Adobe Inc. (ADBE) Earnings Call Transcript & Summary

Good afternoon, and thanks for being with us today. Joining me are Adobe's Chairman and CEO, Shantanu Narayen; David Wadhwani, who serves as President of Digital Media; Anil Chakravarthy, President of Digital Experience; and Dan Durn, Executive Vice President and CFO. This call is being recorded, and during it we'll go over Adobe's financial results for the fourth quarter and fiscal year 2022. Our press release, along with PDFs of our prepared remarks and financial results, is available on Adobe's Investor Relations website. Everything we discuss on this call, including our financial targets and product plans, reflects information as of today, December 15th, and includes forward-looking statements involving risk, uncertainty and assumptions. Actual results could differ materially from what those statements set forth. To understand these risks, please review the factors covered in today's press release and in Adobe's SEC filings. During this call, we'll cover both GAAP and non-GAAP financial measures. The results we report include GAAP growth rates, constant currency rates, and adjusted growth rates in constant currency, which also factor in an extra week in fiscal 2021. Throughout this presentation, unless stated otherwise, Adobe's executives will refer to constant currency and adjusted growth rates. Reconciliations between the two can be found in our earnings release and on Adobe's Investor Relations website. I'll now hand the call over to Shantanu.

Thank you, Jonathan. Hello everyone, and I appreciate you being here this afternoon. For Adobe, 2022 proved to be an exciting and eventful twelve months; we hit record revenue of $17.61 billion, which marked 15% growth compared to the prior year. GAAP earnings per share came in at $10.10, while non-GAAP earnings per share reached $13.71. With an emphasis on profitability, we generated record operating cash flows. Given the uncertain macroeconomic conditions, our solid results highlight how resilient our business is and how essential our products have become in a world that is digital-first. Our approach — unleashing creativity for all, speeding up document productivity, and empowering digital businesses — is creating momentum across every geography and customer segment, which positions us among the most innovative, diversified, and profitable software companies globally. We keep executing on our product roadmap, serving a huge customer base ranging from individuals to large enterprises, and producing robust growth on both the top and bottom lines. Adobe Creative Cloud, Document Cloud and Experience Cloud have turned into the cornerstone of Digital Experiences, from the very first creative spark, through the creation and development of all content and media, all the way to personalized delivery across every channel. During Q4, our revenue was $4.53 billion, reflecting 14% growth year-over-year. Within our Digital Media business, we posted our strongest quarter ever for net new ARR, coming in at $576 million, and our Digital Experience business reached its first $1 billion subscription revenue quarter, up 16% year-over-year. Now I'll hand things over to David.

