Adobe Inc. (ADBE) Earnings Call Transcript & Summary

Welcome, everybody, to Adobe Summit 2025 Investor Meeting. I'm Steve Day, I'm Interim Head of Investor Relations here at Adobe. Thank you all for coming. It's great to see such a large turnout from our investment community here in the room. I'd also like to thank and welcome everybody who's joining us globally on the webcast. Thank you for joining. And finally, I'd like to extend a warm welcome to our Board members that are joining us in the room today as well as to Gloria Chen and Lara Balazs, who is joining us as well, the other members of our executive team in the audience today. Before we start, some housekeeping. The statements that we'll be making today do involve forward-looking statements that involve risks, uncertainty and assumptions. Our actual results could materially differ from those set forth in these statements. Please refer to our SEC filings as well as the Q1 earnings press release, which has more information and the risk factors that you'll find as part of our periodic filings. The non-GAAP disclosures and reconciliations you'll find at the end of the presentation will be posted to the IR website today. Okay. Let's take a quick look at today's agenda. Shantanu will kick us off with an update on Adobe's strategy. David will follow that and go into detail on the strategy for the business, Professional and Consumer and the Creative Professionals and Creators businesses. Anil will uncover strategy for the Creative and Marketing business before Dan sort of brings us home with Adobe's growth agenda. After the presentations, Shantanu, Dan, David and Anil will join us up here on stage for Q&A. Before we get started though, just let me take a moment to remind you of some of what you heard from us on the earnings call last week. Strong Q1 results beating the high end of our target ranges for all metrics as well as generating almost $2.5 billion in cash from operations and buying back 7 million shares. Here's Adobe's Q2 targets. As a reminder, and finally, we reaffirmed our full year targets for FY '25. Before I hand over to Shantanu, here's a view of the new customer group's disclosure that we also shared last week. This is a good visual to remind you of how we're looking at our business in the new customer groups. Business professionals and consumers comprises of the full Acrobat business for both the Document Cloud and the Creative Cloud as well as Adobe Express. Creative and Marketing Professionals comprises the remainder of Creative Cloud and the Experience Cloud. You're going to hear a lot more about this today. Okay. Let's get into it. Please join me in welcoming Shantanu up on the stage. Thank you.

Thanks. We normally don't get an applause at a financial analyst meeting, and I'm absolutely fine with that. But thank you again. I really would like to welcome everybody who's joined us here at Summit and on the live stream. I hope you had an opportunity to actually see the keynote and tremendous innovation that we're going to be delivering. And if you haven't, I do encourage you to see the replays. And as Steve mentioned, the real focus for today is to actually continue to expand on what we previewed in the earnings as well as talk about our customer-focused strategy in the era of AI. Yes. But before I start, one of the things I've actually been doing is talking to a number of you, both on the buy side and on the sell side to understand what's top of mind. And as we plan for this meeting, what are the things that you really wanted to make sure that we focused on. So let me play back a lot of the reflections that I heard in conversations with a number of you. The first one is you really wanted to get a lot more visibility into how the Creative business has evolved. So we'll spend a lot of time on the Creative business, how that's expanded, the different customer groups that exist, what are the leading indicators by customer groups, how are we thinking about innovation, what's the role of AI. And so that's certainly an area that we hope to add a lot more about what our go-forward strategy is. The second one was all about AI monetization. Give us some more color on AI monetization, how are you monetizing it? What's the influenced AI revenue? What's the direct AI revenue? How are you thinking about it? So that's another area that you'll hear all of us touch on. Competition. A number of you did want us to make sure that we talked about competition, what's happening, whether it's with different customer groups, maybe the low end as you've reflected upon that. So certainly, that's another area that we'll continue to touch on. I think a fourth theme that a number of you talked about was give us more visibility into what's happening in the enterprise. How do we think about the offset that might happen as enterprises are investing more in content, what's the relationship between what you're doing selling Creative in the enterprise versus how that plays out as it relates to the adoption of technology. There were some questions around seats. So that's, I think, one of the other areas that we are talking about. The area where perhaps I got a little bit more mixed feedback from both the buy side and the sell side. Certainly, there were a number of you who were like, "hey, can you give us a little bit more visibility and transparency," and we've tried to do that. And there were a number of you who like you're giving us way too much data. And so a number of the people are potentially losing sight of the forest from the trees. So we're trying to balance all of that, but we'll get into it. And then certainly, we'll talk a lot more about the questions as well. I think what's really important for everybody to make sure that you take away is how we think really positively about what we are doing for the customer groups. The requirements for the customer groups, the products for the customer groups, the leading indicators for the customer groups and how we're innovating in the customer groups is very different. So you'll hear us touch a lot more about what that means by customer group, what's the product, what's the leading indicator, how do we think about distribution. And we think that's, frankly, a much better way for you to both unpack the Creative business as well as think about what's happening between creativity and productivity and creativity and marketing. So that's an area that we're going to spend a lot more time and we look forward to answering other questions that you have at the end of today's presentation. But let me start off by saying. As I think about the opportunity that exists for Adobe ahead of us and the amount of innovation that we're doing, whether it's the addressable market, whether it's the brand that we have, whether it's the products that we're delivering, I could not be more excited about Adobe's future than I am today. So as we think about getting started, let me reiterate the mission that we have for ourselves as a company. We continue to believe that changing the world through personalized digital experiences is more relevant and offers more opportunity than ever before. And so as a company, we're really focused on making sure that we unleash creativity across every facet of digital experiences with ideation, how people imagine and express these ideas. What's the creation and content that they're doing. And increasingly, how they are orchestrating it. A number of you have asked us to share more about how we see agents. Hopefully, you heard what Anil did and the introduction of what we are doing with the agentic AI platform as part of the Adobe AI platform. But I think making sure that we can deliver that personalization of content and orchestrated across every channel and understand how it's actually been working is another key part of how we think about our mission going forward. We shared this slide as a preview during our earnings. But I think it's a really important way to take a step back and think about how creativity has both exploded and how it's evolved over the last decades. When you think about creativity, I think a number of us talk about what it means in terms of creative outputs, where is all this creativity going? Is it going in the design of a web application? Is it going in the design of a website? Is it going towards gaming, entertainment and what the media is? What is happening as it relates to business communication? And so as we think about the evolution of creativity, it's really important for us to understand what customers are using this for in terms of what the creative output is intended to do, whether that's an industry that's being created or whether it's how that content will eventually be used and how it's effective. The other way in which creativity has certainly exploded is the number of different categories that have emerged. When I started at the company, most people used to talk about just print publishing. But then as you think about how the web got added, mobile got added, new categories like AR and VR got added, product design, UI/UX. The reality is the creative categories have also exploded. And we believe that we are still the only company across this entire spectrum of creative outputs and creative categories that has the most comprehensive technology platform, brand as well as offering. Now it is certainly true that in some of these creative categories, Adobe does not play a role. And we still think that's okay because unless the category is a category that we believe is big enough and one in which we win, we still want to make sure that the assets that people use in those Creative categories can come into whatever create output they want to do. So that's one thing. And as you ask us about where we are, for example, in product design, we can talk to you about where we do play a significant role and where we don't. The other area where I think this has significantly evolved is in the customer groups, as we touched on again. And so when you think about the customer groups where this has emerged, there are 3 big categories of customer groups that we wanted to talk to you about. The first, and again, the absolute core of what Adobe focuses on are the creative professionals and the next-generation creators. It is those folks who want to use creativity for a living that represents the core of the customer base that we address. And the reality is that the innovation that we continue to deliver for that core creative and the next-generation creators, which is a rapidly expanding market. Adobe is still the only company that provides a comprehensive offering, as I said, across web, mobile and desktop and how we've infused AI in that has really been outstanding. So that's the core creative professional and the next-generation creators. Increasingly, a lot of this content that's being created is going into the marketing use case. You heard that today at Summit when we talk about GenStudio and how that's going. And so the increased usage of content within the marketing community, within agencies, within enterprises is what we are also uniquely positioned to win in because we're the only company that both creates this content as well as addresses the life cycle of that entire content with marketing professionals and marketing technology. And so it's a combination of creative pros and marketing. That's the reason why we're grouping that as one customer group and reflecting what our strategy is across both of those. The other key customer group that we want to talk about is what we do with business professionals and consumers. And with business professionals and consumers, and I'll touch on this later, that is where these are billions of consumers all around the world. They have some form of business communication, some form of education, communication, some form of individual creativity that they want to engage with. And in order to serve them, we have to address them with a different offering at a different price point. And so that's, again, the reason why when we think about these customer groups, we have separated them in terms of how we think about the go forward. Each one of these opportunities, and David will touch on this, is an incredibly large opportunity, but they have different requirements, and we are investing in how we innovate for them in a different way. And so that's a big part of how we will talk about how we are seeing progress across each one of these opportunities. And if you reflect then how Adobe has grown over the last decade, we have grown by serving a much broader set of customers. But we've served them with really 3 clouds. We serve them with the Creative Cloud, which has always been the go-to suite for products for creative professionals, but we've expanded the usage of that also to business professionals, marketers and consumers. Document Cloud actually started off with serving the needs of both creators, which is why Acrobat was within that particular cloud, but knowledge workers. And that's also being used to serve the broader customer base for Documents and DX started off with just marketers and over time, expanded to serve everyone that's involved in creating, deploying and managing digital experiences. The intent behind the next 3 slides is actually to show you the evolution and while it has resulted in substantial growth, we also want to reflect how we think we need to evolve it moving forward to make sure that we capitalize on the growth opportunity ahead of us. So the first way we've certainly grown is by defining category-defining clouds. The second way in which we have grown, if I can go back to the previous slide, is actually -- sorry, the previous slide, is the offerings is by expanding the product offerings. So a big part of the success that Adobe has had is by making sure that these offerings have also expanded. When you think of Creative Cloud, the success that we've driven from Creative Cloud is through a variety of offerings, individual apps. Individual app tends to be an on-ramp for anybody who has a creative aspiration. CC all apps tends to be a win which we serve the entire creative community. New services and offerings, whether it's stock or frame for collaboration, more recently Firefly is ways in which we are increasing the kinds of products that we deliver for the Creative Cloud. And the same thing plays out in both Document Cloud as well as Experience Cloud. In Document Cloud, we started off certainly with reader a freemium model that enabled anybody to view PDFs and then started to monetize that through various Acrobat offerings. And we did the same thing recently with Acrobat AI Assistant. And on Experience Cloud, we started off first with the combination of web content manager and analytics, which was content space, but then we expanded into the data space with what we did with the Adobe Experience Platform and then into the Journey space with products like Adobe Journey Optimizer. But we're bringing all of these together with GenStudio. So that was through the product offerings. And then we expanded our business significantly by routes to market. If you think about the routes to market that Adobe has today, we believe that, that's a tremendous asset. Through adobe.com and app stores, we have served billions of users. Through the Creative Cloud, we've also been selling through inside sales as whether it's resellers, and that's a significant portion of our business as well. And finally, enterprise sales and SIs, which is a more recent evolution of the business, we have built an absolutely world-class enterprise sales group as well as our partner ecosystem that enables us to go to market and serve these customers well. So it's really been a combination of grouping the products within a cloud by expanding each of the offerings within the cloud, by expanding the routes to market that we have grown this business the way we have over the last few years. And in fact, we take pride in the fact that Adobe has completely shaped the creative landscape as we know it today. But as we think about how this is going to change in the era of AI. And this was again a slide that we provided in the preview of our earnings. We wanted to make sure you appreciate how we believe each of these categories is going to change and how we win across each one of them. When you think about business professionals and consumers. The reality is that they want ease of use across web and mobile, and they want to start to experience all these products through a freemium model. They're all looking for quick and easy AI-first category-defining creative applications to help them stand out. I think this market exploded through the use of what were called templates at that time. But we believe that, that will be completely disrupted again, and it will move to being an AI-first application where you can have a conversational interface in order to have the kind of creative expression that you want. And secondly, we believe that this will emerge with productivity. There will be no communication that goes out, where you're not going to combine creativity and productivity. And we really believe that Adobe is best positioned in this market with the combination of what we have with Express and what we have with Acrobat in order to serve that business professional and consumers. And again, as I said, I think there are billions of people in that particular category. When you think about Creative Pros and what Creative Pros need, first and foremost, they need power and precision. They need to be able to take anything that's an imagination in their mind and create the exact output that meets that concept that they have. So they want the flexibility and power of being able to do this on mobile devices. They want the power and flexibility of doing this on the web, but they want eventually the power and precision that they expect because they are doing this for a living. We think we're uniquely positioned to meet that market and win in that market first as a result of our flagship desktop applications. We have, without a doubt, the best applications in this particular category. By introducing web and mobile offerings, and David will touch on this again, we want to make sure that we take the power of our desktop applications and put them in the palm of their hand. And by introducing new Firefly subscriptions and services, we're also entering the entire new category of ideation and making sure that support for multiple models whether that's multiple models that third parties are creating or whether they're Custom Models, it's the combination of the flagship applications on the desktop, web and mobile offerings, Adobe's own Firefly offering as well as support for third-party models that makes this a category that Adobe is uniquely positioned to win. And then when you think about marketing professionals and what they want to do, the reality is they just want to create an unprecedented volume of content. The amount of content that they are creating and the speed at which they need to create it and automate it is just dramatically exploding. And you heard a lot about that this morning. Marketers are looking for agility. They're looking for self-service. They're looking for the ability to actually create these campaigns to ideate on the campaigns and they want the workflow between marketers, IT professionals, agencies to be seamless. The reason we think Adobe is uniquely positioned is that GenStudio is the only product that can bring together creation and production, workflow, asset management, activation and delivery as well as analytics and insight. And if as we believe the entire battle will be fought on not just the content creation and the automation, but the delivery of that content and the understanding of the analytics, that is what we believe will further accelerate with AI and what, again, we're uniquely positioned to do. And then as it relates to how this accelerates, we really need to make sure which channel is most appropriate for addressing the needs of each of these markets. So again, with business professionals and consumers, a significant portion of that will be through app stores, it will be through a freemium business model, but a significant portion of that also goes into the enterprise. For creative professionals and creators, this is flagship applications, it's applications on the web, and it's a new Firefly set of subscriptions but the marketing professionals is all through the enterprise. So that's hopefully a little bit more insight into how we think about how AI accelerates the opportunity. And here, again, this is a real focus on how we will go to market with these customers in mind. So as we think about the next decade of growth, we will focus our products, our offerings to address the needs of these 3 massive customer audiences and helping them succeed. What I wanted to do was just in a single statement or a sentence tell you what exactly our vision is across each one of these 3 segments. If you look at the business professionals and consumers, the real goal for Adobe is to make sure we have AI-powered quick and easy apps that help people to stand out through productivity and creativity. For creative professionals and creators, it's power and precision to bring any one of their creative vision to life across any media type across any surface. And for marketing professionals, the whole idea is to deliver what we call customer experience orchestration to create, deliver and optimize these personalized digital experiences. With that backdrop, if you look at what Adobe's business is today and our routes to market, let's share some facts. As all of you know, we have approximately $20 billion right now in subscription revenue. So this just represents the subscription revenue for the company. But some of these other statistics, we have approximately 750 million people who are our digital media monthly average users. I know we've shared in the past that we have approximately $650 million on Acrobat. So if you think about the $100 million, the $100 million are people who use our creative products. Now these do not include, in many cases, what is actually being used both within the enterprise because those tend to be named user deployments as well as in education. So there is some overlap between those. When you think about what's happening in web and mobile as an early indicator, over 50% of the MAU is now web and mobile as a percentage. So we're clearly meeting the customers where they need to be. We have approximately 22,000 customers. This is again across the DME business and the DX business as we reported today. But one really exciting thing for us is that we are seeing over 100% year-over-year growth of joint creative and marketing deals. So the One Adobe story to deal with the entire content life cycle is certainly being successful for us. And again, what the 2 circles show is both by our route to market, how much of that is going digital and channel versus the enterprise and how much of it is going in the additional disclosure that we provided on creative and marketing professionals and business professionals and consumers. And for those of you who have protractors and other devices, these are to scale, I'm pretty sure. So let me switch gears a little bit and talk about our AI strategy because again, as I said upfront, that's a big question that a lot of people want to know how we intend to differentiate ourselves. And we've always believed that Adobe's AI strategy is really differentiated because we operate across all these 4 layers of the stack. On the data, we were the only company that licensed data that was used in all the creation of our models. So for FireFly, it continues to be a significant differentiation for us that not only can we since these were designed to be commercially safe, indemnify our users, but we can also create Custom Models where we can ingest every customer's data and create a custom model for themselves. So on the data, I think we did a really good job of harnessing these data assets and unlocking first-party data. On the models, it was absolutely critical for Adobe to make sure that we invested in creating these own models because we believe that controllability of the models at the end of the day is the only way in which you can deliver industry-leading applications. And David will touch on that. We've released the new video model. We have image model, vector model, voice model, and we're certainly working on another significant other set as well as in the PDF area because we have our PDF models that were used for what we did with liquid mode so that you can have independent resolution on mobile devices. So we'll touch more on models. Agents. Agents orchestration. As we think about agents and as we think about what agents need to do, at the end of the day, they need to come together to achieve a business outcome. And so we've already started to deliver some of these agents and the agents can be used to talk to other agents or, in fact, on the marketing side also work with users to accomplish whatever the business task is. But at the end of the day, the way we monetize all of this is by deeply integrating all of the stack into existing products and solutions as well as launching new apps and services. And so let's talk a little bit about the entire AI platform and how we think about it. At the core, we have our Firefly models for creative. We have PDF models for everything that we're doing with PDF and we've also created a number of customer experience models that Anil can touch on. All of these are tied together with third-party models, if you want, through a common API that our products use. And in addition to that, we are now creating the set of creative, document and experienced customer -- customer experience agents so that we can actually deliver that functionality. We will also partner. We will partner strategically with third-party models, whether it's Amazon, Google, which is VO2 and Imagen, Microsoft, Runway, BlackForest, and put them within our applications, and we will monetize that by actually charging the customer for the usage of that within our applications and interfaces. And so hopefully, you get a perspective of how we're doing all of our AI across the stack. With respect to monetization, I wanted to share with you at the earnings call, we talked about what our new AI-first products were, and people asked for some additional disclosures. So the new AI products only refer to products that were created in the last couple of years. As you could see, that was a $0 billion business at the start of fiscal '24. But when you think about Acrobat AI Assistant, Firefly App, Firefly Services and GenStudio, that is the number that we provided that we believe will be greater than $250 million, and it was $125 million. So we're off to a great start. These are brand-new AI products. What we also wanted to share with you is how we believe we're not only infusing innovation into our existing portfolio, but we're monetizing it better than we believe most companies. And so what we wanted to do was talk a little bit about the AI influenced ARR as well. Let me touch on 4 areas. You will see later, I think, in Dan's deck where he talks about the number of subscribers that we have. And for those of you who will measure it, that will be a little north of $45 million. And again, as I said, that doesn't include education and named accounts. So the way we think about influence revenue is in 4 different ways. First, for DX, when you sell higher priced tiers, that is what we consider influence revenue. And so that DX book of business that's actually in the upper tiers is in the $3.5 billion number. When we think about Acrobat and the people who are buying Acrobat AI Assistant and therefore, are also using Acrobat as part of either a Creative Cloud or Document Cloud offering, we attribute AI also in helping grow that particular revenue. The third one is we look and measure what is the change in attrition and retention for people who are using our products. And therefore, how is the usage of AI within our products actually driving more usage and therefore less churn. And then the fourth way in which we think about what's happening with the existing portfolio is we do have higher-priced premium offerings. And as you know, we have put generations in some higher-priced offerings. And so we look at the higher-priced offerings and we attribute what part of that can be applicable to AI. And it's the combination of those that is actually greater than $3.5 billion, as we said, ending ARR exiting fiscal '24. The other piece of good news for us, as we look at the trends in this particular business is that's actually growing faster than our business. And we clearly expect and imagine that we're going to be infusing AI in all of us. So if you ask me how you think this business evolves over time, I would say every dollar of revenue, we want that to be $1 of revenue that has an AI implication on it because that's the way we do it. But I know since there were a lot of questions about how we thought about AI monetization, we just wanted to at least share on the left side, what we are doing as it relates to the higher premium offerings, whether that's in DX or in Creative Cloud, whether it's the impact on usage and therefore, the impact on churn, what's happening as it relates to attribution of when people are buying both Acrobat as well as one of the stand-alone products like Acrobat AI assistant. So hopefully, that gives you some additional disclosure on how we think about how we are monetizing AI. Okay. So if I were to summarize all of this, when I think about our strategy, business professionals and consumers, creative professionals and next-generation creators and marketing professionals are clearly the customer groups that we're focused on. For business professionals and consumers, delivering those AI-powered easy apps through a freemium model, leveraging the monthly average users that we have as a combination of Acrobat and Express is clearly the way we believe Adobe will win. On the creative professionals and creators, it's all about power, precision, Firefly, ensuring that we have the best models, ensuring that we support the third-party models. It's a growing category. We're clearly the leader in the space, and we want to just continue to expand on our leadership. And with marketing, combining what we can do with creative content and marketing professionals, we're the only company that actually ties together the entire content life cycle, and we believe GenStudio, again, is an extremely separated and differentiated product for us to be able to do that. And how we win then. Product innovation. We have to continue to drive and lead categories in creativity, productivity and marketing. We have the scale, differentiated route to market, whether it's for SMBs, whether it's adobe.com and direct, whether it's for the enterprises. And I continue to believe that in the creative community globally, we have this exceptional brand as well as a global reach. So I'm extremely confident of Adobe's continued execution against this strategy. I'm extremely confident that we will drive creativity and productivity that we will continue to innovate against the creative core customer base that has been the center of what Adobe has focused on for decades, but we will continue to expand it in the marketing use case for enterprises, which again represents a massive opportunity for us. And so I believe Adobe's best days are ahead of us. We continue to have aspirations to make sure that we grow the company double digits, and we continue to grow EPS greater than that. And so with that, David and Anil will go into greater detail on each of the 3 audiences and then Dan will come back to talk about financials, and I'll come back to take questions. David?

