Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-15175

ADOBE INC.

(Exact name of registrant as specified in its charter)

________________________________


Delaware			77-0019522
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

345 Park Avenue, San Jose, California 95110-2704

(Address of principal executive offices and zip code)

(408) 536-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	ADBE	NASDAQ

________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of September 20, 2024, 440.2 million shares of the registrant’s common stock, $0.0001 par value per share, were issued and outstanding.

ADOBE INC.

FORM 10-Q

TABLE OF CONTENTS


		Page No.
PART I—FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements:	3
	Condensed Consolidated Balance Sheets August 3 0 , 2024 and December 1, 2023	3
	Condensed Consolidated Statements of Income Three and Nin e Months Ended August 3 0 , 2024 and September 1 , 2023	4
	Condensed Consolidated Statements of Comprehensive Income Three and Nine Months Ended A ugust 3 0 , 2024 and September 1 , 2023	5
	Condensed Consolidated Statements of Stockholders’ Equity Three and Nine Months Ended August 30 , 2024 and September 1 , 2023	6
	Condensed Consolidated Statements of Cash Flows Nine Months Ended August 3 0 , 2024 and September 1 , 2023	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 4.	Controls and Procedures	39

PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52

Item 5.	Other Information	52
Item 6.	Exhibits	53
Signature		54
Summary of Trademarks		55

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ADOBE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except par value)


	August 30, 2024		December 1, 2023
	(Unaudited)		(*)
ASSETS
Current assets:
Cash and cash equivalents	$	7,193	$	7,141
Short-term investments	322		701
Trade receivables, net of allowances for doubtful accounts of $17 and $16, respectively	1,802		2,224
Prepaid expenses and other current assets	1,399		1,018
Total current assets	10,716		11,084
Property and equipment, net	1,969		2,030
Operating lease right-of-use assets, net	368		358
Goodwill	12,814		12,805
Other intangibles, net	858		1,088
Deferred income taxes	1,548		1,191
Other assets	1,557		1,223
Total assets	$	29,830	$	29,779

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade payables	$	318	$	314
Accrued expenses	1,848		1,942
Debt	1,499		—
Deferred revenue	5,779		5,837
Income taxes payable	130		85
Operating lease liabilities	70		73
Total current liabilities	9,644		8,251
Long-term liabilities:
Debt	4,128		3,634
Deferred revenue	127		113
Income taxes payable	585		514

Operating lease liabilities	381		373
Other liabilities	420		376
Total liabilities	15,285		13,261
Stockholders’ equity:
Preferred stock, $0.0001 par value; 2 shares authorized; none issued	—		—
Common stock, $0.0001 par value; 900 shares authorized; 601 shares issued; 445 and 455 shares outstanding, respectively	—		—
Additional paid-in capital	13,026		11,586
Retained earnings	36,911		33,346
Accumulated other comprehensive income (loss)	(309)		(285)
Treasury stock, at cost (156 and 146 shares, respectively)	(35,083)		(28,129)
Total stockholders’ equity	14,545		16,518
Total liabilities and stockholders’ equity	$	29,830	$	29,779

_________________________________________

(*) The condensed consolidated balance sheet as of December 1, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

See accompanying notes to condensed consolidated financial statements.

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ADOBE INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)


	Three Months Ended				Nine Months Ended
	August 30, 2024		September 1, 2023		August 30, 2024		September 1, 2023
Revenue:
Subscription	$	5,180	$	4,631	$	15,156	$	13,521
Product	82		96		305		346
Services and other	146		163		438		494
Total revenue	5,408		4,890		15,899		14,361
Cost of revenue:
Subscription	413		447		1,324		1,317
Product	6		7		19		23
Services and other	135		126		399		380
Total cost of revenue	554		580		1,742		1,720
Gross profit	4,854		4,310		14,157		12,641
Operating expenses:
Research and development	1,022		881		2,945		2,584
Sales and marketing	1,431		1,337		4,228		3,983
General and administrative	366		353		1,073		1,041

Acquisition termination fee	—		—		1,000		—
Amortization of intangibles	43		42		127		126
Total operating expenses	2,862		2,613		9,373		7,734
Operating income	1,992		1,697		4,784		4,907
Non-operating income (expense):
Interest expense	(51)		(27)		(119)		(85)
Investment gains (losses), net	12		6		34		12
Other income (expense), net	89		67		241		157
Total non-operating income (expense), net	50		46		156		84
Income before income taxes	2,042		1,743		4,940		4,991
Provision for income taxes	358		340		1,063		1,046
Net income	$	1,684	$	1,403	$	3,877	$	3,945
Basic net income per share	$	3.78	$	3.07	$	8.63	$	8.62
Shares used to compute basic net income per share	445		456		449		458
Diluted net income per share	$	3.76	$	3.05	$	8.58	$	8.59
Shares used to compute diluted net income per share	448		459		452		459

See accompanying notes to condensed consolidated financial statements.