Thank you, Shantanu, and good morning to all of you. Across every creative category, customer segment, and media type, the appetite for digital content is speeding up quickly. Creative Cloud continues to be the top creativity platform, providing a broad lineup of offerings spanning imaging, photography, design, video, web, animation, and 3D for every discipline. Flagship offerings including Photoshop, Lightroom, Illustrator, Premiere Pro, and Acrobat keep setting the pace in their respective categories, as we introduce fresh capabilities and boost what they can do through Adobe Sensei, our artificial intelligence engine. The swift advances we are achieving with Adobe Express are bringing in millions of additional users and providing extra value to Creative Cloud subscribers who also want lightweight, task-focused tools. Fresh ways to collaborate, such as Share for Review, sit right inside Creative Cloud and Document Cloud applications, allowing smooth creation, sharing, and review throughout creative and document workflows. Because we never stop innovating, Adobe stays the foremost place for a broad and expanding group of individuals, students, creative professionals, small business owners, and enterprises to produce and earn from incredible content faster and more easily than at any point in the past. For Creative Cloud, Q4 set a record. Net new Creative Cloud ARR came to $453 million, alongside revenue of $2.68 billion, up 13% year-over-year. Several factors produced this robust result: appetite for our flagship applications, which include Photoshop, Lightroom, Illustrator, Premiere Pro, and Acrobat; growth in SMB and enterprise, fueled by solid execution of our year-end pipeline through direct sales and our reseller channel; faster expansion in Substance 3D and Frame.io, highlighting the enduring strength and considerable opportunities within our newer businesses; and momentum at Express, our template-driven web and mobile offering for making anything from year-end sales promotions to holiday cards to social media posts. With its unmatched library of stock images, videos, fonts, design assets, and templates, plus its distinctive infusion of AI magic from Photoshop, Premiere Pro, and Acrobat, Express lets us bring the best of Adobe to customers at every skill level. Q4 kept up that exciting growth, with millions of monthly active users, visitor growth in the U.S. exceeding 40% quarter-over-quarter, and an NPS above 50. Notable customer wins include Electronic Arts, Meta, NBC Universal, Publicis, Roku, Target, and United Nations. In October, we were delighted to return in person alongside thousands of members of our creative community at Adobe MAX. That conference has long served as a chance to display our remarkable innovation, and we generated more than 0.25 billion video views across all channels. The things we rolled out spanned a lot of ground. In Photoshop, we introduced strong new AI features — for instance, a Delete and Fill tool that works with a single click to take out and swap in objects, plus a Photo Restoration neural filter that repairs damaged pictures right away. We also launched Share for Review in Photoshop and Illustrator, a service that lets designers work together easily with the stakeholders who matter. Then there's our first-to-market Camera to Cloud integration linking Frame.io with RED Digital Camera and Fujifilm, which cuts production time and costs substantially. In Substance 3D, we showed advances that let brands like Electronic Arts, Hugo Boss, NASCAR, NVIDIA and The Coca-Cola Company build compelling immersive experiences. We announced a fresh partnership in which the Content Authenticity Initiative teams with Leica and Nikon to bring provenance technology into cameras, so photographers can embed the when, where and how of an image's capture. And we gave early demonstrations of Adobe's Generative AI technology built into our tools, which holds the promise of reshaping the creative process and making it more accessible, quicker and more efficient than at any point before. Moving now to the Document Cloud segment — in both our personal and working lives, digital documents have come to mean productivity itself, whether that's an offer to buy a new home, a bank deposit form, a school permission slip or a sales contract. When it comes to digital documents, Document Cloud leads the market, delivering innovative solutions on any device and for users of any skill level. Our approach of supporting all the common document actions — editing, sharing, reviewing, scanning and signing — across desktop, mobile and web is delivering strong returns. In Q4, Document Cloud posted record revenue of $619 million, up 19% year-over-year, alongside strong net new ARR of $123 million, and ending ARR rose 23% year-over-year. Among Q4 highlights: new Acrobat features for SMBs, among them the ability to send branded agreement templates and to pair payments with e-signed documents; new capabilities linking Document Cloud and Creative Cloud that help knowledge workers and creative professionals collaborate smoothly and get more done; scanning innovation that lets users capture the left and right pages of a book at the same time, or scan both sides of an ID card onto one page; robust organic growth in traffic and in searches for PDF capabilities, which act as a key funnel toward Acrobat web; considerable growth in Sign transactions inside Acrobat, highlighting how much integrated document solutions are needed; and exceptional growth in API transactions. API calls almost doubled from one quarter to the next, which shows how strategically necessary it is to embed PDF capabilities in enterprise applications. Notable customer wins include BioNTech, Cigna, Deloitte, Mitsubishi Electric, Raytheon, Shell Information Technology and the U.S. Department of State. For Digital Media, Q4 delivered the biggest net new ARR quarter on record, fueled by excellent execution across several growth drivers in our core business. Beyond that, we're eager about the pending Figma acquisition, a huge opportunity to speed up the future of creativity and productivity for millions of people. On the whole, the regulatory process is moving along as we anticipated. The deal is under review around the world, including by the Department of Justice and by the Competition and Markets Authority in the UK. At this time, we're in the middle of the DOJ's second request process. We anticipate that the EU will review this deal as well. Our confidence in the facts behind the transaction remains strong, and we look forward to gaining clearance to complete it during 2023. Now I'll hand things over to Anil.