All right. Okay. So as Shantanu talked about, creativity has been going through an evolution over the last many years, right? It used to be the domain of a limited set of creative professionals that controlled and created the world's best content. Today, it's really more of the foundation of how we all communicate, right? Whether you're a business professional creating visual presentations whether you're a Creative Pro doing everything you can to keep up with a bunch of the post production demand that's on your plate, whether you're a marketer trying to engage with people on social with social posts. And this has led to a lot of evolution of the landscape. Obviously, it's increased the opportunity and the opportunity set, but it's also brought in a lot of new entrants into the ecosystem, right? And most of them serve niche opportunities. And some of them, like Canva, are reaching a much broader base of businesses -- business professionals and consumers than most prior entrants had done it. Now at the same time, the opportunity here is to reach billions of users, not hundreds of millions of users. And we believe that Adobe is obviously uniquely set up to do that because of the benefits of what we have in our total landscape and the opportunities we have to bring products and capabilities together in new ways to really service the needs of these individual audiences. And that's really what Shantanu teed-up and how we've been sort of talking about these new audience groups. But to maximize the opportunity here, we also needed to evolve how we think about our products and how we deliver the products. We've been stretching the lineup, and this is something I've talked to many of you about over the last couple of years, but we've been stretching the lineup to really reach a broader opportunity than we've ever had before. We've done that for existing Creative Cloud and Document Cloud apps by focusing on adding more value, right? The Creative Cloud apps now have Firefly integrated into the applications. We talked about the fact that we've now seen over 20 billion generations from these. We also have a new stand-alone Firefly application that's available and that is starting to really drive more and more usage of those generative credits that we announced 1.5 years ago. And in fact, in the last year, we've seen generative credit consumption go up by 2.5x already. And so this creates a lot of headroom for us with this core base of customers that we've always serviced with more opportunities for tiering for things like Creative Cloud with Firefly, and Document Cloud with AI Assistant. So lots of opportunities to continue to serve and grow that core base and increase tiering and opportunity for ARPU with our existing customer base. But we've also been focused on attracting more new users into the franchise. And we've been doing that by accelerating what we're doing with web and mobile. In particular, we're excited about the resonance of what we're doing. We've seen mobile traffic in the last year, grew over 60% to adobe.com as an example. And we're delivering and reaching those audiences by delivering a new set and family of web and mobile applications. So things like Acrobat Web and Mobile, Lightroom on web and mobile, Express on web and mobile. And last month, we introduced Photoshop on web and mobile and Firefly in web and mobile. So we're very excited about this lineup and family that we have to meet the demand of this next generation of creative professionals and business users. And as Shantanu mentioned, that's translating to really strong MAU for us, right? With web and mobile now making up more than 50% of the total monthly active users that we have. And while we're seeing this incredible growth, we're also starting to see great usage and we're at the early stages of converting that usage and free usage into conversion and monetization. Now as you continue down that path, the other thing we talked about was that we wanted to stretch this lineup behind the traditional way you look at the Digital Media business with P x Q. We knew that enterprises and especially with all the work we have done in Anil's organization going into these enterprises, we knew that enterprises have been facing an incredible need to drive more automation into their ecosystem, especially when it comes to content creation. So new solutions like Firefly Services and Custom Models are off to a great start, and they were joined by GenStudio for performance marketing in October of last year. We've, now with our customers, trained over 1,400 Custom Models. So it gives you a sense of the fact that customers are using Firefly services with their own proprietary data sets. And if you take a look at Firefly services deals that we've done under $1 million, so what we refer to as the run rate, the deals that we land and that we can expand. On average, those are landing at about $250,000, which is a good indicator that we are definitely past the P x Q and really more focused on how much value and how much content are you trying to generate with expand opportunities as people use and generate more content. And beyond that, those numbers, it's also important to note that we do have transformational deals where a number of customers have gotten into Firefly Services in a very large way and we're doing transformational deals of multiple millions of dollars with these. So it gives you a sense of the run rate business, and it gives you a sense that these deals and these businesses can all scale to millions and millions of dollars per account. So we're very excited about how we've evolved that lineup and how we've created the opportunity to map the lineup, the products, the pricing and the packaging to those new customer groups that Shantanu talked about. And all of this is possible because at the end of the day, underlying everything we're doing is a creative platform built inside this AI platform from Adobe that Shantanu was talking about. So this core platform and these capabilities of creativity that's embedded in them are all relevant as it comes to the business professionals and consumers, as it relates to creative professionals and creators, as it relates to marketing professionals. So I want to walk you through in a little bit more detail what the creative AI platform is inside that broader AI platform for Adobe. As the foundation, and I think we've talked about this, but I really -- this is important for people to understand that the foundation, it's the data, how it's sourced. Everything we do, we have full access rights to. So everything we do is commercially safe. And I will tell you, this makes a huge difference, huge difference when we're talking to enterprise customers because they know that they can safely use it not just for ideation purposes, but they can use everything created in these ecosystems directly in production. The second thing on top of that we've been doing has been very busy with first-party models. So we've built models for imaging, vector, design, video, voice, sound effects, 3D, these are all coming out, translation models. These are all in market or about to be in market very soon. They're also the foundation of how all of our core capabilities show up in our creative applications, our DX applications and our Document Cloud applications. But in addition to that, one of the things we also want to do is we want to bring third-party models into the ecosystem. And today, we just announced that we are working with and we've officially signed agreements with Google for their video and imaging models, Flux, Runway and [ Fall AI ], and there's a whole host of more that we're going to be bringing in. So no matter what model you're looking for, you should come and do it as part of Adobe because you get all of these models in addition to getting the Adobe models that are commercially safe and that are toolable and that are sort of integrated in addition to all of the tooling on top of it. So there's really no reason to go anywhere but Adobe and sort of create this opportunity for people to come and use and leverage all of this creative innovation happening in the entire market through an Adobe platform. On top of that, we've enabled Custom Model development. I mentioned already, 1,400 Custom Models have been trained. On top of that, we're really focused on creative controls, things like being able to identify the style, the structure, the scene composition, the prompt coherence of what you type in is what you should get out. That foundation of layer sits on top of everything here. And more and more, and you'll see more of this today, we're investing in agentic capabilities. In the context of creativity, that means understanding layout, that means understanding style, that means understanding motion and composition. And then, of course, wrapping those agents with orchestrators so that you can do recommendations across these or you can do actions to change an image or change a video across all of these. So very excited about the foundation that's being built here and how that then relates into everything I'm going to talk about when it comes to business professionals and consumers, creative professionals and creators. And also, all of this capability goes into everything Anil is going to talk about later today around marketers as well. All right. So let's start with business professionals and consumers. There are billions of them. That's a good thing. We're very excited that we have the opportunity to reach so many of them. As I've talked about their sales reps making presentations, their teachers, creating lessons, they're students doing homework and they're all turning to PDF as a standard for how they interchange these document formats. And they need a faster way to keep up with all the content that's coming to them and at them, right? And they all recognize that communication is becoming increasingly visual at the same time. So it's not just about being able to consume these documents, but it's also about being able to create documents more quickly and create them in a visual way that actually stands out. So instead of me talking about what these folks do, we had our studio team go out and talk to folks about both the consumption needs that they have and the creation needs and recognize that they're all the same individuals and business professionals and consumers, but they need both. So let's take a listen. [Presentation]