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ADOBE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)


	Three Months Ended				Nine Months Ended
	August 30, 2024		September 1, 2023		August 30, 2024		September 1, 2023

	Increase/(Decrease)				Increase/(Decrease)
Net income	$	1,684	$	1,403	$	3,877	$	3,945
Other comprehensive income (loss), net of taxes:
Available-for-sale securities:
Unrealized gains / losses on available-for-sale securities	3		5		10		19
Reclassification adjustment for recognized gains / losses on available-for-sale securities	—		—		—		5
Net increase (decrease) from available-for-sale securities	3		5		10		24
Derivatives designated as hedging instruments:
Unrealized gains / losses on derivative instruments	(60)		8		(59)		—
Reclassification adjustment for realized gains / losses on derivative instruments	1		(4)		9		(28)
Net increase (decrease) from derivatives designated as hedging instruments	(59)		4		(50)		(28)
Foreign currency translation adjustments	23		3		16		12
Other comprehensive income (loss), net of taxes	(33)		12		(24)		8
Total comprehensive income, net of taxes	$	1,651	$	1,415	$	3,853	$	3,953

See accompanying notes to condensed consolidated financial statements.

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ADOBE INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)

(Unaudited)


	Three Months Ended August 30, 2024
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
	Shares	Amount								Shares	Amount		Total
Balances at May 31, 2024	601	$	—	$	12,504	$	35,227	$	(276)	(152)	$	(32,612)	$	14,843
Net income	—	—		—		1,684		—		—	—		1,684
Other comprehensive income (loss), net of taxes	—	—		—		—		(33)		—	—		(33)
Re-issuance of treasury stock under stock compensation plans	—	—		48		—		—		1	48		96
Repurchases of common stock	—	—		—		—		—		(5)	(2,519)		(2,519)

Stock-based compensation	—	—		474		—		—		—	—		474

Balances at August 30, 2024	601	$	—	$	13,026	$	36,911	$	(309)	(156)	$	(35,083)	$	14,545


	Three Months Ended September 1, 2023
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
	Shares	Amount								Shares	Amount		Total
Balances at June 2, 2023	601	$	—	$	10,717	$	30,609	$	(297)	(145)	$	(26,191)	$	14,838
Net income	—	—		—		1,403		—		—	—		1,403
Other comprehensive income (loss), net of taxes	—	—		—		—		12		—	—		12
Re-issuance of treasury stock under stock compensation plans	—	—		36		—		—		2	48		84
Repurchases of common stock	—	—		—		—		—		(2)	(1,003)		(1,003)

Stock-based compensation	—	—		442		—		—		—	—		442

Balances at September 1, 2023	601	$	—	$	11,195	$	32,012	$	(285)	(145)	$	(27,146)	$	15,776

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ADOBE INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions)

(Unaudited)


	Nine Months Ended August 30, 2024
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
	Shares	Amount								Shares	Amount		Total
Balances at December 1, 2023	601	$	—	$	11,586	$	33,346	$	(285)	(146)	$	(28,129)	$	16,518
Net income	—	—		—		3,877		—		—	—		3,877
Other comprehensive income (loss), net of taxes	—	—		—		—		(24)		—	—		(24)
Re-issuance of treasury stock under stock compensation plans	—	—		48		(312)		—		3	100		(164)
Repurchases of common stock	—	—		—		—		—		(13)	(7,053)		(7,053)

Stock-based compensation	—	—		1,392		—		—		—	—		1,392
Value of shares in deferred compensation plan	—	—		—		—		—		—	(1)		(1)
Balances at August 30, 2024	601	$	—	$	13,026	$	36,911	$	(309)	(156)	$	(35,083)	$	14,545


	Nine Months Ended September 1, 2023
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
	Shares	Amount								Shares	Amount		Total
Balances at December 2, 2022	601	$	—	$	9,868	$	28,319	$	(293)	(139)	$	(23,843)	$	14,051
Net income	—	—		—		3,945		—		—	—		3,945
Other comprehensive income (loss), net of taxes	—	—		—		—		8		—	—		8
Re-issuance of treasury stock under stock compensation plans	—	—		36		(252)		—		4	103		(113)
Repurchases of common stock	—	—		—		—		—		(10)	(3,407)		(3,407)

Stock-based compensation	—	—		1,291		—		—		—	—		1,291
Value of shares in deferred compensation plan	—	—		—		—		—		—	1		1
Balances at September 1, 2023	601	$	—	$	11,195	$	32,012	$	(285)	(145)	$	(27,146)	$	15,776

See accompanying notes to condensed consolidated financial statements.

