Good day, welcome to the Q3 FY 2021 Adobe earnings conference call. Today's call is being recorded. At this time, I turn the conference over to Jonathan Vaas, VP of Investor Relations. Please go ahead. Good afternoon, and thank you for joining us. With me on the call today are Shantanu Narayen, Adobe's President and CEO, and John Murphy, Executive Vice President and CFO. On this call, which is being recorded, we will discuss Adobe's third quarter fiscal year 2021 financial results. You can find our Q3 press release as well as PDFs of our prepared remarks and financial results on Adobe's Investor Relations website. The information discussed in this call, including our financial targets and product plans, is as of today, September 21st, 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 factors discussed in today's press release and in 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. I will now turn the call over to Shantanu. Thanks, Jonathan. Good afternoon. I hope you're all staying safe and healthy. Adobe had another outstanding quarter as people across the globe continue to embrace new ways of storytelling, learning, and customer engagement in a digital-first environment. This quarter, we delivered significant new product innovations, announced the exciting acquisition of Frame.io, and continued to increase customer engagement across an ever-expanding customer base. We're executing on our strategy of unleashing creativity for all, accelerating document productivity, and powering digital businesses as reflected in our strong performance. In Q3, Adobe achieved $3.94 billion in revenue, representing 22% year-over-year growth. GAAP earnings per share for the quarter was $2.52, and non-GAAP earnings per share was $3.11. In Q3, we drove record performance in our Digital Media business, achieving $2.87 billion in revenue, representing 23% year-over-year growth. Net new Digital Media annualized recurring revenue, or ARR, was $455 million. Total Digital Media ARR exiting Q3 grew to $11.67 billion. Creativity has always played a central role in the human experience. Over the last year, we have all witnessed the way creativity has sustained us. We've shared photographs with loved ones on different continents, taught art classes to students at their kitchen tables, and launched entirely new businesses online. Building on decades of leadership, Adobe continues to pave the way in core creative categories, including photography and design, while pushing the boundaries across a wide range of emerging categories such as AR and 3D. Whether it's the latest binge-worthy streaming+ series, a social media video that sparks a movement, or a corporate video, creation and consumption of video is experiencing explosive growth. In August, we announced an agreement to acquire Frame.io, a leading cloud-based video collaboration platform. Video editing is rarely a solo activity, and it's traditionally been highly inefficient. Frame.io streamlines the video production process by enabling editors and key project stakeholders to seamlessly collaborate using cloud-first workflows. The combination of our leading video editing offerings, including Photoshop, Premiere Pro, and After Effects, with Frame.io's cloud-based review and approval functionality will radically accelerate the creative process and deliver an end-to-end video platform. The addition of Frame.io creates an opportunity for Adobe, in conjunction with the partner ecosystem, to expand beyond video editors to a broader set of customers, teams, and enterprises. We hope to close the Frame.io transaction in Q4 and look forward to welcoming the team to Adobe. Next month, we'll host Adobe MAX, the world's largest creativity conference. MAX has always been the place to be inspired, connect with the creative community, and experience the latest Creative Cloud innovations. Our programming will feature iconic speakers, including Oscar-winning writer, director, producer Chloé Zhao, actress Tilda Swinton, and SNL star and executive producer Kenan Thompson. This year's fully digital experience allows us to expand our reach and engage with more people across our global creative community than ever before. Adobe MAX will be hosted on Adobe's custom digital event platform, built on Adobe Experience Cloud. In Q3, we achieved creative revenue of $2.37 billion, with strong new user acquisition, engagement, and renewal across all creative products and geographies, with particular strength in our Creative Cloud for Teams offering. Q3 Creative Cloud highlights include innovative enhancements to our photography offerings, including new services and AI-driven capabilities in Lightroom. Creative Cloud applications now running natively on Apple's new silicon M1 chip, delivering a boost in performance. The release of Adobe Substance 3D Collection, a suite of interoperable tools and services that support 3D creativity. Partnerships such as The Great Untold with Netflix, enabling next-gen creators to tell their stories, and key customer wins at the Department of Education of the Philippines, Facebook, Nike, Rutgers University, and the U.S. Department of the Interior. Document Cloud is accelerating document productivity by powering the paper to digital revolution and enabling all document actions to be frictionless across web, desktop, and mobile. From complex legal documents to sales contracts to employee welcome kits, documents are at the core of work. Using the power of AI with Adobe Sensei, Document Cloud is automating workflows and adding new value across all document verbs. In Q3, Document Cloud achieved record revenue of $493 million, growing 31% year-over-year. Driving this performance was increased unit demand for Acrobat subscriptions globally and strength in the SMB segment. Q3 Document Cloud highlights include continued adoption of Adobe Sign and Acrobat, with transactions growing over 10x in the last three years. Growth across Acrobat Web and frictionless PDF, which optimize the customer journey and capture organic search-driven demand. Increased adoption and usage of mobile applications, including Acrobat, Scan, and Sign, with over 100 million monthly active users. Proliferation of Liquid Mode, an adaptive and responsive mobile experience with over 300 million PDF files reflowed in the last year. Key customer wins at Daimler AG, Fujifilm, Micron, and PwC. Businesses of every size across every category are investing in customer experience management. Adobe Experience Cloud is powering CXM for B2B and B2C companies, with