Adobe Inc.

Good afternoon and thank you for joining us. With me on the call today are Shantanu Narayan, Adobe's President and CEO, and John Murphy, Executive Vice President and CFO. On this call, we will discuss Adobe's second quarter fiscal year 2021 financial results.

By now, you should have a copy of the press release, which crossed the wire approximately one hour ago. We've also posted PDFs of our prepared remarks and financial results on Adobe's Investor Relations website. Before we get started, I want to emphasize that some of the information discussed in this call, including our financial targets and product plans, is based on information as of today, June 17th, and contains forward-looking statements that involve risk, uncertainty, and assumptions. Actual results may differ materially from those set forth in these statements. For a discussion of these risks, you should review the forward-looking statements disclosure in the press release we issued today, as well as Adobe's SEC filings. On this call, we will discuss GAAP and non-GAAP financial measures. Reconciliations between the two are available in our earnings release and on Adobe's Investor Relations website. Call participants are advised that the audio of this conference call is being webcast live and is also being recorded for playback purposes. An archive of the webcast will be made available on adobe.com for approximately 45 days. The call audio in the webcast may not be re-recorded or otherwise reproduced or distributed without Adobe's prior written permission. I will now turn the call over to Shantanu.

Thanks, Jonathan. Adobe had another outstanding quarter as the shift to a digital-first world continues to accelerate. From students to creative professionals to small businesses to the world's largest global enterprises, digital is transforming how we work, learn, and play. Adobe's mission to change the world through digital experiences has never been more relevant. Our strategy to unleash creativity for all, accelerate document productivity, And Power Digital Businesses is working. Fueled by our groundbreaking innovation, proven capability to create and lead categories, and our expansive global customer base, our opportunity and momentum has never been greater. In Q2, Adobe achieved $3.84 billion in revenue, representing 23% year-over-year growth. Gap earnings per share for the quarter was $2.32, and non-gap earnings per share was $3.03. In our digital media business, we drove strong revenue growth in Q2 in both Creative Cloud and Document Cloud, achieving 2.79 billion in revenue, representing 25% year-over-year growth. Net new digital media annualized recurring revenue, or ARR, was 518 million, And total digital media ARR exiting Q2 grew to 11.21 billion. Over the last year, we have seen the critical role creativity has played in the world. Creative Cloud is empowering everyone from the most demanding professional to the high school student to the next generation of social media creators to tell their stories. Adobe is the leader in core creative categories such as imaging, design, video, and illustration. And we're expanding our leadership in exciting new media types, including screen design and prototyping, 3D, and AR. In a world that requires anyone to be able to create from anywhere, we're building products and services for every surface and platform. Our vibrant, creative communities continue to be a tremendous source of inspiration And our goal remains to provide access to a larger and increasingly diverse set of creators and design teams, furthering our strategy of unleashing creativity for all. Q2 Creative Cloud performance was strong with net new Creative Cloud ARR of 405 million and revenue of 2.32 billion, representing 24% year-over-year growth. Q2 highlights include New product innovations, including updates to Lightroom, Photoshop, and Illustrator, that deliver enhanced creation and collaboration capabilities and greater speed and performance. Next week, we will unveil new innovations for Substance, our 3D solution designed to improve the creation process with new tools to help assemble, style, and sculpt. Increasing engagement and retention across offerings. including greater customer uptake of training, participation in community events, and continuous product enhancements derived from insights about customer usage and value. Momentum in our Creative Cloud teams offering globally, reinforcing the growth and adoption of Creative Cloud within small and medium businesses. Strong customer acquisition in core creative and emerging categories, especially photography and video, supported by exciting marketing campaigns globally for Photoshop and Premiere, and accelerating demand for 3D and I in key verticals such as gaming, automotive, fashion, and e-commerce. Continued growth of mobile traffic, leading to new customer acquisition of mobile offerings like Lightroom Mobile and Photoshop Express, and a strong funnel for desktop applications. Strong growth for Adobe Stock, with an increasingly robust content library and growing submissions that provide sustained earnings for our contributors. Global momentum with accelerated demand in EMEA and Asia Pacific. Key customer wins, including ByteDance, Netflix, Microsoft, and Unity. And new partnerships to inspire the next generation of creators, including one with Netflix that gives emerging creators access to tools, resources, and mentorship, to bring their stories to life, and another with Khan Academy, designed to provide teachers and students in underserved communities with access to digital tools and learning resources. In this digital-first business environment, seamless document workflows across every device and platform are more important than ever for the modern workforce to collaborate and be productive. Document Cloud is accelerating document productivity by powering the paper to digital transformation and enabling all document actions, including editing, sharing, scanning, and signing, to be frictionless across web, desktop, and mobile applications. We delivered strong Document Cloud revenue in Q2 with net new Document Cloud ARR of $113 million and outstanding revenue of $469 million, representing 30% year-over-year growth. Q2 highlights include new product innovations, including new features in Acrobat Liquid Mode that further improve accessibility on mobile devices, new Adobe Scan functionality that enables users to combine, save, and store scans more efficiently, and new sign capabilities in Acrobat to help small and medium-sized businesses improve their digital footprint with easily embeddable forms and digital payments. Strength in Acrobat