Thank you, David. Hi, everybody. These days, no matter the sector, any company relies on digital tools to connect with buyers and complete transactions. According to Adobe's Holiday Shopping Report, which examines trillions of data points within Adobe Analytics, online spending hit a record $11.3 billion on Cyber Monday, while mobile purchases represented 55% of Thanksgiving sales, and Buy Now Pay Later transactions surged 85% over Cyber Week. Our projection is that holiday spending will surpass $210 billion. When it comes to seizing this massive worldwide opportunity, no other company holds a stronger position than Adobe. From my discussions with customers, it's obvious that today's macroeconomic environment forces companies to make careful choices about where to invest, and digital continues to be essential for achieving operational efficiency, boosting customer engagement, and realizing maximum long-term value. Across both new and existing customers, we're generating a blend of diversified revenue streams via subscription and consulting services, which showcases the resilience of our business. Experience Cloud serves digital enterprises in every sector, spanning B2B and B2C, through our top-tier solutions covering data insights and audiences, content and commerce, customer journeys and marketing workflow — and what sets it apart is that it enables companies to generate customer demand, engagement, and growth while also achieving productivity improvements. Our extensive suite of applications, such as Real-Time CDP, is constructed natively atop our highly distinctive Adobe Experience Platform, giving organizations a unified profile for every one of their customers so they can deliver the most personalized, real-time experiences at scale. Each day, Adobe Experience Platform handles 29 trillion segment evaluations and delivers a response time under 250 milliseconds, which demonstrates the power of its real-time capabilities at scale; during Q4, we kept generating robust expansion in our Experience Cloud business, reaching $1.15 billion in revenue. Subscription revenue came to $1.01 billion — our first billion-dollar quarter — reflecting 16% growth year-over-year. Adobe stands apart in our capacity to fuel the complete customer experience, from ideation to content creation to personalized delivery to monetization. Chipotle serves as an excellent illustration. They rely on Creative Cloud to design content for web and mobile channels, and on Experience Cloud to spotlight new product offerings according to consumer preferences and enable a quicker, simpler, and more tailored online ordering experience; in the government space, the State of Illinois leverages Experience Cloud and Document Cloud to offer easier and more equitable access to state services for more than 12 million residents. Witnessing the beneficial social impact of Adobe technology is particularly uplifting. The National Center for Missing and Exploited Children has relied on Photoshop for years to produce age-progressed photos and utilizes Experience Cloud to help recover missing children. Among the other notable items from Q4: we saw robust appetite for Adobe Experience Platform along with its native apps — that covers Real-Time CDP, Adobe Journey Optimizer, and Customer Journey Analytics — and these are quickly turning into the digital foundation for major brands around the world. Demand is also picking up speed for Adobe Experience Manager, which shows how Adobe helps companies handle their content supply chain efficiently, all the way from creation through monetization. We launched a new Marketing Mix Modeling service within our data insights and audiences portfolio, letting marketers tap into Adobe Sensei's capabilities to gauge marketing ROI in weeks instead of months and to plan campaign resources more effectively. There was solid expansion in partner and Adobe professional services, which highlights how our customers keep prioritizing implementation and value realization. We also landed key customer wins with BlackRock, Chipotle, Delta Air Lines, DFS Group, Disney Parks, Elevance Health, GM, Office Depot, Publicis, Santander, and Wells Fargo. Adobe kept earning strong praise from industry analysts as well, such as leadership positions in the Gartner Magic Quadrant for B2B Marketing Automation Platforms, the Forrester Wave for Collaborative Work Management, and the Forrester Wave for Enterprise Marketing Suites. Now I'll hand things over to Dan.