So a lot of what they talked about in the video really breaks down into 2 core elements, right? Faster time to insights with conversational consumption and fast and easy ways to create visual content. And Adobe is incredibly well positioned to go after this on the conversational consumption side given that we already have 650 monthly active users, over 3 trillion PDFs worldwide. And we have 400 billion PDFs opened in Acrobat every given year. Now well, we're -- that's why we're so excited about Acrobat AI Assistant. And our early success here has been great to see. We have conversational experiences, we're seeing real growth in the usage, and we're getting a lot of growth in volume and sort of virality as a result of all this. But here's the thing is that there's an enormous amount of visual documents that are opened each year in Acrobat too. There are tens of billions of moments where people in any given year open a document like marketing content or like a sales pitch or like a presentation or infographics or cover pages. And they're looking to actually participate and edit those kind of documents and those capabilities. And that's really what's given us this strong level of interest integrating Express into more deeply into Acrobat and Acrobat AI assistant workflows to meet the demands of the visual content that, that group is looking for. So with that as the backdrop, our strategy for business professionals and consumers is to continue the proliferation of Acrobat across desktop, web, mobile and voice, double down on the strong start we've already seen with Acrobat AI Assistant and the conversational experiences, establish Express as the de facto standard for visual communication and deeply integrate Acrobat and Express to create an end-to-end solution for business professionals and consumers all the way from consumption, all the way through creation. And that foundation really brings all the strengths of Adobe into one core motion to go and reach that audience. So let's walk through each of these really quickly. Let's start with Acrobat proliferation. Again, we talk about the 650 monthly active users that we have. The great thing here is it continues to grow. This is about a 23% increase year-over-year in terms of MAU and the strongest growth is coming from web and mobile. So we start to see, again, this next generation of professionals and consumers using these capabilities. You'll see us continue to invest very heavily in Acrobat partnerships like Microsoft Edge and Google with Chrome, Gmail, G Drive and a whole host of products, partnerships because we believe that foundation of proliferation is key. And you'll also start to see us atomize AI Assistant into third-party ecosystems because third-party ecosystems are flushed with PDFs and an opportunity for them to integrate generative AI capabilities and conversational experiences directly into those applications. So continue to really broaden this portfolio as we go forward. Now speaking of AI Assistant, it's been a game changer. We've talked about exactly how it's doing, but let's give a little bit more color here. It lets people have conversations with multiple documents. And where we've really shine is around the accuracy of our answers, the verifiability or the citations of those answers, and that's made the effectiveness of AI Assistant highly differentiated from everything else out there. Users are getting insights and completing tasks 4x faster than they would -- when they weren't using AI assistant. And so with that as a backup and the momentum we're starting to see there with the growth in terms of year-over-year usage and quarter-over-quarter usage, we're excited to take the next step forward to start to introduce agenetic and collaborative capabilities. So let's take a look at how this is going to make itself into Acrobat and AI Assistant in the months ahead. [Presentation]

So this is one of those legacy moments we'll talk more about for Acrobat as it goes through yet another evolution with these conversational experiences. But when it comes to AI-powered visual creation, we're really excited about the momentum that we're seeing with Express. We mentioned and we've talked a little bit about the great momentum that we're seeing with businesses. We saw year-over-year acceleration with businesses of all sizes. In fact, we onboarded almost 6 billion -- sorry, 6 billion -- 6,000 businesses last quarter, which we're very excited about because that continues to accelerate and we see more people come on board. And it's really a foundation of that global go-to-market that we have deep integration across Acrobat and the CC applications and GenStudio that really stands out. We even have a lot of enterprises now doubling down on their content supply chain with Express as well. We talked this morning about how Red Hat was able to using Express as part of their content supply chain, actually double the number of campaigns that they were launching at any given time. So it's been great to see the business success. But we're also seeing success at the younger portion of the market in K-12 and higher education, where we now have 85% growth with students who have access to Express going forward. And this is just as we're starting to ramp all of the broad-based marketing and awareness campaigns around Express that you know Adobe does incredibly well. This has led to over 1 billion projects created to date in Express. And we're excited about the agentic workflows that we're also going to be adding here that takes our customers beyond what we think of as the last era of creativity with templates and into a new AI forward era of creativity going forward for the masses. So let's take a look at what we're doing with agents in Express. [Presentation]

So you see there's a lot of Adobe history in that AI platform that we were talking about that we can leverage and bring directly into these interfaces through agentic experiences that every business professional and every consumer can use. But one of the things that we're most excited about is that the biggest opportunity here is when you take this incredible innovation that's in Express, the incredible innovation with AI in Acrobat and you bring them together. It's clear that users are telling us that they want to use these applications together all the way from consumption to creation. And we've been enabling that over the last year in 2 ways. One is by embedding Express in Acrobat and two is by increasing the number of workloads that you can go from Acrobat directly into Express. And as you can see from the stat, this is really starting to play out because this is what the audience wants. We've seen a 10x growth year-over-year in terms of Express MAU coming from Acrobat. And this is an area we're going to be really hitting hard in the course of this year. So let's see how all this comes together, and you'll start to see how natural these 2 products are when you bring them together. Let's watch this video. [Presentation]

And what's particularly interesting about that convergence is that, again, can you imagine a business professional or a student or a consumer that wouldn't benefit from that end-to-end workflow. And in many ways, this is really the journey we've been on for decades, right? Because we started PDF and Acrobat focused on document exchange. Then we evolved it to add editing and sharing and commenting and eventually, we started enabling it across web, mobile and desktop. So in many ways, that's what's led to the trillions of PDFs that have been created and why Acrobat has become the de facto standard for consumption. But the next chapter is incredibly clear in all our minds. It's really the convergence of Acrobat and Express that will provide users with an end-to-end solution, all the way from conception to visual creation because as we started the conversation with visual creation is a foundation of how we all engage today. And that's really what Acrobat is. It's a proliferation platform for bringing people more productivity and converging in this context, creativity and productivity. So in short, we're confident with our strategy around business professionals and consumers. We're going to do this by driving consumption in Acrobat and building on the momentum we already see in AI Assistant. And we're going to introduce workspaces and more customizable agents and collaboration to continue to drive and proliferate the usage of AI Assistant. We're going to drive visual creation in Express and move beyond templates with AI generations and designs. And we're going to give users what they're asking for, which is a combined experience to do everything they need in 1 platform from consumption all the way to creation. And we're confident also in terms of how we monetize this and the billions of users that are going to be using this because more users are coming through the freemium funnels that we have with Acrobat AI Assistant and Express, we're going to provide more value through tiered offerings that bring in these capabilities to professionals that need more of these capabilities and expand ARPU. And in the enterprise, we're going to be doing much more solutions for collaborative workspaces that can really be used to solve communication issues and opportunities within enterprises. So very excited about where we're going with business professionals and consumers. Let me turn for a minute and talk about creative professionals and creators before I hand it off to Anil. And this audience, as you know, has been a cornerstone for us, and it's really been part of our mission at Adobe around creativity for all for decades. It includes graphic designers and photographers and videographers social media influencers, gig workers and anyone who wants to create pixel perfect output to advance their company's needs or their personal needs. And they all understand that content is fueling the global economy. Creative professionals are hoping that AI can help them keep up with the demand that's coming in. Next-generation creators are hoping AI can help them stand out. And creative professionals and marketing pros are hoping that they can automate parts of their production processes in a way that they can actually scale and achieve that idea and that aspiration of personalization at scale. So let's hear directly from them in terms of the things that are on their mind. [Presentation]