applications focused on customer journey management, data insights and audiences, content and personalization, commerce, and marketing workflows. Adobe Experience Cloud empowers companies to deliver predictive, personalized, real-time digital experiences across every touchpoint of the customer life cycle. In the digital economy, companies are relying on digital presence and commerce as the dominant channels to drive business growth. According to the Adobe Digital Economy Index, U.S. consumers spent over $541 billion in e-commerce from January through August, 58% more than what we saw two years ago. In Q3, we delivered Experience Cloud revenue of $985 million, driven by strong performance across both subscription and professional services. Q3 subscription revenue was $864 million, representing 29% year-over-year growth. As businesses reopen around the world, interest in Adobe CXM solutions as an enterprise priority is resulting in increasing spend in both software and services. Q3 Experience Cloud highlights include product innovations, including new personalization capabilities in Adobe Experience Cloud to help customers move from third-party cookies to first-party data strategies. Workfront momentum, reflecting the need for workflow and collaboration to deliver global campaigns and growing customer interest in a pioneering marketing system of record. Key partnerships in commerce with Walmart to integrate their omnichannel fulfillment technologies, and with PayPal to offer a robust, secure, and integrated payment solution for companies of all sizes. Continued industry analyst recognition, including being recognized as a leader in the Forrester Wave: Digital Experience Platforms, and achieving the highest score of all participating vendors for current offering. Adobe was also named a leader in the 2021 Gartner Magic Quadrant for Personalization Engines and a leader in the Gartner Magic Quadrant for Digital Commerce. Strong customer adoption of Adobe Sensei-powered capabilities in Adobe Experience Cloud, as over 80% of customers now rely on our AI-powered capabilities to drive data insights and optimizations. Key customer wins at Accor, the Australian Government, Bertelsmann, Capital One, CVS Pharmacy, Daimler AG, Facebook, Ford Motor Company, Fidelity Brokerage Services, Honeywell, Real Madrid, and The Gap. Adobe's strength has always come from our most important asset, our people. I want to thank our 25,000+ employees for their dedication and resilience, our customers and partners for their trust as we continue to navigate a dynamic external environment. I'm proud of the continued industry recognition we receive as a great and equitable place to work. This quarter, Adobe received a 100% score on the Disability Equality Index for Best Places to Work for Disability Inclusion, and we were named to People magazine's Companies That Care list for the fifth consecutive year. Last week, we held our Adobe For All virtual conference, designed to bring employees together around our shared values of diversity, equity, and inclusion. As part of that event, we reaffirmed pay parity. We continue to pioneer opportunity parity to ensure that employees are offered equal career development and growth across all demographic groups. As part of our ongoing efforts to bring in more diverse talent, Adobe has established partnerships with Historically Black Colleges and Universities and Hispanic-Serving Institutions. This new program offers a million-dollar donation to schools, scholarships, internships, and career readiness programs. Our goal with these deep, focused partnerships is to provide opportunities for students to learn technology and creative skills. The health and safety of our employees remain our top priority. Our offices are slowly reopening to fully vaccinated employees on a voluntary basis. As we look ahead to the future of work at Adobe, we will remain hybrid and flexible and continue to do what's best for our employees and our business. I'm confident that Adobe's culture of innovation, category-defining products, strong brand, and the unwavering dedication of our employees will drive our continued business success and a strong close to the fiscal year. John? Thanks, Shantanu. Our financial results feature strong growth across revenue, Digital Media ARR, Digital Experience subscription revenue, RPO, and EPS, demonstrating the power of our category-defining offerings. In a digital-first world, Adobe's market opportunity is larger than ever, and we are investing for sustained growth through product innovation and by driving awareness and demand for our products with customers of all sizes. With our data-driven operating model, or DDOM, we continue to leverage our Experience Cloud technology to create personalized experiences for our customers in real time, driving traffic to adobe.com and app stores to acquire new customers. As a result, in Q3, Adobe achieved record revenue of $3.94 billion, which represents 22% year-over-year growth. Business and financial highlights included GAAP diluted earnings per share of $2.52, and non-GAAP diluted earnings per share of $3.11, Digital Media revenue of $2.87 billion, net new Digital Media ARR of $455 million, Digital Experience revenue of $985 million, cash flows from operations of $1.42 billion, RPO of $12.63 billion exiting the quarter, and repurchasing approximately 1.7 million shares of our stock during the quarter. In our Digital Media segment, we achieved 23% year-over-year growth in Q3, and we exited the quarter with $11.67 billion of Digital Media ARR. As anticipated, with regions beginning to reopen across the globe, we saw pronounced summer seasonality in Q3. This is consistent with the experience of businesses across industries, as evidenced by data from the Adobe Digital Economy Index, which showed that June and July marked the highest consumer travel season in two years. This correlated with lower web traffic while individuals enjoyed their summer holidays. We do see continued recovery in the SMB segment associated with the reopening. We achieved Creative revenue of $2.37 billion, which represents 21% year-over-year growth, and we added $348 million of net new Creative ARR. Our strong Q3 results demonstrate continued demand for our offerings and execution driven by our DDOM insights. Third quarter Creative growth drivers included strong engagement, retention, and renewal across all Creative products and customer segments, new user acquisition for Creative Cloud All Apps driven by global