Thank you, Anil. The results we're reporting today span two periods: the fourth quarter and the full 2022 fiscal year. In 2022, as everyone is aware, we faced substantial challenges: a rising U.S. dollar, higher tax rates, and the effects of the war between Russia and Ukraine. Even so, for fiscal '22 Adobe posted record revenue of $17.61 billion. That's 12% growth compared to the prior year, or 15% on an adjusted constant-currency basis. GAAP EPS came in at $10.10 for the year, while non-GAAP EPS reached $13.71. We came in above the initial non-GAAP EPS goal we set for fiscal '22, and that reflects the Company's discipline, solid execution, and adaptable operating model. Highlights from fiscal 22 on the business and financial side were: Digital Media revenue of $12.84 billion; net new Digital Media ARR of $1.91 billion; Digital Experience revenue of $4.42 billion; operating cash flows of $7.84 billion; RPO of $15.19 billion as we closed out the year; and roughly 15.7 million shares bought back over the year at a cost of $6.30 billion. Turning to fiscal '22's fourth quarter, Adobe brought in revenue of $4.53 billion, up 10% from a year earlier, or 14% at constant currency. GAAP diluted earnings per share for Q4 was $2.53, and non-GAAP diluted earnings per share hit a record $3.60. Q4 business and financial highlights were: Digital Media revenue of $3.30 billion; record net new Digital Media ARR of $576 million; Digital Experience revenue of $1.15 billion; record operating cash flows of $2.33 billion; a sequential increase of more than $1 billion in RPO during the quarter; and roughly 5 million shares repurchased. Within our Digital Media segment, Q4 revenue came to $3.30 billion, up 10% versus a year ago, or 14% at constant currency; we finished the quarter with Digital Media ARR of $13.97 billion. Creative revenue totaled $2.68 billion, up 8% year over year, or 13% in constant currency, and net new Creative ARR added in the quarter was $453 million. Good linearity across the quarter drove this performance, along with robust customer purchasing during the busiest holiday shopping weeks. Creative growth drivers in the fourth quarter were: new user growth, powered by customer demand, focused campaigns and promotions, and seasonal strength at year end, which produced strong web traffic and conversion rates during the quarter; uptake of our Creative Cloud All Apps offerings across customer segments, from enterprise, to Team, to individual and education; the strength of the new Acrobat inside our Creative Cloud offering, showing how essential digital documents and workflows are to the creative community; sales of individual applications, including a strong quarter for our imaging and photography offerings; continued expansion of newer businesses, including Express, Substance, Frame and Stock; and a solid close to the year in SMB and enterprise. Document Cloud revenue at Adobe was $619 million, up 16% year over year, or 19% in constant currency. Net new Document Cloud ARR added in the quarter was $123 million. In the fourth quarter, the forces propelling Document Cloud included demand for Acrobat subscriptions from every type of customer; ongoing expansion of Acrobat web, driven by people searching online for PDF and by product-led growth; robust results from our newly launched Acrobat offering that is integrated with Sign, which fueled upsell ARR together with adoption by new customers; and seasonal year-end strength among SMBs, partly through our reseller channel. Now for our Digital Experience segment: during Q4, revenue reached $1.15 billion, while subscription revenue came to $1.01 billion — each figure amounting to 14% growth compared with a year earlier, or 16% when measured in constant currency. What drove fourth quarter Digital Experience growth? Anticipated year-end strength, featuring sizable bookings of our newer offerings in EMEA that extend the momentum we have built in North America; successfully completing many transformational deals that reach across our portfolio of solutions; gains with our Adobe Experience Platform and native applications, RealTime CDP among them; traction with our Content and Workfront solutions, which serve as essential pieces of our content supply chain strategy; and rising customer appetite for professional services, since enterprises are concentrating on implementation and on speeding up how quickly they realize value from digital investments; throughout Q4, we concentrated on disciplined investments meant to fuel growth and awareness for our products. Our gross and operating margins remain world-class, and we delivered powerful EPS results this quarter. On a GAAP basis, Adobe's effective tax rate for Q4 stood at 22.5%, and on a non-GAAP basis it was 17.5%. The GAAP rate landed below what we had anticipated, chiefly because tax on our foreign earnings was lower than projected. RPO at quarter's end totaled $15.19 billion, an increase of 9% versus a year ago, or 12% once you account for a 3 percentage-point FX headwind. Our cash and short-term investments position at the close of Q4 was $6.10 billion, while cash flows from operations during the quarter hit a record $2.33 billion, rising 14% year-over-year; we now plan to draw on cash on hand to pay off the current portion of our debt on or before the due date, a step we expect will lower our interest expense in fiscal year '23. During Q4 we signed a $1.75 billion share repurchase agreement, and at present $6.55 billion is left of the $15 billion authorization we were granted in December 2020, which runs through 2024. Keep in mind that we gauge ARR on a constant currency basis throughout a fiscal year and then revalue ARR at year-end using current currency rates. Shifts in FX rates from December of 2021 to this year produced a $712 million reduction in the Digital Media ARR balance as we enter fiscal year '23, which following the revaluation now stands at $13.26 billion. You will find this in our updated investor data sheet, and ARR results throughout fiscal year '23 will be measured against that figure. At our Financial Analyst Meeting in October, we shared preliminary fiscal year '23 targets that factor in the macroeconomic environment along with the growth drivers across our various businesses. Though macro uncertainty persists, in light of the enormous long-term opportunity in digital and the momentum our business carries, we are happy to reaffirm those financial targets. To wrap up, here's what we're aiming for in fiscal year '23: Adobe's total revenue between $19.1 billion and $19.3 billion; Digital Media net new ARR of roughly $1.65 billion; Digital Media segment revenue from $13.9 billion to $14.0 billion; Digital Experience segment revenue spanning $4.925 billion to $5.025 billion; Digital Experience subscription revenue between $4.375 billion and $4.425 billion; a tax rate around 22% on a GAAP basis and 18.5% on a non-GAAP basis; GAAP earnings per share from $10.75 to $11.05; and non-GAAP earnings per share between $15.15 and $15.45. Just a note: our planned acquisition of Figma isn't factored into these targets. Throughout the year, we anticipate normal seasonality — Q1 sequentially down and seasonally light for new business, sequential growth from Q1 to Q2, a Q3 dip due to summer seasonality, and a strong close in Q4. Now, for Q1 fiscal year '23, our targets are: Adobe total revenue between $4.60 billion and $4.64 billion; Digital Media net new ARR of roughly $375 million; Digital Media segment revenue from $3.35 billion to $3.375 billion; Digital Experience segment revenue spanning $1.16 billion to $1.18 billion; Digital Experience subscription revenue between $1.025 billion and $1.045 billion; a tax rate around 22% on a GAAP basis and 18.5% on a non-GAAP basis; GAAP earnings per share from $2.60 to $2.65; and non-GAAP earnings per share between $3.65 and $3.70. To sum up, Adobe closed FY22 strong, executing our strategies across Creative Cloud, Document Cloud and Experience Cloud. I anticipate this performance carrying into next year, since Adobe's sustained top-line growth and world-class profitability keep positioning us well for fiscal year '23 and beyond. Shantanu, back to you.