We have so much opportunity, and this has been our bread and butter. We have so much opportunity to really help this group, in particular, including bringing all of those AI platform capabilities that we talked about directly into their tools. And this is going to let us drive obviously deeper and richer integration of GenAI into our core CC applications. It's going to let us build the most complete AI-first creativity solutions with Firefly application. It's going to let us attract new creators with freemium web and mobile applications, and it's going to enable us to develop creative production capabilities like Firefly Services and GenStudio that really power the foundation of content and creativity within enterprise environments as well. So that is our core of what we're trying to do. Now we're going to do this. We will start by building the most complete set of creative models with Firefly. We talked about that already. They're going to be toolable. In fact, they already are toolable. They're commercially safe. They're highly customizable. We have our core models, imaging, video, voice, vector, sound effects and 3D. And we -- as I mentioned today, we also announced this partnership with third-party models that are going to increasingly make their way into all of our capabilities and our platform. And so we're very excited about this. Shantanu mentioned that, but I do want to make sure I land the point that as we onboard third-party models, those models will effectively get monetized by getting on our rate card. So the cost of using a third-party model will be transparent to our users. The more they use Adobe models, the more they use third-party models, the more they mix all of these things, it just starts driving that flywheel of generative credit demand that we've been talking about for a couple of years. So we're very excited about where that could lead us. And of course, all of this innovation ultimately makes it into our CC applications. We talked about the fact that we have over 20 billion images generated to date. We have -- this is an interesting thing to see is that how impactful generative AI is, 75% of Photoshop MAU have used Firefly. And so you start to see how broad-based AI has become in the creative community as well. And we've seen a 2.5x increase year-over-year when it comes to generative credits consumed. And now as we start to add more, we've already seen this with the introduction of video model and voice models and third-party models, we should start to see this flywheel of generative credit consumption continuing to move more and more quickly. And all of this ultimately contributes to higher retention of our existing base. We see people who use AI staying products longer and also provides an opportunity to increase ARPU with new tiers and premium offers. And we're just getting started. If you look at the last couple of years and you look at the innovation that we have as we've integrated the tool, it's still accelerating in many ways. So the next frontier for us in addition to continuing to drive what we're doing with AI and Firefly in the applications is really starting to embed more agentic capabilities in our CC applications as well. So let's take a look at what shipping again in the next few months. [Presentation]

And the other thing these agentic capabilities do is, remember, they're all built on that core Adobe AI platform. It means we can not only surface them in our core creative tools, but we can also surface them in Express and Acrobat, we can also surface them directly in GenStudio. So there's a lot of power that's being unlocked through all of this. Now while we talk a lot about the generative capabilities in our CC applications, I do want to remind folks that there are a lot of non-generative AI capabilities that creative professionals also need. What you see on the slide are the things we've shipped over the last year. Red represents generative AI, everything else is not generative AI. So as we think about generative AI, let's just remember, there's a foundation of skill and capability that we have at the company that is continuing to chug along and really create highly differentiated opportunities for all of these folks in the creative professional space as well. Now in addition to integrating all of this work into our CC applications, GenAI also represents an opportunity for ideation and early production. And we recently launched the Firefly app with an incredibly comprehensive set of generative capabilities from images to videos to vectors to voice. And the reaction has been incredibly positive with high engagement on the video model and active use in the community. We've seen a lot of activity and excitement. And we have so much more coming in the next few months. We have Adobe MAX London planned for next month, definitely check that out, where you'll start to see more and more capabilities. What I wanted to show and highlight here is it's very easy for all of you to look at and say, "Look, I've got a model for imaging. I've got a model for video. I've got a model for design." But what the power of this stuff really is when you have all of those in 1 platform, where you can actually orchestrate across all of these. So now pay attention to this next clip, which is the capabilities we're working on. Again, in the next few months, you will see all of this come to market and the core aspect here is as we're embracing these capabilities, look at how you can use these models together to go from 1 image to a video and from a video to design, take a look. [Presentation]

That was Shantanu's idea, by the way, to add the purchase screen. He thought you guys might be interested in that. The -- I hope you watch the rest of the demo, too. But the core idea here is, again, when you have the ability to start with a sketch, then generate an image, then take that image and use it as a series of key frames to generate a video and then take that video and turn it into a 3D ecosystem, all in 1 platform, that's the power of what we've been doing. I think often, you look at an individual model and you compare it to another individual model, this ecosystem and this orchestration is really where the game is going to be, especially as we embrace and embed more third-party models directly in this ecosystem, too. It becomes the one place you can come to do all of that control regardless of the models you're using. Now what gets me even more excited than that is that you have to also take a step back and say it's not only about generative, it's about generative in the broader flow and as we've been doing more and more around web and mobile and building together an entire ecosystem of web and mobile offerings that start with freemium. You can then start to imagine with Photoshop and Lightroom and Express and Firefly with video coming soon, how you start to really blur these worlds of generative and precision. And so with that as the foundation, let's take a look at how all of these applications kind of work together. And again, these are all applications that are in market, and we're building these bridges in a way that I think we are uniquely capable of doing. And this is the Adobe secret sauce, just take a look. [Presentation]

And that's really the power of how all of these things eventually come together and really the power of web and mobile because in many ways, with the fact that we now have such a broad ecosystem of web and mobile applications, the migration and movement of assets and capabilities from one to the other becomes a lot easier than it's been in the past. So we're very excited about how all those flows can stitch together from a picture you take to an animated multimedia social post in a matter of minutes. I don't think anything like that's been done before. And I think our integrated ecosystem is going to make that seamless and easy for everyone to do. All right. Now last, but certainly not least, one of the things that we talked about this morning and for those of you who had a chance to see it, was really how all of this content creation and production can be scaled in a way that enterprises can benefit from it as well. And we talked about Firefly services and GenStudio as part of the underpinning for that. Firefly services is able to automate a lot of the tedious, time-consuming, expensive tasks that are happening in organizations. We talked about the fact that it's seeing great uptake. We talked about the fact that we see these run rate deals that are landing at about $250,000 and the fact that we have some companies that have come in with transformational investments and are spending millions of dollars on this as we go forward. What we see is a lot of value and ROI here that's incredibly clear. We talked about how we are seeing companies reduce production times by 70%, especially for those variations in the scaled assets. And so that sets us up incredibly well, I think, for the year ahead. And I'm not going to spend too much time on that because Anil is going to get into the details of this. So hopefully, you get a sense of really where we're going, not just with the business profession, but also now with Creative Pro and creators as well and how well established we are with Firefly and everything that we're doing as the foundation here, how we're bringing in third-party models. But I also do want to sort of end with a little bit of, I don't know, visual candy because the next generation of Firefly models that are coming out are going to blow your mind. And so if you think about we're about to release or we'll soon release image for -- we're going to -- we released our video model last month. We're about to release the next version of our video model already because we're able to do parallel development. So take a look at how our customers are saying that they're evolving their practices to embed Firefly and how they work every single day. [Presentation]

All right. So net all that out, the CC apps are going to continue to get better and better with GenAI, including agentic workflows. The Firefly app is going to become the one-stop shop for creative generative capabilities as we integrate more and more third-party models, as you see firefly continue to get better, and we create these incredible cross-media orchestration layers our growing family of web and mobile apps is going to be the most complete, most integrated set of capabilities across generative and across precision. And the Firefly Services and GenStudio is off to a great start with strong and measurable ROI. So we feel really good about where we're going and why we win. And then when it comes to monetization, we're going to drive new user acquisition with the family of freemium web and mobile applications. We're already starting to see that increase happening in terms of traffic, and we're starting to go through the process of conversion and monetization, just like we have over the last decades with Acrobat. We're delivering new value and premium tiers by integrating more generative capabilities into our CC applications and building Firefly applications and integrating that eventually into our CC applications through more tiering. And we're growing the One Adobe opportunities that we see in enterprises that brings all of this together. So with all of that, if you think about those 2 opportunity sets, that's a lot. So let me summarize. We see the market shift is creating a huge opportunity for creativity across business professionals and consumers, creative professionals and creators and marketers like Anil will talk about. There's going to be more content being created, and that drives more users that we can attract that drives more value that we can provide existing users and more value we can provide enterprises. Our product strategy and our global go-to-market footprint gives us a lot of confidence and we're already starting to see the momentum across the growth drivers as mobile traffic continues to spike for Adobe as generative credits is starting to show that growth and as value pricing is starting to ramp with Firefly Services. So thank you for the time. Anil, over to you.

Awesome. Thank you, David. Well, thank you all for attending Summit. It's been a great show, over 12,000 customers and partners in attendance. We have both over today and tomorrow. Today, we had James Quincey in conversation with Shantanu talking about creativity and marketing and AI and tomorrow we have Jamie Dimon and a number of other customer speakers. So we're really excited about the response we've been getting from our community. And we've had a tremendous amount of product announcements in innovation. David covered a number of those. I will talk about some in my -- the rest of my talk as well. But it's across the board. It's really about bringing together the creativity and marketing together into the area of content supply chain, which we are doing with GenStudio into all of the things that we're doing with unified customer experience across customer data and journeys and essentially being able to provide a complete solution for marketing professionals to take advantage of this era of AI. So Shantanu talked about the evolution of the creative opportunity. And for me, what's really exciting from an enterprise and from a marketing perspective is when you think of the creative and marketing and AI coming together, that's a virtuous cycle. If you think of all the -- all of our tools being able to -- being used to drive marketing campaigns, the customer data, the insights that our enterprise customers get from those tools. Now all of that data and insights is used in the creative tools to create more compelling content, more personalized content. That content then feeds into the next set of marketing campaigns and tools. And that's how you get personalized campaigns that you can have across the entire customer life cycle whether it's in customer acquisition, whether it's for engagement, for retention, for loyalty. That's the virtuous cycle that Adobe alone, we have a -- we have such a unique position to drive that virtuous cycle because we're combining creativity and marketing. And where AI comes in is being able to do that more personalized content. As Coca-Cola talked about this morning, when you think of personalized content, now you can personalize it specific to an individual and how you do it in the context of the campaigns that you're running is extremely important. That's where the judgment and the marketing strategy comes in. But the ability to do that with creativity and marketing and AI is a great virtuous cycle that I think Adobe is uniquely positioned to drive. If you look at the overall market opportunity across creativity and marketing, and we serve thousands of enterprises, both the creative professionals and the marketing professionals. Today, if you think of what the overall overarching demand is, it's about delivering personalized, connected across different channels, different touch points and compelling digital experiences across all these different channels. And that's easier said than done. In most companies, if you look at the -- just the marketing technology they have, they have tons of applications, lots of fragmentation, lots of manual work, lots of ad hoc processes that they need to bring together. Now you think of what they need to do to connect that all with the content creation tools and with the AI to take advantage of generative AI. It's a tall order for most companies, if they don't have a solution that really cuts across what they're trying to do and helps them deliver those kinds of personalized experiences at scale. And they are doing this in an environment where there is tremendous pressure on marketing spend. So the unique value that we provide Adobe is we have the scale, we have the portfolio that really cuts across the creativity and the marketing world, we really can cut across the -- what I'll call -- what we call the personalization at scale, but we are able to do that by helping them take cost out in this environment because they can consolidate some of the smaller players that they have or custom systems that they have built and the investments that they make in Adobe pay for themselves just through the cost reductions and then all the advantage that they get on top of what they are getting in terms of better ROI is really obviously the reason that they want to invest with us. So let's take a look at the video to hear about this just in the voice of the customers themselves. [Presentation]

