might be overlooking. John, my question concerns slide 112 in the deck, the one you walked through regarding Creative Cloud. How should we view moving from single app to all apps, and which levers exist to demonstrate the worth of the full Creative Cloud suite? Tied to that, perhaps, how much non-genuine usage opportunity remains? Thanks very much, everyone.

I'll begin with that. As you mentioned, we're grateful for the leadership Jonathan has demonstrated in bringing together what we hope will be our sole virtual event, and that we can return to something closer to normal next year. Regarding the opportunities available to us in the market and our thinking around them, we are unquestionably the leaders in every category we're discussing. To begin with, here's why we don't view this as zero-sum. We keep holding the top position in all of those categories. I'm not sure exactly how you're analyzing it and concluding otherwise, but the reality is we are gaining share, and we've established ourselves as the genuine end-to-end leader, including on the creative side when it comes to the full range of applications. In digital experience, I believe you'll witness consolidation around where all these solutions get delivered — the Adobe Experience Platform, along with what we've discussed regarding customer data and insights. Our prospects excite us. Across every one of these areas, we remain confident we'll be number one and keep gaining share; that's genuinely how we see the expansion opportunity in front of us.

When it comes to Creative Cloud and the shift from single apps to all apps, like we mentioned, there are just so many chances for us to bring in various customers—and various kinds of customers—onto the platform, and we're certainly expanding both our communicator segment and our consumer segment. As we've observed, especially through the pandemic and work from home, the demand to build and utilize digital tools for that purpose is genuinely reaching so many distinct groups of customers. The worth of that for us, clearly reflected in ARR's overall growth, is tremendous and provides a chance for us to keep monetizing access to that customer base as time goes on. We haven't measured the non-genuine environment in quite a while. It's likely a considerable opportunity, but we make gradual progress on it when we offer a really strong entry price point for our single apps to customers who might be relying on non-genuine product. When they witness the innovations that come with our cloud-based solutions and our mobile solutions, it's definitely a method that draws in individuals who may not have even known they were on non-genuine product, leading them to actually adopt the most current, innovative offerings we have. For us, Brad, it's truly a crucial element when it comes to serving all the various segments we're able to serve and bringing more and more people into the franchise.

Thanks a lot, folks, and I wish each of you a joyful and secure holiday season.

Thanks.

Thanks a lot for fielding my questions, and congratulations on the quarter. Historically, Adobe has modeled its TAM in a very deliberate, careful manner. As your writing indicates, TAM has served as an excellent forward-looking signal for growth. For Creative Cloud in particular, I suspect many people find the substantial TAM increase compared with last year somewhat unexpected. Could you share additional detail about the assumptions behind this considerable TAM growth? What gives you such conviction, and what has shifted? Any insight would be welcome.

Of course, Mark. You have tracked our company for quite some time, so you know we treat our addressable market with great seriousness, which sets us apart from certain businesses that simply toss everything imaginable into whatever they claim their addressable market to be. Let me spend a moment on digital media and the TAM, along with a few growth vectors; starting with mobile, which has grown into — we have discussed the 300 million IDs already established — and mobile has turned into quite a remarkable funnel, both for bringing new customers onto the platform and for the methods through which we generate revenue from mobile-only services, plus the way it functions as an entry point. Until we possessed genuine mobile offerings and the capacity for these multi-surface experiences, this was not possible; we also provide storage options through certain products spanning multiple surfaces. That is unmistakably among the drivers still expanding. Given that the character of our products addresses communicators alongside creative professionals and consumers, all of these applications too. We consider that to be an additional portion of the addressable opportunity. Without question, based on what we have observed with Stock, that business is performing extremely well, and this idea of a content-first authoring paradigm, where individuals begin authoring by using a piece of content, we believe that likewise propels additional acceleration within that specific business. The number of stakeholders has witnessed us roll out increasingly more collaboration services, and those collaboration services enable us to generate revenue from that as well. Regarding the Document side, and regarding the Creative side, what we have aimed at with respect to the web — that is the reason I provided you some understanding of the scale of how many people conduct PDF searches on the web and the sort of industry this has grown into. That identical task-based methodology certainly applies in Creative; that represents a completely new opportunity. The assurance we possess in our ability to transform all of that traffic and that entire acquisition funnel into monetization models is what gives us tremendous confidence. If you consider the offerings, like Stock or Sign, and what's taking place regarding document workflows, I believe, as we mentioned in the prepared remarks, the reality is that this digital tipping point will only grow when it comes to how many individuals adopt it; that's the reason we also brought up regulated sectors, which historically might have been somewhat slower or less keen on digital. They have no chance remaining. All of this truly explains why our TAM keeps expanding.

Thanks a lot, and once more, well done — please keep yourself safe.

Thanks.