Thanks, Dan. With the company marking 40 years in business, this feels like the ideal moment to look back at where we've been and ahead to where we're going. Adobe came into being around straightforward yet lasting values that still guide us now. At our heart sits innovation; our people rank as our biggest strength; and our customers, communities and shareholders sit at the center of what makes us successful. Across those 4 decades, Adobe's ongoing inventiveness and market leadership have given billions of individuals worldwide the tools to envision, produce and ship the finest Digital Experiences. A powerful brand paired with our corporate culture lets us draw in and hold onto the planet's top talent. It's an honor to appear once more on Interbrand's Best Global Brands list, recognized as a top riser for the 7th straight year, and also on Wall Street Journal's Best Managed Companies, where we placed first for Employee Engagement and Development. Everything needed to keep winning lies in our hands: enormous market opportunities; a demonstrated capacity to build and broaden categories that reshape markets; a wide-ranging product portfolio reaching an ever-growing base of customers; breakthrough technology platforms that push forward our industry leadership and competitive edge; a growing ecosystem that brings customers still more value; solid business fundamentals; plus the most committed and gifted employees. My confidence that Adobe's finest days lie ahead has never been stronger. Thanks, and now we'll open it up for questions. Operator?

Thanks a lot, and congrats on both the quarter and the guidance, by the way. David, could you share a bit more detail about Adobe Express and how well you're able to turn free users into paying ones? Are you noticing any effect on creative customers who try to move over to Express? And given that effect on Creative Cloud, how do you make sure paid adoption of Express holds up?