So over the last couple of years, the Creative opportunity has been driving our enterprise growth and we actually see it in 2 places. One, on the left side, you see the Creative Cloud ending enterprise ARR, which is $2.2 billion for us at the end of last year. And then within the Experience Cloud subscription revenue, that same creative opportunity, that content opportunity has been a disproportionate driver of our growth with a CAGR of 16%, out of the $4.9 billion that you see in Digital Experience, Experience Cloud revenue, content was a 16% grower and driving a significant portion of that growth. What we've been able to do with the creative opportunity that we have is to really drive new category creation. We started with digital marketing, as Shantanu talked about with the acquisition of Omniture. We expanded that to customer experience management when we realize that digital marketing and the customer experience were converging, we drove that by enabling our customers to have the platform with the Adobe Experience Platform to drive content and data and journeys to deliver personalized experiences. The next level is the orchestration of these customer experiences, including the content supply chain to continue to drive content with generative AI. It's the unified customer experience and bring together the benefit of this agentic and generative AI technology. That is the future of the next category of Digital Experience and Creative Cloud together. So what is this customer experience orchestration? We believe that it really enables enterprises to combine creativity, marketing and agent AI to deliver personalized conversational digital experiences, compelling digital experiences in real time because they have to be able to do it across every channel, any touch point, and to be able to do it at global scale. And there's very few companies who can pull this together. This is what's going to differentiate every brand, whether they're a B2C brand or a B2B brand in terms of their customer experience and Adobe is uniquely positioned to bring this together. How we think of it? When you think of this customer experience orchestration, this is how we think of how customers can orchestrate to deliver these personalized experiences at scale. They have to bring the content, the data, the customer data and the customer journeys together. The content supply chain is through Adobe GenStudio is what helps them deliver that content. The unified customer experience built on the Adobe Experience platform brings together the customer data and the journeys and is closely integrated with the content. And all of that runs on what we just announced, which is the AEP Agent Orchestrator which we've built natively on the Adobe Experience platform. So it has the ability to orchestrate across all the tools that we provide as well as third-party tools and third-party ecosystems. So let me dive into content supply chain and Adobe GenStudio. Shantanu talked about the opportunity, and David talked about the aspects of the content supply chain all the way from content creation and production, workflow and collaboration through having a single asset management, being able to deliver and activate that across multiple channels and being able to use the analytics and the insights to better deliver the content. This is something that enterprise customers are really asking us to do because today, they have a patchwork of applications and systems, ad hoc processes working across their own teams, across agency partners, maybe freelancers. And it's a process that is highly inefficient and not fast enough for them. So we have the ability to transform the content supply chain by making it more efficient for them, more agile and be able to take the power of generative AI to make it personalized and compelling in terms of the content that they deliver. So that is the GenStudio solution that we talked about, built natively on the Adobe AI platform. So end-to-end AI-powered solution that brings together our best-in-class portfolio across creativity and marketing to power the content supply chain. So what's in the GenStudio application? 5 key building blocks that you see on the top, and we cover all of them with the portfolio of applications that we have across Adobe. We're bringing new modules for specific use cases for performance marketing, which is one of the big use cases that we see in a lot of companies, we built GenStudio for performance marketing, and we released it at MAX, and it's doing extraordinarily well. We're in the process of releasing new modules for GenStudio for creative production and for new use cases, potentially around social, retail media networks, connected TV and so on, all running on a common GenStudio foundation and powered by the Adobe AI platform. Firefly models that David talked about, customer experience models that we have built within AEP as well as third-party models that we're working with. The benefit of doing this for us is it really cuts across the entire solution that enterprises are looking for. And so what we are able to do is, for example, if they need fewer seats in terms of the creative applications that -- to deliver the content, they will actually need a lot more of the new technology that we have built around -- built on agentic AI or the generative AI models, and they will -- by bringing together the entire solution, we can provide value-based pricing, and we can provide value-based solutions to enterprise customers. The AI platform, the Adobe AI platform is at the heart of GenStudio. So we, today, announced a set of 10 purpose-built agents. Three of those agents are part of the Adobe GenStudio, the content production agent, the workflow optimization agent and the site optimization agent. And we've already seen huge traction in the generative AI capabilities that we have released over the course of the last 12 months. Within Adobe Experience Manager, which is our web content management flagship tool, we released something called generative variations, which were add-on last year. And quarter-over-quarter, we have seen a 40% growth in the number of interactions, which means the number of web pages that are generated using AI, generative AI, and a 20% growth in the increase in the number of customers quarter-over-quarter. And we see momentum for GenStudio across the ecosystem. We think of the ecosystem as obviously the customers, the enterprise customers, the brands that are using these products, or whether it's someone like Starbucks, for example, where we are powering the rebranding that they are doing with -- that you have seen in the Super Bowl, customers like Coca-Cola, obviously like that James talked about this morning. We're also working really closely with agency partners and SIs around the world. They see the need to transform the content supply chain. They see some of the gaps that exist today, and they are equally motivated to transform the content supply chain. And on the marketing and advertising side, there is tremendous interest to work with us, whether it's Meta or Google or LinkedIn or TikTok or Snap or others. We help create more content. More content means more ads. More ads means obviously means more revenue for them. So they are extremely motivated to work closely with us to drive Adobe GenStudio. So I've talked about the content supply chain to power personalization at scale. Now let me turn to the other parts, which is the customer data and journeys because those are equally important. And as I mentioned earlier, it's the ability to bring all 3 together that really positions us uniquely. So within that unified customer experience, we've again seen a tremendous amount of growth over the last few years because we've been -- we had the vision to invest in the Adobe Experience platform starting in 2018. We released it in 2019. And it was a platform that was really well designed to be cloud scale to provide a real-time view of -- to provide real-time activations and interactions. And it provided a complete view of the customer through the unified profiles. And as a result, we are the leading customer data platform in the market, and AEP is the leading data platform to support marketing journeys and customer experience. Again, we are innovating a lot to incorporate generative AI and agentic technologies in an open and extensible manner to power AEP and Apps. Today, as part of what we announced this morning, we have 7 purpose-built agents that we announced as part of the Adobe Experience Platform Agent Orchestrator. And these are all built and powered by the Adobe AI platform. We gave an example this morning of the audience agent, the audience agent, for example, computing audiences is an arduous task is a very manual task in most companies. So if you say I want an audience, for example, with this demographic who has exhibited this kind of behavior who have responded to these types of offers, getting that data alone is a very manual problem in most companies. And through this agentic technology, we now make it automatic for customers. And then we integrate that with our content tools so that you can build purpose-built content, compelling content for those specific audiences. Again, with the Adobe Experience Platform, we released the AEP AI assistant built on GenAI last year, and we've seen tremendous take-up because these make these kind of sophisticated tools very easy for marketers to use. We've seen a 30% quarter-over-quarter growth in number of customers and a 50% quarter-over-quarter growth in the number of interactions of the -- through the AEP AI assistant. And we have tremendous industry leadership at scale through the Adobe Experience Platform and the native apps. To give you a few examples, we have 43 billion customer profiles managed. One of the things that Shantanu always reminds us is there's only 7 billion people on the planet, how do you have 43 billion profiles. And that's because every customer's data is their own. We have them in specific instances, and we don't intermingle data. We don't sell anybody's data. We're not a data broker. So that's how we have the 43 billion profiles. We also have 76 billion profile activations, which means generating audiences and taking marketing activations on those profiles on a daily basis, 76 billion daily activations. And all of that happening in real time, typically a less than 100 millisecond response. So that if you go on to somebody's website or if you open a mobile app, you get an instant personalized experience through the Adobe Experience Platform. And that leadership has helped us with the growth, 50% growth in AEP and App subscription revenue year-over-year and a 30% growth in the number of customers we have on AEP and Apps year-over-year. So again, tremendous momentum across the ecosystem. And one of the key messages I want to leave you with is as we think of these agent AI technologies, all of the work that we are doing. It's really important to orchestrate across an ecosystem. The enterprise customers that we work with the likes of Coca-Cola or Starbucks or Marriott or Nike or others, they don't have just 1 vendor, obviously. They have complex architectures that they have invested in and built over time, including their own applications and third-party applications. And it is really important for them that a partner like Adobe really is able to plug into what they have and helps them take advantage of generative AI capabilities in the new agentic technologies. And that's why we work with all the leading independent software vendors, all the leading agencies and SIs to make that happen. And this morning when we talked about the AEP Agent Orchestrator, we highlighted partnerships with Microsoft and ServiceNow and SAP as we launch the AEP Agent Orchestrator. So when you think of these customers, it gives us a tremendous installed base, tremendous footprint and a great set of trusted relationships to really bring the full power of Adobe to them. So when we think of the enterprise go-to-market, we really actually think of it across all of Adobe. So when you think of all of our clouds, we bring them to our largest enterprise customers through one go-to-market motion. We're a trusted partner at the C level, typically, the CMOs, the Chief Customer Officers, the CIOs as well as to the CEO and CFO. We have over 250 accounts with $5 million of ARR of the 22,000 accounts that we talked about that we mentioned earlier, we've had over 100% growth year-over-year in joint deals of creativity and marketing and that is driven by the market demand where CMOs and CEOs see the need for delivering these personalized experiences at scale and see the need to bring the content and the data and the journeys together. But we have a lot of room to grow. We've already showed that we have over 1,500 customers with 5-plus of our products across the Creative Cloud and the Experience Cloud. But we have a long -- a lot of room to grow in the 2,000 base, and we'll keep expanding that through international expansion and greenfield and other motions. And the partner ecosystem is critical for us. I mean you will see if you go to the show floor today, all the leading partners, they're building their own solutions or solution capabilities to complement what we have and bring it to different verticals, bring it to different geographies, bring it to different use cases. So we are really thrilled to work with such an expansive partner ecosystem. We have presence across all the major verticals because we focus on that next-gen use case. For example, in financial services, it's the digital and mobile banking and self-service use cases. In media and entertainment, it's digital streaming and fan engagement. In travel and hospitality, where the new offering that we just announced called Brand Concierge is really taking off. It's because they're focused on customer engagement and loyalty and through a solution like the brand concierge, they can provide that personalized one-on-one experience to everybody in their customer base. A couple of examples that I wanted to highlight from that list that we've had this One Adobe motion, which has resulted in a lot of go-to-market success for us. A global restaurant chain where it was a total contract value of over $150 million. What they're really focused on is an increasing loyalty by driving deeper digital engagement along with people coming into their restaurants and making sure that they can connect those journeys and then acquire new high-value customers, especially through social and we provided a unified platform for them across the content supply chain with GenStudio as well as the unified customer experience with AEP and Apps, bringing together a solution to help them drive that. A major financial services company again last year, this was over $50 million of total contract value. They are focused on customer acquisition, acquisition of new cardholders and then an increasing share of wallet once they have the cardholders, making sure that an increasing share of wallet goes through their cards. And they wanted to standardize. They had a lot of tech debt, especially in their customer experience and marketing applications, and they wanted to standardize on 1 unified customer experience platform. And a global agency partner that we work with really double down on Firefly services and our entire GenAI offerings. Again, they wanted to standardize and accelerate content production. And for them, there are 2 things we were solving for because they've grown through acquisitions, they have a number of subagencies. They wanted to have a standardized workflow across their sub-agencies. But they also want to have a seamless workflow with the enterprise -- with the brands that they serve that makes it easier for them to deliver the work they do, but also to become the agency partner of choice with those brands and we're helping them with both of those use cases. So let me wrap up by -- talk about how we win. We think that the combination of creativity and marketing and AI that we're bringing is really unique in the market. Every Chief Marketing Officer, every Chief Customer Officer really wants this. The CFOs and CIOs also want it because it helps them rationalize their tech stack and help them use generative AI and agentic AI in a set of use cases that are really critical for them. And the CEOs are really interested in this because it helps them drive that next generation of customer experience and helps them differentiate their brands. And we have a set of unique capabilities and differentiators from our -- the entire comprehensive portfolio we have for customer experience orchestration to the umbrella GenStudio solution that we have for creativity and marketing coming together that we have across all of our clouds, the personalization at scale that we're able to deliver and drive with AEP and Apps, which is powered by the Adobe AI Platform. And the One Adobe, enterprise go-to-market presence and motion that we have to deliver all of these capabilities. So that's my wrap, and let me bring up Dan Durn.