Hi everyone. Appreciate you fielding this, and congratulations on an excellent quarter along with a fantastic annual presentation. Shantanu, my question is somewhat along the lines of what was just asked — how ought we to view the factors pushing against and propelling the business once we emerge from the pandemic? Which growth areas make you most excited, in both Digital Media and Experience? John, clearly investors are happily caught off guard by the moderate margin leverage you're projecting for next year, considering the one-time T&E savings from this year plus what appears to be the new acquisition. So how should we frame the margin effects of lasting efficiencies in go-to-market after COVID, and the balance between operating leverage and growth?

Alex, the way I see it, tailwinds are unquestionably what define this company's story, and that holds true across all three businesses. On the creative side, I'd say the trend of increased content creation alongside greater content consumption spanning every media type is definitely fueling heavier use of our products. Global expansion — we didn't bring that up either — but worldwide, as digitization takes hold, that keeps acting as a favorable force for our business. The document side, I believe, will likely experience the strongest tailwinds in terms of what unfolds. That's partly why we made sure Gloria addressed our thinking on remote work and what was occurring, both regarding our own operations and how we approach remote work. I foresee considerable tailwinds in the document business, both when it comes to electronic document usage and the automation of business workflows, which in turn powers digital experience. As for digital experience — which of us will go back to waiting in line for a driver's license or a permit for anything else? My sense is you'll simply witness more and more of this. If anything, the pandemic and the health crisis have heightened the urgency, and I believe John hinted at this: every CFO and every C-level executive I speak with has digital transformation at the top of their mind right now. They're all telling me, "Alright, vaccines are coming. Once they arrive, business as usual is over. Whether you're in travel, hospitality, or one of the other industries that has unfortunately taken a harder hit, digital engagement is the sole path forward." All things considered, I genuinely don't view our businesses as facing headwinds. We remain reliant on the macroeconomic climate, which has in fact stayed quite strong. Our prospects excite us, and I'd argue the solutions we provide are becoming, frankly, more essential rather than less.

When it comes to that margin question, Alex, my view is that our approach to targeting growth reflects the fact that we're a growth company, and we intend to keep putting money into growth. Over time, we've shown that driving growth lets us expand margins as well. Looking at the original targets we set for FY 2020, margin was still expanding compared with FY 2019. We're quite happy to have delivered this operating margin level in Q4, yet we do anticipate that 2021 operating margins will come in below our Q4 high, while still expanding relative to FY 2020; that commitment is firm. The reason is that we'll be lapping a great deal of the COVID-related savings, and we expect some of those savings to be realized in the first half. With a gradual phase re-entry occurring later in the latter half of the year, we expect to be in a position to invest, since that will drive growth, and we want to keep striking the right balance between investing for growth and benefiting from those continued first half savings. On top of that, the deferred revenue haircut for the Workfront acquisition will affect us. Even so, our margin in FY 2021 will still be expanding over FY 2020.

Perfect. Thanks, everyone, and congratulations once more on another excellent performance. Stay safe.

Great. Thank you. I've got two. First, perhaps I'll ask the reverse of what Brad posed earlier, examining how ARR breaks down between the full suite and single app, since there's been so much talk about single app serving as an entry point and an appealing landing spot for communicators and consumers, and you appear to be gaining considerable traction there — so why hasn't single app's share of that mix increased? As you keep pushing that sales approach, might it eventually become more 50/50? Is the thinking that with communication consumers, they'll end up on the full offering and it simply remains balanced? Any insight would help. Second, for John, Alex said the assumption is that Workfront is dilutive, but I'm wondering whether we could get a bit more detail. We have the Q1 revenue impact, but is there anything further to share regarding either the margin impact in Q1 or what's included in the full year guide for Workfront? Thanks.

Sure. Jennifer, I'll handle the single app one. As you're aware, you need to consider both the units perspective and the ARR perspective. The units perspective keeps expanding. Keep in mind, that's also somewhere that as we bring them onto the platform, it's the single apps, that's how we bring them in. We're getting better and better at converting them to the full app. I think what you simply have to acknowledge is that single app pricing and ARPU are somewhat lower. That same pie chart we presented, that reflects the revenue view or the ARR view tied to it. When you consider the units view, it will obviously reveal a different picture regarding the greater share of what's coming through single apps; that's a model that going all the way back to Creative Suite, we understand how to execute, bringing new customers to the platform and driving that in. That answers your question about single apps and the full app model, and it's genuinely delivering results for us.

Jennifer, regarding Workfront — yes, that acquisition has just been finalized. The complete purchase accounting isn't done at this point. We anticipate a sizable deferred revenue haircut, which is pretty standard for deals like this. Consequently, there will be minor dilution. Looking at our full year targets, as you can see, we continue to aim for considerable margin expansion compared with FY 2020. That really demonstrates the leverage inherent in our operating model — our capacity to keep investing for growth while still widening our margins and earnings.