Yes. We're really thrilled about where Express stands right now. Express has just wrapped up its initial 12 months on the market. We've got millions of monthly active users. Like I said, we experienced quite robust sequential growth, quarter-over-quarter, in the U.S., which is the main market we're focused on — 40% quarter-over-quarter growth in visitors, plus a fantastic NPS above 50%. And that truly rests on the hundreds of millions of stock content pieces we offer, the 20,000 fonts we've brought in that set our offering apart, the top-quality templates; and the ongoing addition of best-in-class features drawn from our other Adobe products, such as Photoshop and Premier and Acrobat. We've shipped more than 100 releases during Express's first 12 months out there. So that's got us really excited. And so the Express business on its own keeps performing well, whether we're looking at free users or at how those users convert. But to address what you asked, we're also witnessing quite robust adoption of Express among our current CC customer base. So we see plenty of folks, naturally, purchasing our core flagship applications for the power and precision they provide and stand for, yet there are moments when those same users simply want to get something finished fast. And because Express is likewise entitled for those users, it hands them the chance to enjoy both power and precision and speed and ease. And so as users arrive, we're pulling in more users than at any point in our history across audiences we hadn't reached by pursuing intent-based search for various things. We're drawing those users in, and that hands us an amazing top of funnel. We're fueling the conversion. And we're likewise able to fuel greater utilization among CC customers, which fuels retention for that business as a whole too. So the funnel and that migration of that base looks quite healthy and is unfolding just as we anticipated.

I'd like to follow up with one more question regarding Creative Cloud Express. Clearly, you're experiencing a bit of traction with that top-of-funnel offering. Could you share any detail on what the upgrade route looks like for a portion of those users? Is there a particular upsell approach through which we might observe other products converting, perhaps even the entire suite across that expanding installed base? Thanks.

Sure. When we introduced Creative Cloud Express, as we discussed at the time, our main emphasis today is getting individuals onto Adobe Express and simply helping them succeed, whether they're on the free tier, the paid tier, or a paying tier that ultimately moves up into the core flagship applications. Usage, repeat usage, and utilization have been and remain our main emphasis at this moment. Even with that being our main emphasis, we're receiving a great deal of quite compelling data indicating that the upgrades are — though still early and not our main emphasis — functioning. Take, for instance, the many higher ed institutions where we've begun deploying Adobe Express: we're starting to witness not only growth in Express usage, but also rising demand for Adobe Creative Cloud flagship applications. Once more, part of this stems from our knowledge and conviction that creativity should belong to everyone and that creativity represents the new productivity. Yet as individuals begin to leverage that creativity and gain from it, they naturally desire additional power and precision too. So the two really do go hand in hand.

I'm wondering whether there's anything you can do on the operational front to get ready for the Figma acquisition, whether that's on the expense structure side or the development side, at this point ahead of close? And if there is, which moves are you making?

Sure, Sterling, let me address that. To begin with, it's great to see that ever since we announced the deal, there's been enthusiasm around what the two companies could accomplish together, and also — as our results show — around interest in the core business. So overall, we're thrilled about it. Obviously, while the regulatory bodies review it, we're able to concentrate on strategic thinking. Customers are giving us plenty of positive feedback. That said, these remain two separate, independent companies; and when it comes to our own cost structure and our technology, we're feeling very good about every prioritization we've made. So we believe we're in a unique position to capitalize on it right away once it closes.

Congratulations from me too on wrapping up the year so strongly. To build on what Sterling asked, I'm glad to hear that the Figma closing is proceeding on the timeline everyone anticipated. Could you share where their business stands now compared with what you said when the deal was first announced, particularly in light of how the macro backdrop has shifted since that point? Thank you.

Brad, since they remain privately held, as you're aware, we are definitely not free to discuss that; and they must keep pursuing their own opportunity on their own.

All right, I see. Thanks, Shantanu.

Much appreciated. Let me also offer my congratulations. Shantanu, the level of vitality and buzz among the crowd at the MAX conference was really something. I'm curious: out of all the new things you introduced, which one generated the greatest excitement — and which do you figure could actually be turned into revenue? Could it be generative AI, or perhaps that Share for Review feature, the Intertwine functionality, or something else that's rising to prominence?