Thanks, Anil. Hello, everyone. I want to bring the finance lens to what Shantanu, David and Anil teed up from a strategy perspective. As you look at Adobe's growth trajectory, we have a pervasive ecosystem. We're operating at scale. Our engine of innovation. It's operating at a faster pace today than it's ever been. We're driving 95% subscription revenues, which is nearly double from a decade ago, all while growing revenue by a factor of 5 and few companies have built this level of SaaS predictability. In short, we're incredibly well positioned to capitalize on the massive AI opportunity on the horizon. Arguably, the best positioned. And Adobe's industry-leading clouds, they've grown through strong product leadership and groundbreaking innovation and we've got a proven track record of executing our growth algorithm to drive results, new users, cross-sell, upsell and pricing, and we're doing it at scale. Our innovations, they're driving strong momentum across each business, and we can see it in user growth and value uplift in the stats. And as customer needs blur across businesses. That momentum is going to accelerate as we address that massive opportunity that sits at the intersection of creativity, and productivity and the intersection of creativity and marketing. And you can see the digital media momentum continues to be strong. Paid subscriptions, they're up 10% year-over-year and nearly 40% over the last 3 years. And it's a great showcase of the growth algorithm in action. New subscriptions continues to be the predominant driver of growth for the business. And the evolution of the creative opportunity, it's propelled Adobe's growth for years. And it's going to continue to drive growth in the years ahead. Creativity, it's become pervasive, pervasive across roles, pervasive across industries, pervasive across communication. And as you heard from Shantanu, Anil, David, our growth agenda is focused on 3 audiences: business professionals and consumers, creative professionals and creators, marketing professionals. And I want to share additional insights on how we're thinking about the business to provide a clear view of our execution against our growth strategy and also highlight the shifts we see in both customer needs and buying patterns. For business professionals and consumers, we're unlocking value at the intersection of creativity and productivity as visual content plays an increasingly vital role in digital communications. And we're delivering quick and easy AI-first consumption and creation capabilities that this audience needs and you see it in the innovation that we're driving in Acrobat and you see it in the innovation that we're driving in Express. And the Express opportunity. It's increasingly connected to and monetized through Acrobat, our freemium products, they facilitate a frictionless onboarding, our scaled distribution, it enables us to reach billions across desktop, web, mobile. In AI, it's driving a profound shift in creativity and marketing. And it's bringing these once distinct functions in the enterprise closer together. Our AI-powered solutions, they're increasingly generating the need for an integrated content life cycle. And it gives us the opportunity to monetize content creation and production in new ways that are customer value or outcome based. One Adobe deals, they're increasingly creating value for our customers. And it's the best way for us to drive growth in the years ahead. In addition, our unified enterprise go-to-market motion. It enables enhanced scale and efficiency for us at Adobe. And when we take routes to market and sales motions into consideration, we approach creative professionals and creators in a similar way to marketing professionals, especially in an enterprise context, so it makes sense to combine and report these 2 audiences as a single customer group. To recap at a high level, reporting insights, financial performance across our 2 customer groups, it's going to provide a clear view of Adobe's execution against our growth strategy and reflect the shifts we see in customer behavior. Business professionals and consumers who just want to get a task done. We're bringing scale distribution and creative power to bear at the intersection of creativity and productivity. And for creative professionals and creators and marketing professionals who these tools are their livelihood. Our solutions enable a more effective and efficient, integrated content life cycle and one that drives accretive business outcome for our customers. Each group leverages creativity different, one at the intersection of creativity and productivity, another at the intersection of creativity and marketing and the power of Adobe's platform, the power of Adobe's AI platform, it unlocks value for customers in each of these 2 intersections. And when you take a look at the business, a few things stand out. Creative and marketing professionals, they're the majority of the business. And when you look at both of these customer groups by route to market, you see the healthy mix of enterprise and digital and channel. We operate at scale greater than $20 billion of subscription revenue. We've got 750 million monthly active users in digital media with more than half of that in web and mobile, 22,000 enterprise customers. So let's double-click, let's take a look at business professionals and consumers. The opportunity, it's massive. We're growing 15% year-over-year. And we're pleased with the business momentum. You can see it in MAU growth. You can see it in usage, and you can see it in engagement. And we leverage our digital and channel routes to market to make customers successful through frictionless experiences. This is the power of a freemium model and product-led growth. We're acquiring new users by: one, proliferating Acrobat Express across every surface; two, executing the Adobe or executing the Acrobat playbook to scale Express; and three, international and enterprise expansion. But in addition to proliferation, it's also about increasing customer value. We're accelerating time to insights. We're boosting productivity. We're empowering business professionals to communicate more effectively by unlocking the combined power of Acrobat in Express. Acrobat, it's got a proven track record. Frictionless experiences have turned acquisition into engagement. As a result, 650 million monthly active users. And the impact of combining frictionless customer acquisition with viral product-led motion, the impact is phenomenal. Now we're running the same playbook with Acrobat AI Assistant and Express. Moving on to creative marketing and creative and marketing professionals, where we also have a massive opportunity, driving 10% year-over-year growth, and we're just getting started. We're seeing strength with creative and marketing professionals, and you can see it in usage and engagement. Customers, they're generating over 1 billion Firefly assets every month. And the magic happens in our applications that our customers know and love embedded into the creative workflows that define their day-to-day. We're driving growth in our seats-based business by, one, expanding creative applications like Photoshop, Lightroom to web and mobile, establishing the Firefly app as the most comprehensive destination for AI-driven ideation and creation; three, supporting third-party models. Four, infusing Firefly across the creative apps and continue to align pricing with the value we're delivering to our customers. Lastly, driving international expansion. And in the enterprise, you can see we're building momentum with our cross-cloud solutions. We saw 100% growth in joint creativity and marketing deals. And these One Adobe deals, they harness the power of creativity and marketing to more efficiently deliver personalized digital experiences. And we know how to deliver enterprise scale. We've been a trusted partner in the C-suite for decades. We've got a large customer base, growing partner network. Explosion of content, it's been a key driver of our enterprise success. We empower marketers to effectively deliver personalization by better understanding content performance, and we do it at scale. We've got more than 22,000 enterprise customers, 1,500 of them use more than 5 products. We've got a massive upsell and cross-sell opportunity. Taking a step back, AI monetization, our innovation, it's infused across the breadth of our products, and it's influencing billions of ARR. And you can see the impact. New users, more usage, better retention, more value. And that's only going to continue as AI becomes an increasing driver of Adobe's growth. The impact is also reflected in new AI-first products, and they've contributed greater than $125 million book of business exiting Q1, and we expect to double that in the next 3 quarters. So Adobe's expertise across creativity, productivity, customer experiences, combined with our industry-leading AI platform, scaled go-to-market motions and our exceptional brand, that makes for a winning combination. And our differentiated offerings unlock creativity and productivity for business professionals and consumers. Our unique approach to serving creative and marketing professionals delivers end-to-end solutions that redefine the content life cycle. Our innovation strategy, it's underpinned by a world-class financial profile, strong margins, strong cash flows, strong capital allocation with EPS outgrowing revenue. And the company is performing well. We're making good progress against our $25 billion share repurchase authorization. And we've got a strong point of view around the future growth of the company. And we're going to be -- continue to be consistent and opportunistic with our capital allocation. Given what I see today, we're likely to exhaust that 4-year authorization in only 3 years. So as we reflect on Adobe's journey, the momentum we're building, it's propelling us towards unprecedented opportunities in the years ahead. We're redefining what is possible in the global digital economy. Our foundation is strong. The path forward is clear, bring groundbreaking solutions to life for our customers and execute with excellence. Adobe's future, it's brighter than ever. With that, we'll get the team up, and we'll go to Q&A. Thank you.

All right. We'll get into the Q&A now. So I think we've got time for about half an hour of Q&A. So we'll just see how we go. I'll pick on a few of you folks that have got your hands up, and we'll pass the mics around to you. So let's just sort of bring it around to this sort of chap here with the beard. His arm was up first. I don't know your name, sorry.

And if you don't mind, just introducing yourself when you ask your question.

Absolutely.

I am the man with a beard, from KeyBanc Capital Markets. Yes, Jackson Ader. A couple of questions on AI monetization. Shantanu, I guess, if you think about where we are at $125 million in kind of the stand-alone direct, where -- you started with nothing a year ago or whatever, 15 months ago. Where did you expect the stand-alone AI to be maybe at this point? And then I have a quick follow-up.

We're actually really pleased with the performance. And again, just to make sure those are just brand-new products. If you take an independent start-up that starts off and builds a business from 0 to $125 million to $250 million, I think most people would say that's a pretty phenomenal performance. And I think you're going to continue to see. Firefly services, I would say, GenStudio, they have been doing really well. So in the enterprise stuff, we always have aspirations within the company. But I would say, in general, we're pretty pleased. And again, on the other part, let me again touch on that. When you talk about $3.5 billion approximately in influence revenue, again, just -- so we take the number of Creative Cloud people, we take what percentage of them are using GenAI, you can attribute what value AI is providing to them. Enterprise, I may not have touched on that. In the Enterprise, we have multiple offerings in the Enterprise. And so think of it as CC, ETLAs, Enterprise Term License Agreements. And in those Enterprise Term License Agreements, when we move them from one version to another version, with that version, the only difference is in AI and Firefly capabilities. That's in that $3.5 billion. I may not have touched on that earlier. So that was the sort of second part. Express, we put in the creative part, AI generated. You can argue, is that new? Is that influenced? So that's why I'm going back into that. But if you add all of that stuff together, and then again, as we said, the DX book of business and what we are doing with Acrobat. So really pleased. I mean, I don't know of other companies that are actually providing the kind of transparency that we are in terms of large companies and showing how it's influenced it. And the pricing, I mean, at some point, David also alluded to this, that when we have these higher tiered pricing, it's all because of the value of the AI functionality.

And then do you think you see or envision, I guess, a future with more partnerships on third-party models? Could you see a future where Adobe just says, you know what, like Firefly is going to have maybe a more narrow use case, and we're going to expand the AI -- the third-party models and let the third-party AI-specific companies really do a lot of the innovation and Firefly takes kind of a different route.

I'll start and then maybe David can add. First, we are not going to outsource what is our core IP. I mean that's the part to control what is happening. People talk about what's happening just with these video models or imaging models. To make that magic happen in Photoshop or Extend, Generative Extend in Premier. We didn't talk about sort of the adoption of Lightroom and what's happening with Generative Remove and Lightroom. All that happens because we know how to control these models. We also do recognize that models will have a personality. And so when models have a personality, in the ideation part of that, if you want to say, hey, let me try out a different model, great, you can try that out and supporting that is important. In the Enterprise case, we're already doing it because we have enterprise custom models. So we're going to continue to invest in the core IP for us, which is the models, the agents as well as the interfaces. But supporting these other third-party models, it only benefits the customer, which benefits us because it continues to make people use our interfaces. And that's true also in DX, where we're going to be doing that, so.

Yes. And we've always been -- and this is why I made such an emphasis on the orchestration and the workflows across these different media types and the toolability of the models in this context. We've always enabled people to work across these boundaries. We've also always had a belief that we want to give our customers ultimate choice. If they want to use A versus B, we want to let them make that decision. But we are also setting up an ecosystem where whatever happens, Adobe can win, right? If something amazing happens with a breakthrough in a model, we want to make sure our customers get that, and we want to make sure they get it through our tools, and we want to be the first to enable toolability. To Shantanu's point, though, there is a very big difference between creating a model that produces something beautiful and creating a model that's toolable. And we spend an inordinate amount of time making sure our models are toolable and are going to act with the personality that takes the desire of the individual as opposed to many models which have their own personalities that are so strong, they actually fight the Creative in terms of what they want to produce. So it's a mix of these things. And the last thing I will sort of always go back and emphasize, we continue to see a very strong demand from customers, especially enterprises in terms of how the models are trained and the provenance of the data that goes into it. So we will be the one-stop shop. If anyone wants any innovation that's happening in generative AI, come to Adobe, you'll have that choice.

Maybe I'll just add 30 seconds more on this, which is how do I think these models are going to emerge. So you are going to have some large language models. The behemoth companies are going to have their large language models, but they're not going to focus. I mean on their path to AGI. Creativity is maybe a side step along the way. It's not the focus of that. And so we're working with every one of them as well, but they are focused on a much larger problem that they have to solve, where the ability for them to do the models for the kind of stuff that we do is not going to be their primary focus. And then to your point, you have a whole bunch of other small models. It will be really interesting to see 3 years from now, 5 years from now, how many of them actually have the financial wherewithal to succeed and use VC money to keep investing in these models. Now we'll find out. But I think to David's point, we benefit either way.

Okay. That's great. Jay, let's go to you.

We don't have an AI methodology to...

What you spoke of today, this morning and just now this afternoon in terms of the multiple product integrations within and across the segments is, I would agree, the culmination of something you've been enabling and investing in for over a decade. The technology logic is clear. The use case or use cases logic is clear going all the way back to DPS as a first instance. The execution question, however, is at what point do you think you may have perhaps overcomplexified the portfolio such that you need to start thinking about new forms of packaging like GenStudio, but other things to accomplish packaging? And then relatedly, what more do you need to do in terms of your own internal sales orchestration, the word dujour, in terms of improving your go-to-market across all the various clouds and products and so forth?

I actually think, Jay, that this simplifies it. And let me walk through why I think it actually simplifies the core offering. We all knew that the core Creative Cloud was serving many different customers with the same price point, whether it was business professionals and consumers, what we used to call communicators, how an enterprise buys it and how the core creative professional, whom we keep saying, buys these products. And it was a one product that we had to sort of fit to many different. So I think if you walk away with the clear message that for business professionals and consumers, it's Acrobat and Express. And that's the core value and the core priority for that customer. For a Creative Pro or a next-generation Creative Pro, it's a CC app and it's Firefly. And for the enterprise, it's GenStudio and AEP and apps, and solving the content supply chain. So actually, I think from our perspective, it enables us to be really clear, where do you want distribution? Where do you want MAU, where do you want the ability to have a freemium model? And is that your great leading indicator? In the past, these were all a little bit more mixed as a result of the products serving multiple constituencies. And so even with models, going back to that, on the business professional and consumer, people really don't care about what the model is. They just want the thing to work, right? And so I actually think this simplifies it. I know it's a transition, much like the other transition that we did, Jay. But I think as you extend this, every enterprise customer, what do they want? They want GenStudio. They want GenStudio and apps. And yes, there may be a bill of materials. Every Creative Pro, we want them to have Firefly and CC. So I actually think it simplifies this and Acrobat and Express.