marketing campaigns, continued recovery in the SMB segment with our Creative Cloud for Teams offering, including through our reseller channel, driving subscriptions for our flagship products, including our photography and video applications on both desktop and mobile, and adoption of our 3D and immersive applications, including Adobe Substance. Adobe achieved Document Cloud revenue of $493 million, which represents 31% year-over-year growth, and we added $107 million of net new Document Cloud ARR in the quarter. Digital documents are essential to the changing nature of work, and we saw the paper to digital transformation continue in Q3 as Document Cloud remained our fastest-growing business. Third quarter Document Cloud growth drivers included adoption driven by the increased need to collaborate in a hybrid work environment, increasing unit demand for Acrobat subscriptions globally, strength in new licensing and renewal for our Acrobat for Teams offering in the SMB segment, and continued adoption of our Acrobat Web and Acrobat mobile offerings. Turning to our Digital Experience segment, in Q3, we achieved revenue of $985 million, which represents 26% year-over-year growth. Digital Experience subscription revenue was $864 million, representing 29% year-over-year growth. We continue to see subscription revenue acceleration in Digital Experience as large and mid-size enterprises increase their investments in customer experience management. Business performance in Digital Experience during the quarter was driven by strong deal volume, including several large Adobe Experience Platform deals, momentum in Adobe Commerce with strong revenue growth and new customer acquisition, Merchant Services growth through new strategic partnerships, increasing adoption of our Workfront and customer journey management offerings, strong customer retention as we focus relentlessly on value realization for our customers, and demand for Adobe's professional services. Operating expenses increased in Q3 as we continued to make strategic investments and increase headcount. We began to reopen our facilities and return to moderate levels of business travel. The majority of our employees continued to work from home while the return to business travel is expected to ramp slowly, and we expect to further ramp our hiring in Q4. From a quarter-over-quarter currency perspective, the impact of FX net of accounting for hedging activities caused a sequential currency increase to revenue of $10 million. From a year-over-year currency perspective, the impact of FX net of accounting for hedging activities caused a currency increase to revenue of $80 million. Adobe's effective tax rate in Q3 was 14.5% on a GAAP basis and 16% on a non-GAAP basis. The sequential reduction in our GAAP tax rate is primarily due to a decrease in US tax accrued on foreign earnings and tax benefits associated with share-based payments. Our trade DSO was 36 days, which compares to 37 days in the year-ago quarter and 35 days last quarter. RPO grew by 22% year-over-year to $12.63 billion exiting Q3, benefiting from strong enterprise licensing during the quarter. Our ending cash and short-term investment position exiting Q3 was $6.16 billion. Cash flows from operations in Q3 were $1.42 billion, sequentially down from Q2 due to increases in prepaid expenses, income tax payments, and a decrease in accrued expenses. We repurchased approximately 1.7 million shares in the quarter at a cost of $1 billion. We currently have $14.1 billion remaining of our $15 billion authority granted in December 2020, which goes through 2024. The following Q4 targets factor current macroeconomic conditions and typical year-end seasonal strength, including an expected increase in back-to-school spending and year-end enterprise licensing strength. Total Adobe revenue of approximately $4.07 billion. Digital Media segment revenue growth of approximately 20% year-over-year. Net new Digital Media ARR of approximately $550 million. Digital Experience segment revenue growth of approximately 22% year-over-year. Digital Experience subscription revenue growth of approximately 26% year-over-year. Tax rate of approximately 17% on a GAAP basis and 16% on a non-GAAP basis. Share count of approximately 480 million shares. GAAP earnings per share of approximately $2.52. Non-GAAP earnings per share of approximately $3.18. Given Adobe's year-to-date performance and our Q4 targets, we are clearly on track to exceed our updated annual targets for fiscal 2021 provided in March. With the massive opportunities across creativity, digital documents, and customer experience management, we continue to invest and drive strong business results. I will now turn the call over to the operator to take your questions. We'll take our first question from Alex Zukin with Wolfe Research. Please go ahead. Hey, guys. Thanks for taking the question. Can we double-click on the seasonality commentary in the quarter? If we look at the beat versus guidance on kind of net new Digital Media ARR, at the same time, you had kind of the weakest beat, the strongest guide in the last three years, which kind of speaks to and confirms some of those seasonality comments that you made. Can we just dive in to get a better sense of exactly what drove that for the Creative Cloud business? Separately, what you're seeing in the enterprise adoption, particularly around AEP and on the CDP front, that's driving some of the really strong guidance there. Happy to do that, Alex. First, on your DME question, as it related to the ARR. Overall, we were really pleased, and I think it really speaks to the strength of our DDOM and the insights that we get associated with the business. I think going into the quarter, we had expected that the consumer, with a little bit more return to normalcy, as was happening in the environment, now this may have been a little prior to the Delta variant, that we expected travel to increase and therefore as a result, as summer seasonality and summer holidays was really sort of a two-year time off from what they had to do. As expected, we saw a little bit of less web traffic on that particular front. The SMB was a highlight for us. The SMB, which was impacted a little bit more, we're continuing to see strengths associated with the SMB. To your point about the guide, I think our optimism and the relevance of our products and what's happening with digital as a tailwind really leads us to guide, as you pointed out, to $550, which would be the largest ever guide that we've given for