Mark, first of all, I appreciate that you came, and clearly you were paying attention to all the neat, fresh, creative offerings that got rolled out. Questions along these lines always make me a bit uneasy, because it amounts to asking, you know, which of my kids is my favorite. Still, let me address it in a thematic way — what David and Scott demonstrated, namely the flagship applications; we keep working to ensure those flagship apps become easier to use, more efficient, and more enjoyable. So thematically, that's one area where the team has performed exceptionally well in ensuring we keep shipping inventive features. You brought up Intertwine and Illustrator. Thematically, the second point is how we bring additional users into the ecosystem. David touched on this too when he fielded those two questions about Express — meaning the more users we draw into the ecosystem, be it via our trial offerings, via Express, or via taking part in the collaborative workflow, that only expands the addressable market for Adobe. Consequently, I believe what we're doing around collaboration keeps broadening access to what's possible; so that excites me quite a bit. Then there's the AI and the sneaks you mentioned — the promise of that, whether you look at the individual fonts being generated or the ability, through text, to produce your content precisely as intended. Mark, I'm certain you've likewise been following what's taken place with chat GPT and what's achievable regarding text. So across that whole space, our guiding vision has always been: anyone with a creative idea — how do you bring that creative idea to life? And so, I think about shifting from hundreds of millions to billions of users who can engage with it. You're correct that this has a deep effect when it comes to bringing more users onto our platform. And I believe you'll find us being fairly aggressive in shipping more of that functionality in an augmented fashion, possibly beginning first with Express. But all of it has us excited; and the Frame acquisition is certainly underway too. I think David and Dan discussed Substance. So we feel quite positive about the several drivers of growth.

Let me fine-tune my response slightly here. Those 3 cases you mentioned are quite compelling, since intertwine shows how we keep innovating within our current flagship app. That means it keeps pulling people in and getting them to stay engaged and onboarded into the applications, which keeps all of it feeling new and distinct. As for Share for Review, that first rollout is still at an early stage, yet the repeated usage we've seen once folks begin using it has truly surprised us. That gives us a strong growth loop. Since, as you're aware, anybody who receives a shared document — a Photoshop document, an Illustrator document, or any other kind of document — is also someone who, as a stakeholder, could become a future Adobe products user, whether that means the Photoshop document leads to Photoshop usage or whether it means encouraging people to give Adobe Express a try. So those growth loops matter a great deal to us and are genuinely compelling. And I simply wanted to ensure that this opportunity was visible to everyone.

Shantanu, there's a term I want to ask you about, one you brought up frequently at MAX — and actually a fresh three-letter acronym you're using too, which is product-led growth. The thing is, Adobe has pretty much been a product-led growth business for the 30-plus years I've been acquainted with you. So now I'm curious: what does product-led growth mean in a different way today versus what it may have meant in earlier times? And along those lines, how do you view the cross-sell and upsell chance you mentioned at MAX as well, particularly when it comes to 2023?

Yes. Jay, I appreciate you acknowledging that our innovation has truly arrived through a very tight connection with customers. So, in earlier days, during the desktop period, the essence of product-led growth was ensuring that when we interact with customers, when we interact with the community, we could leverage that. Perhaps the finest illustration from the desktop period was what we accomplished with Lightroom. When we initially launched Lightroom, since we already had Photoshop as a product, simply getting millions of individuals to use it even prior to shipping the product, having all those evangelists plus a terrific product, I'd say that was a terrific illustration. What the team across Creative Cloud and honestly, across the Experience Cloud, is doing actually also builds on the excellent work we spearheaded in the Document Cloud. And so, with the Document Cloud, I'd say product-led growth was really tied to, as we considered what people were searching for when we launched our web-based offerings for Acrobat, that's the moment we began to witness this velocity in how we interact with customers and in prioritizing what's plainly foremost in their minds; our capacity to satisfy them right away, I'd say, ramped up considerably. When David arrived, David basically said we need to elevate this to an entirely new level with product-led growth, and it brings together the community plus, honestly, at this moment, engagement and engagement marketing within the product. And so when you join product sessions at this moment, and you observe the product manager and the engineering manager plus the product marketing manager, every one of them is aligned; we have data; we have instrumentation inside the products and your capacity to do both AB testing and here's where we rely on our own products and the products that Anil handles. And so, product-led growth at this moment means saying that at any moment, we likely have 3 tests in market for a given feature too. And we're leveraging that to genuinely learn from customer interactions and to ship higher-quality products faster. But David has truly been the pioneer; so, David, would you like to add? And then perhaps a bit, Anil, on what we're doing for that in Digital Experience too.