across all routes to market and offerings with enterprise bookings growth up over 60% year-over-year. Accelerated demand for Sign with new Sign customers doubling year-over-year and an increasing share of Acrobat users leveraging Sign capabilities. Explosive growth in Acrobat Web Services driven by significant improvements in SEO for a new set of customers. In Q2, we drove 30 million visits to frictionless PDF pages and now offer capabilities for over 20 different document verbs. Continued growth of mobile traffic, including over 110 million mobile downloads of Adobe Scan, and 1 billion scans to date, and a greater than 20% year-over-year increase in Acrobat mobile app adoption. Momentum across all geographies with accelerated demand in Europe, Latin America, Australia, and New Zealand, and key customer wins, including ADP, AstraZeneca, GlaxoSmithKline, Toyota, and Wells Fargo. I'm thrilled to welcome back David Wadhwani, who has rejoined Adobe as Executive Vice President and Chief Business Officer of our digital media business. His impressive track record and passion for Adobe and our customers make him the ideal person to lead our digital media business through its next phase of growth. Digital transformation has become an imperative for businesses of every size in every industry. According to our recent Adobe Digital Economy Index, e-commerce spending is projected to be $4.2 trillion globally this year and reach $1 trillion in the U.S. alone in 2022. We predict that U.S. online spending on the upcoming Prime Day will surpass the $10.9 billion mark that Cyber Monday reached in 2020. Across both B2C and B2B, Companies around the globe are investing in digital to deliver personalized and engaging customer experiences. Experience Cloud is the most comprehensive solution for content and commerce, data insights and audiences, customer journeys, and marketing workflow. With unified customer profiles and an open and extensible architecture, Adobe Experience Platform is the clear platform of choice for enterprises to deliver real-time personalization at scale powering more than 17 trillion audience segment evaluations every day. Experience Cloud revenue was $938 million in Q2, representing 21% year-over-year growth, and subscription revenue was $817 million, representing 25% year-over-year growth. In April, we held our annual digital experience conference, Adobe Summit, virtually. We drove an unprecedented 20 million views of Summit content from individuals around the globe, underscoring the significant interest and demand for customer experience management. Highlights of product announcements include Adobe Journey Optimizer, which helps marketers optimize the customer journey across outbound and inbound customer touchpoints. Adobe Customer Journey Analytics, which enables brands to integrate and standardize their online and offline data and is years ahead of any competitive offering. The next generation of Adobe's real-time customer data platform to help brands optimize their acquisition and engagement strategies in a first-party data world. a preview of a pioneering marketing system of record built on work-front technology designed to manage complex marketing workflows for greater efficiency and agility, and new intelligent commerce capabilities and a strategic partnership with FedEx that'll allow every small and medium business to offer expedited shipping capabilities as part of their commerce platform. Beyond Summit, Q2 accomplishments include strength and core offerings, including explosive bookings growth for Adobe Experience Platform and associated services like Customer Journey Analytics and Real-Time CDP, which combined Blue Past, the 100 million book of business mark in Q2. Success with large multi-solution deals in transformational accounts and improving close rates across geographies, customer segments, and product pillars. Building the future workforce by offering college instructors and students globally free access. and Curriculum for Adobe Analytics, the industry-leading customer data analytics platform. Continued industry analyst recognition across all customer experience management segments, including being named a leader in the Forrester Wave for enterprise marketing software suites, achieving the top spot each of the five times the report has been published, and leadership in the Gartner Multichannel Marketing Hub's magic quadrant for the fourth year in a row, and key customer wins with brands like Nike, NatWest, NTT DOCOMO, and T-Mobile. We're proud of the tremendous results and momentum across our business. As we plan for a post-pandemic world, we will remain flexible as different regions recover at different times. While offices in Australia and parts of Asia have been open for some time, and conditions in the US and parts of Europe are improving, we will continue to support our employees in places like India and Brazil, where the situation remains challenging. Over the last year, we've been building a blueprint for the future of work at Adobe, which will be hybrid and flexible. In the U.S., we will be piloting a return to our San Jose office, starting with a small group of fully vaccinated employees in July. We're committed to leveraging the best of in-person and digital interactions to harness what makes Adobe special, our creativity, innovation, and culture, driven by our most important asset, people. I want to thank all of our employees for their dedication and resilience during a year that was not only marked by the pandemic, but by violence and racial injustice. I'm proud of the progress we have made in advancing our efforts around diversity, equity, and inclusion. We've made strides in our strategy to accelerate the representation, growth, and advancement of the Black community. But as Juneteenth approaches later this week, we know we have so much left to do. As we celebrate Pride Month in June, we're honoring and spotlighting our LGBTQ plus communities, both inside and outside of Adobe. These efforts represent Adobe's longstanding commitment to supporting our diverse employee base and making an impact in the communities where we live and work. A principle our co-founders John Warnock and Chuck Geschke instilled in us. In Q2, we lost our beloved co-founder, Chuck Dieschke. Chuck left an indelible mark on Adobe, the technology industry, and the world. While we miss him tremendously, it gives me great comfort knowing that Chuck was so proud of the company that Adobe has become. Adobe's strong culture, revered brand, innovative product roadmap, and the world's best employees, customers, and partners position us for continued success in 2021 and beyond. John?