a Q4. If you take a step back, relative to the approximately $1,750 ARR guide that we had given at the beginning of the year, or the $1.8 billion that we'd given in March, we're going to exceed easily all of those numbers. As it relates to individual categories, imaging continues to do really well. Video continues to do well. The Acrobat business, which is reflected both in the Creative Cloud and the Document Cloud, is doing well. MAX is going to be exciting. Net-net, I would say that the growth prospects for that particular business and the growth drivers remain intact, but again, very much in line, and this is what we feel good about the insights that we're getting on the business. That's to answer your question on DME. Remember, we have a seasonally strong quarter in Q4 for DME. The enterprise deals tend to be a Q4. We also see education start to ramp up in Q4. That hopefully gives you some color as to what happened in Q3 and what we expect in Q4. On the DX side, to your second question, really pleased with what we saw in the adoption of the Adobe Experience Platform and the applications on top of that, the Adobe Journey Optimizer, the Customer Journey Analytics, continue to see strength. I think we're very unique and differentiated in the platform that we have, the real-time nature of what we are doing with personalization. Again, there, I think if last year there was a lot of interest in that particular digital transformation and customer experience management, I think people recognize that this needs to be an enterprise spend priority for all of the businesses, irrespective of size, which is why both in terms of the Q3 performance as well as the Q4 targets, we continue to think that digital experience will also do well. Hopefully that gives you color on both, Alex. It does. Thanks a lot, Shantanu. We'll take our next question from Kirk Materne with Evercore ISI. Please go ahead. Yes. Thanks very much, and congrats on the quarter. Shantanu, I was wondering if you could expand a little bit more on a couple of the bigger Experience Platform wins that you had. Were these existing customers competitive? I guess if you had to step back, what's helping you all win these kind of larger deals? I was also impressed with 80% of your clients seem to be using some of the AI power capabilities, which seems to be a really high uptake rate or take rate. Was just kind of curious if you expand on some of those larger Experience Platform deals you had this quarter. Thanks. Sure, Kirk, at the end of the day, I think the macro trend that everybody is finding is that a digital presence in commerce and data and insights and analytics is absolutely sort of table stakes for anybody doing business. I think everybody started with a website, everybody started with the analytics, but I think where we've delivered the Adobe Experience Platform and what we are talking about, our personalization, I think that's a key differentiator. Whether you're a B2B company or a B2C company, you just have to invest in this particular business. I think the team's done a particularly good job both of messaging in different industries. The healthcare industry, for example, continues to do well, and there's more interest associated with that. The consumer businesses are starting to see a little bit of a comeback as there's a little bit more normalcy. A lot of them, we're going after existing customers, we're going after new logos and selling more. I would say it's the strength of the Experience Platform, the ability to have these profiles, the behavioral data that we're collecting in real time, the marketing message associated with telling them that they really need to focus on getting their first-party data to be an asset that they could put on their balance sheet, and the nature of what's happening with digital commerce. I think all of those are trends. We win the deals because of the strength of our offering and the fact that we're a really pure play marketing, that is significantly differentiated relative to anybody else. Thank you. We'll take our next question from Gregg Moskowitz with Mizuho. Please go ahead. Okay. Thank you very much for taking the question. Shantanu, I know that you only have three quarters of data thus far, but is Workfront driving larger average deal sizes in DX? Is that something that's already showing through? It's a great question, Gregg Moskowitz. Then maybe as I had responded to Kirk Materne as well, I should have talked about the big thing that we're hearing from our customers in that space, Gregg Moskowitz, is they have more and more campaigns. They want to do agility of the campaigns. These are global. How do they not only have an integrated suite of products, but how do they get the workflow to be more efficient? Especially as you're all working in a hybrid or working from home environment. Adobe Workfront is definitely helping us. It's helping us with existing customers. It's helping us with deal sizes. In many ways, it's the glue both to enable, if you have people, technology, and processes, it's helping with the processes part. The promise of what we've also said there in terms of this pioneering marketing system of record, that's another area for the interest. I think this was always a great company. I think they were looking to become more general purpose. I think what Anil and the team has done of really focusing on marketing workflows and solving it for all of the different personas, that's definitely resonating. All of the large deals that we do, Workfront's definitely a part of the interest and a part of the bill of materials associated with that. Very helpful. Thank you very much. Thanks, Gregg. We'll take our next question from Keith Weiss with Morgan Stanley. Please go ahead. Excellent. Thank you guys for taking the question, very nice quarter. Maybe digging in a little bit more on the M&A side of the equation. We've definitely heard really good things about Workfront getting into a lot of deals up front. Perhaps could you characterize sort of the performance of Workfront versus your expectations and kind of the contribution you're seeing in the quarter? Secondarily, with Frame.io, just for clarification, is that in the forward ARR guide? Is that included in the $550 for Q4? Perhaps more broadly, just on M&A strategy. The last two big deals seem to have a common thread in terms of collaboration. Is that just a sell-side analyst putting together two data points and drawing a trend line, or is that a particular area of focus for Adobe