Yes. The only thing I would add is it's a really important question and just one that we spend a lot of time making sure that we don't let it overcomplicate. The important thing to note as you look at the portfolio and you see the things that we have, there are the core strategic end game -- endpoints that Shantanu talked about. And then there is value in having a proliferation of things that are onboarding vehicles, right? And so at the end of the day, it's -- as Shantanu said, it's -- each segment has 2 core things and other apps and other things that we develop are really all about casting as broaden that as we can to bring people along in the journey.

Brad Sills, Bank of America. Great session today, a lot of great innovation on display today. Question is on top of funnel, 650 million monthly active users for Document Acrobat and 100 million for Creative. It almost seems like given the size of the consumer end market, those 2 should be flipped. And so the question is really, what would it take to get the Creative to that level of scale? Is there something structurally different about that end market versus the Enterprise Document end market?

Yes, happy to take that. And the one that we're actually very excited about, we talked about how we're starting to see demand in mobile growing 60% year-over-year. Really, the way to think about it is that what we did with Acrobat 5, 6, 7 years ago was really embracing web and mobile very actively, very aggressively. And that is paying dividends now. If you look at the growth of Acrobat MAU as a whole, we're seeing a disproportionate amount of that growth actually coming in web and mobile, as you can imagine. We've also said in the past, we were slower than we would have liked to bring web and mobile to the creative world and our suite of applications. We now have that. We have Express. We have Photoshop web and mobile. We have Express web and mobile. We have Firefly web and mobile. We talked about video web and mobile coming soon. So that ecosystem is now getting all of the benefits and the learnings that we had from our data-driven operating model that we talked about before. But now we're starting to see that in the Creative ecosystem. So we are seeing that growth. We also, to Shantanu's point, by integrating these things more effectively for the audience, we get a lot more leverage from the success of one in ensuring that those audiences have access to and visibility into other things that are of value to them. So I think that there's a lot of upside in this as a whole.

And Brad, I think we were trying to be transparent on the 2 separate ones. We're sitting here a year from now successfully, we'll say, guess what, they're using both. So it's the same model. That's clearly the goal.

Let's stay with Brad.

Thanks for sticking on the Brad theme. This is Brad Zelnick, Deutsche Bank. And I don't think people realize what a flex it was Jay's reference to DPS. Jay, many people in the room probably wouldn't understand. But thanks again for having us. It's always a great day. I wanted to ask more about the $30 billion revenue target and how we get there. And I understand there's always going to be periods of investment disruption, proliferation versus monetization. So what would it take for us to see a reacceleration in the business, number one. And then number two, as we think about the 2 broad segments across -- and I'm still learning in getting this right because it's only a week old, but business and consumers versus creative and marketing pros, what -- how should we think about the mix of the 2 broad segments in getting there?

I'll start and then maybe, Dan, you can add. I mean, Brad, indirectly, you're saying, hey, give me a multiyear growth rate so that I can do the math from where I am right now in my $20 billion subscription to where we need to go. So that part, we sort of -- I get. I look at it and if I look at '24 firstly, I mean, clearly, I think as you look at '24, record Digital Media ARR, that would be the half full. The half empty, you would say is, wow, on the book of business is that deceleration, correct? So that's sort of -- if I had to factor that both in, that's the way I would look at it. I think we said, if you look at the high end of our targets this year in terms of what the range is, it's double-digit growth. And we said we want to aspire. So you can do the math. We're not going to give multiyear targets as it relates to that. But we look at both. And we just -- we did the TAMs last year. We're not TAM constrained by any stretch of the imagination, which is why we didn't update it right now. And I would say perhaps the last couple of years, getting the seeding strategy for the business professionals and consumers, which is how do you get with Express and Acrobat that ingrained so that you can start to accelerate that business. We feel good about that. And now is the time to execute against the monetization on that with the MAU as well as continue to seed. And on the enterprise side, between this creativity and marketing, how do you just continue to demonstrate that we are unique and separate. And so our aspirations are clear. I know I'm not giving you a, hey, here's our 3-year target and how we look at it. But we're not TAM constrained in any way, shape or form. But we will acknowledge that maybe there was this element of we didn't articulate the seeding of what was going on in terms of the lower end and the freemium. And so by giving you that numbers, hopefully, that gives you the confidence that, hey, they're focused on the right things by the customer group to accomplish the continued success that we have. So that's the way we think about it.

And just to build on that, just to touch, what causes that inflection? I think what we just went through today, what you saw on the main stage, building the foundation of that future growth. opening the aperture at the top of the funnel, seeding the strategy, bringing a structurally larger user base to bear on a consumer product like Express on the web and mobile ecosystem. As you think about deepening value in the funnel, as we talked about, what's going on with GenStudio, that end-to-end content flow that simultaneously drives top line progression and bottom line efficiencies for our customers. That foundation is going into place now. We've got to execute against that, but the pieces of that are going in real time, and I get really excited about what I see as I look forward.

Let's go to Saket here at the front.

Saket at Barclays. Maybe just to continue on that line of questioning around, Shantanu, what I thought was the most important comment just around that aspiration of continuing double-digit growth and the other part of that, which is faster EPS growth. So maybe just to build on it, if we zoom in just on the Digital Media part of the business, maybe for you, David, this isn't a mathematical question necessarily, but how do you think about the balance of that double-digit growth between price and volume, right, over sort of a multiyear period? Because we've said that price or value, I should say, is one of the levers. And then the other part of that question, Dan, maybe for you is growing EPS faster than revenue growth is great to see. How much of that do you kind of think about coming from margin versus, again, being opportunistic with the stock?

Yes. Great question. And our growth algorithm is, I think, fairly transparent. First, as Dan mentioned, the majority of our growth comes from new users, right? That is the engine of growth that's what drive the business. And I suspect that will be driving the business for many, many years to come. In addition to that, we also recognize that the value, and we've talked about this in the past, Saket, actually, I've talked to many of you in the past. Historically, we had a single offer that was doing double duty, right? The value of a product like Photoshop to a Creative Professional is fundamentally different than the value of a product like Photoshop to a hobbyist, right? And by stretching the lineup, as we've been talking about and really getting to the fruition of all that work over the last 2 years, we now start to be able to create levels and tiering that can really maximize both. User growth all the way down to free users, certainly getting that conversion methodology going. As Shantanu said, I think we're very happy with how we've seeded more new free users in the funnel. And now it's about the work that we did with Acrobat over the last 5 to 10 years, getting that conversion machine going and something we know how to do, but we're in the process of doing that. When it comes to pricing, that's really where I think the opportunity continues to be with the advent of the generative credit capabilities and with the new capabilities we have around new AI capabilities. That is really targeted at the Pro. You heard that video where all the Pros were starting to say, hey, look, I work completely differently in these tools than I used to work a few years ago. And that fundamental shift is continuing to happen, and we're seeing the growth in generative credits going. But we also learned something from the work we did with Acrobat AI Assistant, right? When we first launched these generative credits, we gave all the features for free as part of the core capabilities, and we started to charge if you needed more credits. With Acrobat, we did something different. We tiered based on usage, but we also tiered based on the features that were available, like AI Assistant, you had to pay for as an add-on capability. And so you'll start to see both of those things coming to the core Creative Cloud applications in the years ahead. And actually, certainly, we have a lot of opportunity in the near term, too. So you'll start to see the tiering. I think pricing is going to be a core part of the growth algorithm. I think the other thing is going to be new users. But the third thing, and I don't want to lose this is the work we're doing with Firefly Services and GenStudio. You'll see volume and generations for enterprises and output-based pricing also be a bigger part of the growth algorithm.

Saket, make no mistake, growth is the top priority imperative for the company. The one other thing I'll say after earnings, I know all of you folks said, hey, can you give us business professional and consumer as well as Creative and Marketing Professional subscription revenue and go back all the way. So hopefully, you caught those slides. We went back 4 quarters and sort of giving that forward. And you will see, as you look at the subscription revenue growth versus the overall company revenue growth, certainly, the subscription revenue growth is faster. So I mean, that's the other indication that you should give when you look at all the rest of the revenue that sort of represents that number directionally, is this headed in the right direction. So I just thought I'd highlight that as well.

Yes. And then from an EPS standpoint, you rightfully point out the 2 levers at play. You got margins and you've got capital allocation. As I think about capital allocation, we'll orient towards growing the business, strong flexible balance sheet. We've got a long history of returning excess cash to shareholders. So that's going to be a component. We're almost $11 billion in the prior 4 quarters of share repurchase, $3.25 billion in the most recent quarter. So you can see, in addition to being consistent, when opportunities present themselves, you'll see us step in and take a point of view on what we think the long-term intrinsic value of the company is. We're going to continue to do that. It all starts with being disciplined, focusing on the things that matter, drive strong margins and cash flow to feed that. So from a margin standpoint, that philosophy is alive and well. We talked about this investment cycle to support all of the tremendous innovation that you see unfolding and embedded into the product portfolio. And we talked about a mid-40s operating margin through that investment cycle. And I think it was 2 years ago at the Analyst Day, we talked about that, mid-40s. We've been doing a little better than that in the recent environment. And so we feel good about our execution against that target. Once we're through this investment cycle, I've got a strong point of view. The scale benefits of a structurally larger company need to benefit shareholders, and you'll start to see margin accretion off those levels once through the investment cycle. And so both will be contributing factors to that EPS that outgrows revenue in a consistent way.

I would also say, I think you focus so much on customer-based innovation here, the work that Gloria and Dan and others do in the company to make sure that we're using AI to put the cost in the right place, that's also an incredible effort. And if you're telling every customer, you're going to benefit from what AI is, we're certainly wanting to be customer 0 in that. So that effort also is definitely underway.

Keith.

Keith Weiss from Morgan Stanley. David, you talked about future innovation is going to knock our socks off. I would argue that the current innovations are pretty damn good. A lot of what you guys are doing is pretty amazing, right? And we're hearing it from customers, we're hearing it from partners. And I think that makes the $3.5 billion disclosure probably more appropriate than the $125 million, right? Because it really encapsulates what you're putting into the solution portfolio, what comes into GenStudio, which isn't net new. It's just bringing a lot of stuff together or stuff like generative fill and whatnot. But 2 questions on the back of that. Within that $3.5 billion, particularly if we look at 2024, price increases were a big part of that. So just to level set expectations, as we get into the back half of the year, we anniversary some of those price increases, is the -- is there enough momentum in the generative AI? Is there enough momentum in the new stuff to overcome that headwind from pricing or sort of the tough comp from pricing, number one? And number two, how do you think more broadly about pricing? Is there more room to sort of pull the lever on pricing, particularly now that you have the segmentation that you could really raise prices against the high-end customers and really protect your base at the low end?

Yes. That's exactly the strategy, Keith. And I think just to sort of double down on this idea of the stretch lineup. Again, I know we've talked about this for a couple of years. It's taken a while to get here where we have the lineup that we have. But it gives us a lot of flexibility going forward in terms of price to value mix. we see within our base, we see a really broad set of people adopting Firefly. We also see a distribution of how they're adopting Firefly. So we understand the impact and value that it has to different parts of their segmentation. So it gives us a lot of flexibility and freedom now to start to tier even Creative Cloud in ways that offer different capabilities. So for example, videos are incredibly generative credit consumptive, right? And so if there are video professionals that are using video capabilities, in fact, you saw the slide that showed really what the different pricing plans were. We have $199 price point per month out there for video pros that want to generate content without having to ever think about it or worry about it. And so we know that we have the opportunity, and we know that the value that our users are getting in different tiers are very much benefiting from the ability to provide those tiers. And you will start to see us we have -- I said this, I'll say it again, we have a lot of headroom given the value that we have already shipped and the value we're shipping to continue to create new price tiers that are consistent with the value we're providing.

Keith, I mean, your question as well as David's answer was on the value. If you look at the business today and you look at the business momentum, the core Creative Pro and commercial subscriptions for core Creative Pro is a strength for the business. On the business, professional and consumer, the MAU increase is a strength for the business. And in the Enterprise, the Creative and Marketing is a strength for the business. So I know you're saying, hey, what happens and all but I don't want you to walk away saying the core commercial subscribers and new acquisitions is not there. To your point, and David's point, with the value add, the ability to further price it with different tiers is better than it's ever been before. And that's part of the reason why Firefly is so exciting for us.

