Adobe Inc.

Good day, and welcome to the Q1 FY25 Adobe Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Steve Day, SVP, DX, CFO, and Corporate Finance, Interim Head of IR. Please go ahead.

Good afternoon, and thank you for joining us. With me on the call today are Shantanu Narayan, Adobe's Chair and CEO, David Wadwani, President of Digital Media, Anil Chakravarty, President of Digital Experience, and Dan Dern, Executive Vice President and CFO. On this call, which is being recorded, we will discuss Adobe's first quarter fiscal year 2025 financial results. You can find our press release as well as PDFs of our prepared remarks and financial results on Adobe's Investor Relations website. The information discussed on this call, including our financial targets and product plans, is as of today, March 12th, and contains forward-looking statements that involve risk, uncertainty, and assumptions. Actual results may differ materially from those set forth in these statements. For more information on those risks, please review today's earnings release and Adobe's SEC filings. On this call, we will discuss GAAP and non-GAAP financial measures. Our reported results include gap growth rates as well as constant currency rates. During this presentation, Adobe's executives will refer to constant currency growth rates unless otherwise stated. Non-gap reconciliations are available in our earnings release and on Adobe's investor relations website. I will now turn the call over to Shantanu.

Thanks, Steve. Good afternoon and thank you for joining us. Adobe had a record first quarter. We achieved $5.71 billion in revenue in Q1, representing 11% year-over-year growth. Gap earnings per share for the quarter was $4.14, and non-gap earnings per share was $5.08, representing 13% year-over-year growth. Our performance reflects the ongoing critical role that Adobe products play in powering the global digital economy. In addition, given Q1 performance, we are pleased to reaffirm our fiscal 25 targets. Next week is Adobe Summit, our flagship digital experience conference, where we will unveil the latest innovations across our portfolio. In addition, we will host our annual investor meeting on March 18th, and we wanted to preview what we will share about our growth strategy. Adobe's success over the past decade has been driven by the exponential growth of the creative economy and the customer-focused innovations we've delivered across Creative Cloud, Document Cloud and Experience Cloud. Our groundbreaking solutions are empowering an ever-expanding universe of users to imagine, create and deliver standout content that drives exceptional experiences. Adobe's mission to change the world through personalized digital experiences is more critical than ever as digital continues to rapidly transform work, life, education, and entertainment. AI represents a generational opportunity to reimagine our technology platforms to serve an increasingly large and diverse customer universe. With creativity at the core, we have been evolving our offerings and routes to market to anticipate the distinct needs of creative professionals and next-generation creators, marketing professionals, agencies, and enterprises, and the broader set of consumers and business professionals. We believe this will drive continued growth and profitability. Creative professionals and creators need power and precision to bring their ideas to life across any media type. The next generation of creators want the flexibility of web and mobile tools in addition to the power of the desktop. They will benefit from the variety of AI models to ideate and explore creative possibilities. Adobe will serve this growing community with the most comprehensive set of web, mobile, and desktop applications delivered through various subscription tiers. In addition to Creative Cloud, we will offer new Firefly web app subscriptions that integrate and are an on-ramp for our web and mobile products. While Adobe's commercially safe Firefly models will be integral to this offering, we will support additional third-party models to be part of this creative process. The Firefly app will be the umbrella destination for new creative categories like ideation. We recently introduced and incorporated our new Firefly video model into this offering, adding to the already supported image, vector, and design models. In addition to monetizing standalone subscriptions for Firefly, we will introduce multiple creative cloud offerings that include Firefly tiering. Marketing professionals need to create an unprecedented volume of compelling content and optimize it to deliver personalized digital experiences across channels, including mobile applications, email, social media, and advertising platforms. They're looking for agility and self-service, as well as integrated workflows with their creative teams and agencies. To achieve this, enterprises require custom, commercially safe models, and agents tailored to address the inefficiencies of the content supply chain. With Adobe Gen Studio and Firefly services, Adobe is transforming how brands and their agency partners collaborate on marketing campaigns, unlocking new levels of creativity, personalization, and efficiency. The combination of the Adobe Experience platform and apps, and Adobe Gen Studio is the most comprehensive marketing platform to deliver on this vision. In addition to our direct sales force, we will leverage an ecosystem of partners and agencies to sell, implement, operate, and deliver business outcomes to companies of all sizes. We have accelerated One Adobe deals by increasingly integrating our creative and marketing products into a single enterprise solution. We will continue to invest in sales capacity to deliver Adobe-wide offerings across business, education, and government. Business professionals and consumers want ease of use across web and mobile through a freemium model. They're looking for quick and easy AI-first category-defining creative applications to help them stand out. While the need for creative expression continues to grow exponentially, the real value is in integrating creativity and productivity in an all-in-one solution. A combination of Express and Acrobat is Adobe's opportunity to make the journey from document creation to consumption smoother than ever. AI Assistant in Acrobat, Reader, and Express will accelerate the delivery of new conversational and agentic interfaces to add value to this combined offering. Revenue growth will be driven by distribution across web and mobile app stores, partnerships with major software providers, and focus on SMB and enterprise sales. Our generative AI innovation is infused across the breadth of our products, and its impact is influencing billions of ARR across acquisition, retention, and value expansion as customers benefit from these new capabilities. This strength is also reflected in our AI-first standalone and add-on products, such as Acrobat AI Assistant, Firefly App and Services, and Gen Studio for Performance Marketing, which have already contributed greater than 125 million book of business exiting Q1 fiscal 25, and we expect this AI book of business to double by the end of fiscal 25. In summary, by leveraging the breadth of our products and technology platforms in the era of AI, and delivering new tailored offerings and solutions by customer groups, we will drive the engine of growth for the next decade. We will win by focusing on business professionals and consumers and creative and marketing professionals with a unified product strategy and go-to-market. We will start to provide financial visibility in these two new groups starting this quarter and expand on this at our Investor Day at Summit next week. I'll now turn it over to David to discuss the momentum in our digital media business.