in terms of adding to the portfolio on a go-forward basis? Thank you, guys. Keith, I actually think there were 3 questions in that, so let me parse each 1 of them. First, I think as it relates to Workfront, we're very clearly targeting a need that exists. We had originally, I think, said something like Workfront will do $140 million or $150 million in revenue for FY 2021, and then I think we've said that it's on track to significantly beat that, and that continues to be the case. As we do these larger deals, Keith, we don't break out Workfront, and so that's the way we think about the business. Workfront is definitely appealing to that. Your second question as it relates to Frame.io, no, it is not in the ARR guide. Clearly, until we close the deal, we would not. When that happens, as we said, we expect that to happen in Q4, we'll certainly update you on what that happens as it relates to Frame. We're excited about that. Your third question as it relates to collaboration as a theme, it's part of what we've been talking about for a while. If you remember what we've done with XD, in terms of being able to do live editing, I think what we've done with the multi-surface applications where our applications run on mobile devices or iPads or tablets as well as desktops. It's just one of those themes that people are working from different locations, people are increasingly working with people. I think, we have the ability to really provide value for our existing customers and attract new customers. I think with Frame.io in particular, we're excited because it expands dramatically the potential of the number of people who will become participants in the video workflow. If they become, I hope you like the videos that we placed at the beginning of the earnings call. All of that stuff is being done remotely. So we're pleased. As you know, we're always thoughtful, Keith Weiss, about the acquisitions and making sure it's a case where we can bring significant value both to our shareholders and to our customers. Outstanding. Thanks for the color, guys. Thank you. We'll take our next question from Michael Turrin with Wells Fargo Securities. Please go ahead. Hey there. Good afternoon. Thanks for taking the question. On margin, the year-to-date margins are now above 46%. I think you previously referenced potential for more of a second half step down there. Just how should we think about the margin profile here, and are there benefits you'd point to that could normalize, assuming more of a return to normal? John, do you want to start and then I can add? Yeah, that'd be great. Yeah, you're right. The margin's at 46% this quarter. We had indicated that with the more of a reopening across different regions, we would start to see our facilities come online, our business travel come back, and certainly continue our hiring ramp. With the Delta variant, it probably slowed that down a little bit, that contributed to margin expansion you saw in Q3. Overall, it was an outstanding quarter for all of our businesses. What we've said is the long road, the path to margin expansion is really through revenue growth, given the leverage in our model. After the contributions from the revenue performance of the quarter, continued expense savings, as I just talked about, that contributed overall to the performance. We expect those expenses to come back in a phased reentry now, maybe a little slower than we originally thought when we talked about the second half. That being said, when I think about our original targets in December, it implied margin expansion. When we did our updated targets in Q1, it was even larger margin expansion from what we saw. We're executing against these huge margin opportunities, and we'll continue to do that with an eye on that continued top-line growth, such as the area that Shantanu touched on, which is 3D and immersive, Adobe Experience Platform, Sign, Stock, mobile, all of that. Well said, John. Maybe the only other thing I would add is that, certainly, I think when you look at some of the T&E or facilities expenses, it's a little artificial, in terms of what's happening on expenses. Our big position is when you have $100+ billion addressable market, I think driving profitable growth is where we are focused on, which is why I think John also referred to, we continue to be in the market to hire talent to make sure that we can continue to address all the market opportunities that we have. We're focused on driving profitable growth. Thank you. We'll take our next question from Jay Vleeschhouwer with Griffin Securities. Please go ahead. Yeah. Thank you. Good evening, Shantanu and John. Shantanu, for you first, as I'm sure you recall over the last number of years, particularly at a conference like MAX, we've talked about the integration, in many ways, the unique integration that you have between Digital Media and the DX business, and you'll recall it's gone by a certain acronym over time. The question is, can you quantify or in some way describe the business effect of that combination, even going back to the old DPS days of how this mutuality does in fact help you drive business through the integration across the two segments? Relatedly, with regard to DX specifically, you'll recall that over the last number of years, the company has often referred to your having about four dozen or so use cases that you were targeting, for DX, and that was a number of years ago. Perhaps you could talk about how the number of targeted use cases has increased for DX in the last number of years, particularly now with the introduction of Payment Services and other new capabilities. Sure, Jay. First, I think as it relates to your question around the integration between the clouds, as you know, first let's even talk about Acrobat, right? Because so much of the Acrobat business is reflected both in Creative Cloud and Document Cloud. That's one very tangible example of how we've integrated the clouds. I think taking a step back, the area that I would say is of the most interest to customers right now is what we have referred to in the past also as content velocity, which is people are creating more digital assets. They're spending more on content, and how they both ensure that all of that content seamlessly is distributed, whether it's a marketing campaign, whether it's something that goes on a mobile application, whether it's something that goes on the website. I think that's the hard problem that we've been able to help facilitate for our customers, which is creating all of