I had to go somewhere between Zelnick and Zukin. I just like saying that. In fact, I was working on Express, and I almost made a poster of Zelnick and Zukin. I thought it was just cool. Maybe I'll get it one day. So thanks for hosting us. Yes, creative, try to be creative. The high-end enterprise strategy, you're rock solid. You've got the Experience Cloud, you got AI. It looks like it's going to work really well at least from what I can tell. But I think the -- what we've not really talked about in great detail is the low end of the creative market where the perception and the risk exposure that Adobe has is greater than on the high end in the Enterprise. Those cycles move a little quicker than the enterprise cycles. Rarely has a technology company gotten a good handle on the enterprise market and the consumer market. Yet we're at this point where AI could be the great leveler. It could cause you to be successful in both markets. But it looks like just in the evolution, these markets are very, very -- becoming more and more different from each other. How do we get the assurance based on your assurance that you have what it takes to be equally adept? Is it AI that's the great leveler that brings that low end of the market back to the position that you would like to be in? Or is there something else? Because the pricing and packaging and the tiering is a set of techniques that Adobe has adopted very successfully. But it feels to me that, that is not what it is all about just, but there's something more innovative, potentially disruptive, lower price points, functionally different things that are happening in the low end of the market. How do you get a handle on that?

Yes. I mean I think one of the things...

I should just rephrase the question as, hey, tell us more about the business professional and consumer. And in that particular segment, what's your sort of core strategy?

I interpreted that. I think 2 things, Kash, to really sort of internalize first. First is that it is -- you're right, pricing, packaging, these things matter. But there's a core strength that we have that we're going to continue to lean on to use your words in the lower end of the market, which is the data-driven operating model. And I've said this a few times, I get a particularly good price on everything that Anil sells. And so we are not lacking for technology to really enable everything from tracking the journey to building more personalized content to activating more on social to doing all the work to bring the top of funnel and convert that top of funnel with all the analytics and those capabilities. So that is a core strength of the business, has always been. You wouldn't build a -- well over $10 billion B2C kind of business flow if you didn't have that core competency. Then on top of that, the thing that we now have that we haven't had historically, and this is a little bit of the point you're making in terms of maybe some of the things we missed. We didn't have the portfolio -- freemium portfolio of web and mobile that we have today. In fact, we didn't even have that portfolio a year ago in the broad scheme of thing. We had it in pockets. One big pocket was Acrobat, and we're seeing that massive benefit from that. So not only do we have the technology, but we have the history of actually actively driving that kind of broad-based proliferation. And now we have the products. So now we're going to layer that in. And there are 2 areas that we do that, right? One, as Shantanu said, business professional and consumer, 650 million monthly active users. You can imagine that's a lot more people that use our products in any given moment. 400 billion actions of opening a document every given year. You can imagine that's an amazing insertion point that we can use to introduce them to creativity and productivity and the convergence of that. And also, as we look at it with the rise of conversational. Conversational goes very fluidly from tell me something about this document to create an output I can share. So all of that really fundamentally changes the ability. So we have the core competency. We have the history of doing it. And now we have the products that we can mix into them.

We have one other success story that we don't talk about as much, which is Lightroom. So in addition to Acrobat, when we were like, hey, we need this on the surface and the web and mobile and freemium, that's seen incredible success. So I think the assertion that I would make is that who understands the creative and productive community better. And if in an AI-first world, that's going to change, who has the technology, the distribution and the applications to win in that market. And that's going to get further changed from, I would say, the template-driven approach, and that's where we like our chances.

Alex?

Alex Zukin from Wolfe Research. I don't know if I can follow Kash's question quite so eloquently. But I want to, Shantanu, maybe double down on that notion that you're talking about aspirational kind of double-digit growth. And specifically around GenStudio and the Digital Experience portfolio, what is the aspirational growth there? Because it seems like with the amount of innovation that you guys have been delivering really for the past few years, but also unlocking a seemingly massive consumption opportunity and API opportunity with all the models and the tooling of the models, which I thought was a really great point. Like what -- if you break down from the subsegments, what the aspirational opportunity differential is around that growth rate? Like what is it? Should the experience business grow faster than the media business for a prolonged period of time because now we're at that -- we're beyond the seeding stage and we're kind of into the monetization phase? Or help lay that out to us because you're -- while the glass half maybe empty question about the competitive narrative and the high end, the low end is at least pertinent in the media side, it seems like in the other part of the business, you guys should be dominating.

Well, I think the accelerations and then Anil should definitely add. I mean I think the accelerants in those businesses were phases. And to your point, I think the excitement around the third phase is greater than the other 2. And let me tell you what I mean by that. I think first phase was everything about just digital marketing, right? How do you get people to do a website? If you go back ironically and you look at the deck that Gloria prepared in 2009 when we talked about getting the content life cycle, it was all about saying the content life cycle, if we can connect the creative expression with the distribution and activation, that's going to be an unstoppable kind of thing. And so that was Phase 1, and we grew that well. I think Phase 2 was investing in this Adobe Experience platform because if you don't have that Adobe Experience platform, the 40 billion profiles, people don't understand how they're going to take all of that content personalization and make that happen. So I think both of those were really fundamental building blocks that it takes time when you build these platforms that will stand the test of time. I think to your point, AI is the accelerant that should make the need for that and the demand for that greater than it's ever been before. Because, I mean, James Quincey on Coke, he said, I would like the ability for my 2 billion drinks that I do every day to have a personalized piece of content on that. So we're as excited about both of those coming together right now and AI being sort of that enabler to accelerate that business. And exactly to your point, we have to go execute against that opportunity. But we -- I think it's all really come together with a compelling strategy. GenStudio for performance marketing. I was a little bit of the product manager, as Anil would say, on that and I'm so passionate about that because it actually finally brings together all these building blocks. You can provision and run GenStudio for performance marketing in a few hours. You can actually upload your campaign, you can provision it, you can run it in meta and all that. So I think that accelerant, enterprise sales doesn't have the accelerant unless you also have that viral need. And I would say we have the viral need right now, not only obvious, but enabled in terms of provisioning. Otherwise, Enterprise sales, to your point, I mean, you know this, tends to be the -- everybody wants the big deals, and we are like, no, we want -- in addition to that, the incredible viral adoption, let somebody use GenStudio in a minute. And if they can create that Firefly model and do content production in a minute, that's the sort of flywheel that we think we have. And I think AI has accelerated that. So that's why we're excited about these things coming together. And to your point, the Enterprise TAM should be larger. The value proposition should be clearer. And the family of products that Anil talked about again, we came out with GenStudio for performance marketing to help with your ad spend. We came up with content production to help with your variants. We're coming up with social and the other things on the road map that he talked about. That's a family with the acceleration of product innovation on that should also be faster than it's ever been before.

Brent.

Brent Thill with Jefferies. Anil, just when you look at that attach of customers that have over 5 products, I think it's like 7%. It's tiny. What is the unlock there? What helps? And then I have a quick one for Dan.

Yes. Just building on what Shantanu just said, one of the big things that we're seeing now is there is -- one is the virality exactly as we're getting like GenStudio and other tools into like the likes of AT&T and Lenovo and others. The other big thing that's happening is a recognition at the C level, the CMO, the CIO saying, hey, this needs to be an enterprise platform. Just like every other enterprise category, whether it's ERP or HCM or every other category. It first started with a whole bunch of small companies. There was a lot of VC investment in martech and so on and so forth. CMOs and people below the CMO made a lot of investments and so on. At some point in any enterprise category, there's enough scale and there's enough importance to the Enterprise that the companies take a step back up and the C level, they say, this needs to be one platform so that we can actually get the efficiency as well as we can get a clear platform to build on. Now with us, we talk about we're an $8 billion Enterprise business right now. And we have the scale, we have the innovation and the market presence. And I believe that's what's going to give us that acceleration.

And the just on capital allocation, everyone appreciates the buyback. But I mean, you've been in an M&A drought for 4 years. I think Frame.io, it was '21. Many have said, hey, are you going to play a role in consolidating AI, helping out.

You realize that.

Musk acquires a video AI come yesterday. What are your thoughts? And do you have any stronger conviction Google just stepped forward with a $30 billion deal today? What are your thoughts on that?

Do you want to take that?

Well, we're constantly looking, Brent. And if there are categories where we look at it. I mean, I would actually say big picture, the stuff that we're doing in the creators, next-generation creators and what we're doing around business professionals, I feel really good about our organic portfolio. There'll be stuff around the edges that we might add associated with this technology, but it feels really good in terms of the core technology that we have. I think on the marketing side, and then I'll have Anil and Dan perhaps add, there are other categories that are adjacent. And then again, we ask ourselves the question of, hey, can we accelerate with our organic growth faster because we, in general, like that? And what other AI stuff is out there that we feel I can accelerate beyond us. We haven't seen that much. I mean when we look at even what we have road map on the Agentic stuff. So yes, we will look. We want to continue to look. I mean it's a way that we've driven growth. But I actually feel really good about the stuff that we have right now to organically drive growth as well. So that's the way I would do it.

No, I think that's well said. And one of the impediments over the last couple of years, and it won't be a surprise to people in this room, when you think about the portfolio of private companies out there that are likely to never get public, but the valuation expectations on those portfolio of companies, tends to limit the surface area of companies that you can explore with. As I think the market begins to reset what that equilibrium is around valuation, I think there's an opportunity in those areas where it's accretive to the strategy of the company, and we want to accelerate a leadership position, you now can potentially have a larger surface area of companies to engage with. So there's a market context as well to this that's evolving as well.

Maybe I should have clarified as well just, Brent, I didn't know whether you were talking about the scale, right? So there's some. In other words -- okay, okay. Then we have an appetite across all businesses. So again, I didn't know what scale you were talking about as it related to that question. So I probably answered it with the sort of lens of scale that we had done in the -- that we had tried to do as opposed to the ones that we're really excited about in both businesses, where they are a bunch to your point. And I don't think those are going to be sustainable businesses as stand-alone companies.

I think we've got time for one more question. So I'll give it to Mark.

Mark Murphy with JPMorgan. So David, I can't help but notice you're speaking to credit consumption much more positively than I recall in the recent past. And it just makes me wonder what are you seeing with the Firefly video model, right, in this GA phase? Should we assume from your comments that these users, I think you said 90% of them are using it. Are they burning through the credits faster than they were with the Firefly image model? I think they're getting 2,000 credits on the standard plan. And if they are, where should we extrapolate this going forward? Because I think that would be happening with 5-second videos. It's not a very long video, and it's not full resolution. So can you maybe just let us know what are you seeing there? And is this going to open the door for plans? I think you have a $10 plan, you have a $30 a month plan. Is there something coming that can really surprise us on the video consumption?

Yes. Yes, it's a great question. And we -- by the way, we have a $10, $30, and we've introduced $200. And we obviously are looking at different tiers to the point of the conversation we had earlier around with Creative Cloud too. But the foundation of the energy and the excitement in this really comes from the fact that the model proliferation is getting much more ready for creative production. And so when you are generating an image, there's -- you can generate a number of images, you can do generative fill in Photoshop, but there's a certain inherent value to that generation that's very different when you get into video production. So let me give you a few examples. First of all, generating a video. We saw that you can generate a 5-second clip. Now are you generating that at 1080p, 720p, 540p or are you generating at 4K? We have 4K capabilities coming out. Even imaging -- even image generation, right? We have work going on with an ultra model because at some point, to get precise photorealistic human and organic composition, you need those models to be bigger and you need them to work harder for you. And that's not going to be the same number of equations. With video, are you trying to generate a 5-second video? Or are you trying to drag in a script and generate the entire script, right? And how do you start to really imagine orchestrating a 30-second ad spot that is built 100% with generative capabilities. And so those kinds of things are really turning the flywheel. This morning also, we showed -- and I'm really excited about this in Firefly services, we showed the ability to reform and reframe videos, right? So one of the most expensive parts of the content supply chain is to take a video and now you have to recut it for these different aspect ratios and frame sizes -- oh, and by the way, you've got voice, you've got video and you want to translate the voice, but keep the audio track and the music playing. You have these Mogrt, these basically animated overlays of text that come in and graphics that come in. How do you resize all of that stuff? Generative AI and what we do with now in Firefly Services does all of that for you, but it's more consumptive in terms of credit. So as these mature and as we hit this inflection point of all of these models coming in, we see a lot more consumption happening. And we're at the early stages of this, but we're very excited about what it could mean for us.

Since it's the last question, I wanted to again express my thanks before I handed it over to Steve for all of you who came today. We appreciate the engagement. I know I speak for all of Adobe when we say we're incredibly, incredibly excited about the innovation road map, the opportunity ahead of us. And I'm extremely proud of how the team has embraced AI, delivered this incredible innovation that you've seen today and continue to absolutely delight the customer groups that we serve. Thank you. And with that, I'll hand it back to you, Steve.

Yes. So thank you, everybody, for coming. That concludes the event, and we hope you enjoy the rest of Summit for those that are staying. Thank you.