this content and making sure that the delivery is accelerated through marketing campaigns, is an area of real integration between DME as well as DX. Where that shows up also in the revenue is the continued growth of AEM and AEM Assets specifically, because that's where the assets are really flowing between these two solutions. Hopefully that gives you a little bit of the flavor. I think to the earlier questions that Gregg and others and Kirk had asked, it also on the workflow, that's when people are looking at it and saying, "Wow, if my freelancers have created content, how is that now being reflected in the DX?" That's what I would answer your first question. I think as it relates to the DX use cases, we should certainly do an update, it's increased very dramatically. The ones that I would say maybe as highlight is the B2B use cases, the number of large B2B companies that are coming to us and saying, "Hey, we recognize that whether it's for lead generation, whether it's for identification of customers, whether it's for even doing commerce," that's been a fairly big driver. I would say regulated industries, which if the original push around customer experience management was B2C and consumer-based companies, now I think you're seeing way more of those workflows and use cases in regulated industries. That's another one that I would do. I would say the global aspect of this, which is you have companies, whether you're an automotive company or you're a fast food company and you want to do this globally, I think that's a use case that we've seen a fairly dramatic increase. Hopefully that gives you one. This is where the partner ecosystem, candidly, also is driving so much more. The partner ecosystem is also building a lot of their value-added solutions on top of our horizontal platform. Net, I would say, it doesn't matter what business you are, what size you are, part of DX is relevant to what you need to do in order to engage with your customers. Thank you very much. We'll take our next question from Saket Kalia with Barclays. Please go ahead. Okay, great. Hey, guys. Thanks for taking my question here. John, maybe for you, just to switch gears a bit. I was wondering if you could just talk about seasonality in the Document Cloud business specifically. I think the net new ARR there has historically sort of been up and to the right kind of through the year. I guess the question is, are we getting to a point in that business where the seasonality could start to look a little bit more like Creative, or are there any things to maybe consider for Document Cloud ARR seasonality this quarter? Yeah, I think when we think about the situation we've been in the pandemic and the need for more paper-to-digital transformation that's impacting not just enterprises and institutions that have obviously seen great growth in, but individuals as well as they're engaging with the services that they use. As we said, I think when you look at the individual offerings that we have across Creative Cloud and Document Cloud, we just saw a little bit lower web traffic there, but that's associated where we believe with individuals enjoying their holidays, and it's pretty indicative of using our own Adobe Digital Index data that shows that June and July were the highest travel months in two years. I think that seasonality is hitting it a little bit. Again, we've got such a strong presence in both institutions, educational, governments, and enterprises on Document Cloud that we still see great growth and strength. It's demonstrated in just the continued growth of that business, which is our fastest growing business right now. Very helpful. Thanks. You bet. Thanks, Saket. We'll take our next question from Ken Wong with Guggenheim Securities. Please go ahead. Great. Thank you for taking my question. This one's for you, Shantanu. You guys have a history of bringing your professional tools down to the consumers. You have light editions, you have mobile editions. I think in your prepared remarks, you mentioned the addition of Frame.io creating additional opportunities in sort of across the customer base, teams, and enterprises. I guess, do you envision this as a platform that could be brought down to consumers, prosumers, or is this still mainly going to be in that professional bucket? Ken, it's a very important area of expansion for us. I think Creative has always been a segment that looks to us to deliver mission-critical products that enable them to make a livelihood. The halo effect of that, when you look at what we talk about at our analyst meetings, and how big our Communicator business already is, as well as the outreach of that even into the consumer business. Stay tuned. On that front, I think as we talk about our product roadmap and the excitement that we have to fulfill this vision of Creativity for All and target a broader and broader set of customers with some great solutions using our artificial intelligence and Adobe Sensei technology. We have some very exciting things underway that will start to be served to customers. Very excited about that opportunity. It's a big opportunity. It's already a big business for us. When we talk about the fact that we're adding over $500 million of net new ARR as our expectation for Q4. A significant portion of that is also going to what you would call communicators or prosumers, and we're going to be delivering more and more really phenomenal products targeted at that customer segment. Got it. Fantastic. Looking forward to MAX. Thanks, guys. Thank you. We'll take our next question from Kash Rangan with Goldman Sachs. Please go ahead. Thank you very much. Congratulations, Shantanu and team, on a fantastic quarter. Shantanu, I remember, I think it was MAX 2019, we talked about video and how that could be as big of an opportunity as photos, and I'm curious to get your thoughts on the total available market that is new and incremental to Adobe's creative business as a result of the acquisition that you made of Frame. Particularly, you used the word dramatically expands the scope of what you can do, meaning collaborators in addition to content creators. Can you just talk about what you meant by that? If you could just put a finer point, does this mean that the creative TAM will be larger than what Wall Street thinks, which has always been the case for the past 10 years or so. Secondly, not that it's a negative, but with the seasonal pattern in summer showing some sign of activity where people went on vacations, et cetera? Is there at all any risk that digital transformation takes a bit of a back seat as we go shopping, not online, but we go to stores, therefore e-commerce activity might actually slow down a little bit. The secular trend is still pretty solid. In terms of an adjustment, are we in for some adjustment? Maybe not, but I just want to get your thoughts on that. Thank you so much. Thanks, Kash. As it relates to your first question around video, I think we've been signaling for a while that video is really one of the exciting expansion opportunities for us, and that's really played out. It's played out from the products that we've delivered, Premiere and After Effects continuing to be the leaders in that category. Certainly, Photoshop and Illustrator used a lot. If you look at what's happening with all these streaming+ services, right? There isn't a company that isn't delivering a streaming+ service. I think the insatiable demand for video among consumers is only requiring more and more companies to have these streaming services and deliver more genre, as it relates to video. All of that work right now, we talked a little bit of what we are doing as a partnership with Netflix as well. All of that is happening now, with people in different locations through a collaborative process. Anytime you can take a creative idea and make that happen quicker, faster to the right audience, that's only going to be incredibly valuable to our customers. I think that trend's only going to continue. We feel really good about what's happening in that particular space with video Frame. We used to use Frame a bunch in the production of our own videos, and it's been exciting as we've talked to different people who, after the acquisition of Frame, have come and said, "Hey, Adobe, that's such a great product, but we think we can do more with it." I think that gives us a lot of optimism around whether it's the scriptwriter, whether it's the reviewer of that, whether it's a creative agency, just being able to, or all the corporate videos that's being done. Certainly, I think as you add that as an enterprise product as well, you can certainly get a lot more TAM associated with it. We will update our TAMs, Kash, as we typically do. I think Jonathan referred or will talk about how we do our Q4 as well as our 2022, and we'll talk to you about TAMs on that front. Really excited about that. I think the external partnerships that exist for Frame and how it's plugged in, not just to the Adobe solutions, but other solutions, is also an area of strength. I think to your second question around shopping and online, when we look at our DX business and the success that we had in Q3, a big part of that is more and more companies are certainly doing the multi-channel, omnichannel, whatever they want to call it. I think that's only going to continue to be a driver of our digital experience solutions, because today that's table stakes. We just look at it and say, whether you're shopping in-store or whether you're shopping online, you need a solution that treats you like a customer that we know of. I think that's going to only be an imperative for companies. One thing we should have probably talked about also is if you look at our Q3 results, they were stronger than what we had said. There were a couple of non-recurring items as part of that, and some of that actually had to do with usage in commerce. We are seeing that usage also ramp up. I just wanted to get that also out there as we talk about the shopping online and shopping in a store. In terms of the demand for our DME solutions, we expect, as we said, the seasonal Q4 will be the strength. As education comes back and there's more and more end-of-quarter activity, not just within Adobe, but all companies, that's going to lead to increased demand and acceleration. Fantastic. Thank you so much. Thanks, Kash. We'll take our next question from Derrick Wood with Cowen and Company. Please go ahead. Oh, thanks for taking my question. John, I wanted to come back to the Document Cloud business, because it looks perhaps to me that there was some outsized strength from licensed products that may have been in lieu of revenue coming from ARR products. I think you can see this with total Document Cloud revenue growth actually accelerating even though total ARR growth decelerated. Is that the right assessment? Should we be looking at total revenue, not ARR? I guess if so, is there any reason for a mix shift towards more licensed products? As you look into Q4, given it's a big ELA quarter, should we expect that to continue? Yeah, no, certainly, I think you're going to see strength in ELA, as Shantanu Narayen and I spoke of in terms of Q4 because you see the expansion in Q3 as well. We're still migrating a base of customers as well, so ARR is still going to be important for us and where you want to drive more ARR. I think the strength in ARR growth, frankly, over a year really has been really impressive. It's always going to give us this opportunity to drive healthy subscription growth. ELA are not going to give us outsized revenue in Q4. It's going to be a sizable contribution, but we're driving subscriptions, and that's the strategy. We do still have customers that buy perpetual, so there'll be some fluctuations in that. Yeah, got it. Okay, thanks. You bet. We'll take our next question from Parker Lane with Stifel. Please go ahead. Yeah, hi. Thanks for taking my question. Shantanu, I was wondering if you could talk about the nature of creative wins in the public sector with organizations like the U.S. Department of the Interior. What have these type of organizations historically relied upon for creative needs, and how fully are they embracing the features of the Creative Cloud versus using maybe a particular application like Photoshop or a distinct set of applications? Thanks. To your point, I think public sector has always been an important part, I think it's just the amount of content that people are creating is increasing. When the amount of content that people are creating, content management becomes an important issue, workflow becomes an important issue, and standardization of the products. One of the things we did really well is what we called our named user deployment, and how when we have these enterprise licensing agreements, we offer enterprises the ability to download and distribute within the companies. The more we do training and evangelism of the products, that leads to adoption. I would say there's an element of standardization, there's an element of more content. Even if you're a public sector company right now, what you transact online is becoming dramatically greater than it's ever been because the physical presence is seeing a cutback as a result of what's happened in the pandemic. I think all of those are macro trends that are going to continue, but we've also done a really good job of actively making sure we evangelize what these solutions are good for. We do more training within these enterprises. We allow these named user deployments, as I said, which then leads to true-ups and the ability to get them into higher bands. I think the execution on the sales front associated with going into these enterprises, that's getting better and better. Great feedback. Thank you. Operator, we're coming up on the top of the hour. We have time for two more questions. Thanks. Thank you. We'll take our 2nd to last question from Brad Sills, Bank of America Securities. Great. Thanks, guys, for taking my question here. Just with your view across the broader marketing stack here with Adobe Experience Cloud, I'm curious what you're observing with regard to these Customer 360 initiatives. Are you finding customers are taking more of multi-product deals here to get that view across multiple channels here, e-commerce, marketing automation, CMS? You've got workflow automation in there. Are there any combinations of any of that that you're seeing trending more recently than in the past? Thank you so much. It clearly has been a push for us, Brad, in terms of what we are doing, which is how do we sell the entire suite offering. I think every year we give you an update on how that is actually indeed how we are selling it. From our perspective, the marketing stack, what's completely unique about us is the data and insights that we're getting, the ability to do commerce, and the digital presence. I think as it relates to Customer 360, where we're unique, and I think we're years ahead of any other large company that has space, is this real-time nature of what we've delivered. It's scalable. We've got billions of profiles. I think a lot of other companies are talking about how they take something that may be in a record somewhere and do things with it. For us, it's the activation of that data, and that's where I think most people are really excited about what Adobe has to offer. The other thing that I think has really happened is people recognize that they have to get control of their first-party data. I think a lot of interest used to exist about customer acquisition and third-party data. I think right now it's about do we have even control of our first-party data? Do we have control of our behavioral and what is happening on multiple channels? The fact that that can be very easily answered as it relates to what we have done with the Adobe Experience Platform. Last but not least, remember, we're the only company that can go in and say, "Hey, we have a B2B business and a B2C business." When we talk about how we are using this in terms of the playbook on adobe.com. I think that really opens up a lot of people's ideas as to how they can use this and utilize it. I think the playbook that we delivered for DDOM earlier this year and how we talk about what they can do, I think that really resonates with customers. That's great to hear. Thanks, Shantanu. Thank you. We'll take our final question from Brent Thill with Jefferies. Please go ahead. Shantanu, the DX growth accelerating from Q2, can you just walk through the drivers of what you're seeing in terms of that acceleration? Maybe for John, just as it relates to seasonality with Magento and commerce into Q4, anything to keep in mind there, or do you just feel like you keep powering through these tougher comps, given the tailwinds you're seeing in that business? Thanks. Yeah, Brent, I think what really drove that revenue was both subscription as well as the services. As you know, for the services, we're again, really reliant on a large partner ecosystem. If over the last 18 months, as we've always talked about, the interest is high, now they're all implementing it. As they continue to implement it and as they continue to say, "We need to invest in these solutions," I think that's driving it. I think to your point, if you take a step back, we, I think, guided to something like 19% revenue at the beginning of the year and 22% in subscriptions. We then increased that in March to 20% and 23% respectively, and we just posted 26% and 29%. If you look at it for Q4 as well, as you point out with the large comps, we continue to be excited about that opportunity. I think this is front and center, it's an enterprise priority, and I think since people are saying we've got to deal with this new reality, there's no time to waste in terms of implementing it. Again, there were, as we said, a couple of non-recurring items. Some of those had to do with usage in commerce, and that actually is also indicative. That may be a little bit more, depends on the quarter, but it's up and to the right as far as we are concerned in terms of the business opportunity and the business. Thank you. Brent, I'd say- No, go ahead. Sorry, John. I didn't hear you. Yeah, no problem. Just to kind of over the top on that and on Brent's question on seasonality related to commerce, of course, Q4 is a strong commerce quarter anyway, given the holiday spending time. Yeah, we're excited about the opportunity there as well. As Shantanu said, it's up and to the right. I think we have great momentum. Overall, since that was the last question, again, I think we were really pleased with our performance in Q3. We do expect a strong end of year for our business, as you saw from our targets. It's clear that we're in this unique position that we have three large growth opportunities ahead of us, and we're executing well against all three of those. The innovation and the roadmap that exists across all three of those clouds just gives us continued optimism that we will serve our customers well, and we feel fortunate. I think the future of work and the fact that it's more hybrid will only continue to emphasize digital as a priority for companies of every size. Whether that's an increase in content for personalization, whether that's more automation of digital documents, and whether that's every business saying we need to understand how to do customer experience management, I believe Adobe is very uniquely positioned to drive those particular macroeconomic trends. Thank you for joining us today. We look forward to MAX as well.