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ADOBE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Nine Months Ended
	August 30, 2024		September 1, 2023
Cash flows from operating activities:
Net income	$	3,877	$	3,945
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	639		650
Stock-based compensation	1,392		1,291
Reduction of operating lease right-of-use assets	56		54
Deferred income taxes	(341)		(276)
Unrealized losses (gains) on investments, net	(24)		(7)
Other non-cash items	9		—
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:
Trade receivables, net	414		217
Prepaid expenses and other assets	(799)		(787)
Trade payables	2		(47)
Accrued expenses and other liabilities	(162)		(153)
Income taxes payable	116		749
Deferred revenue	(44)		69
Net cash provided by operating activities	5,135		5,705
Cash flows from investing activities:

Maturities of short-term investments	379		754
Proceeds from sales of short-term investments	9		215

Purchases of property and equipment	(135)		(313)
Purchases of long-term investments, intangibles and other assets	(125)		(34)
Proceeds from sale of long-term investments and other assets	2		1
Net cash provided by investing activities	130		623
Cash flows from financing activities:
Repurchases of common stock	(7,000)		(3,400)
Proceeds from re-issuance of treasury stock	361		314
Taxes paid related to net share settlement of equity awards	(525)		(387)
Proceeds from issuance of debt	1,997		—
Repayment of debt	—		(500)
Other financing activities, net	(56)		8

Net cash used for financing activities	(5,223)		(3,965)
Effect of foreign currency exchange rates on cash and cash equivalents	10		2
Net change in cash and cash equivalents	52		2,365
Cash and cash equivalents at beginning of period	7,141		4,236
Cash and cash equivalents at end of period	$	7,193	$	6,601
Supplemental disclosures:
Cash paid for income taxes, net of refunds	$	1,389	$	590
Cash paid for interest	$	94	$	103

See accompanying notes to condensed consolidated financial statements.

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ADOBE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 1, 2023 on file with the SEC (our “Annual Report”).

Use of Estimates

In preparing the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, we must make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ materially from these estimates.

Significant Accounting Policies

There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report.

Recent Accounting Pronouncements Not Yet Effective

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The updated standard is effective for our annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026. Early adoption is permitted. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes, which prescribes standardized categories and disaggregation of information in the reconciliation of provision for income taxes, requires disclosure of disaggregated income taxes paid, and modifies other income tax-related disclosure requirements. The updated standard is effective for us beginning with our fiscal year 2026 annual reporting period. Early adoption is permitted. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures.

With the exception of the new standards discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the nine months ended August 30, 2024, as compared to the recent accounting pronouncements described in our Annual Report, that are of significance or potential significance to us.

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ADOBE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 2. REVENUE

Segment Information

Our segment results for the three months ended August 30, 2024 and September 1, 2023 were as follows:


(dollars in millions)	Digital Media			Digital Experience			Publishing and Advertising			Total
Three months ended August 30, 2024
Revenue	$	3,995		$	1,354		$	59		$	5,408
Cost of revenue	137			395			22			554
Gross profit	$	3,858		$	959		$	37		$	4,854
Gross profit as a percentage of revenue	97		%	71		%	63		%	90		%
Three months ended September 1, 2023
Revenue	$	3,594		$	1,229		$	67		$	4,890
Cost of revenue	161			397			22			580
Gross profit	$	3,433		$	832		$	45		$	4,310
Gross profit as a percentage of revenue	96		%	68		%	67		%	88		%

Our segment results for the nine months ended August 30, 2024 and September 1, 2023 were as follows:


(dollars in millions)	Digital Media			Digital Experience			Publishing and Advertising			Total
Nine months ended August 30, 2024
Revenue	$	11,719		$	3,970		$	210		$	15,899
Cost of revenue	489			1,187			66			1,742
Gross profit	$	11,230		$	2,783		$	144		$	14,157
Gross profit as a percentage of revenue	96		%	70		%	69		%	89		%
Nine months ended September 1, 2023
Revenue	$	10,500		$	3,627		$	234		$	14,361
Cost of revenue	455			1,200			65			1,720
Gross profit	$	10,045		$	2,427		$	169		$	12,641
Gross profit as a percentage of revenue	96		%	67		%	72		%	88		%

Revenue by geographic area for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Americas	$	3,241	$	2,943	$	9,539	$	8,601
EMEA	1,405		1,229		4,085		3,615
APAC	762		718		2,275		2,145
Total	$	5,408	$	4,890	$	15,899	$	14,361

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ADOBE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Revenue by major offerings in our Digital Media reportable segment for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Creative Cloud	$	3,188	$	2,909	$	9,380	$	8,522
Document Cloud	807		685		2,339		1,978
Total Digital Media revenue	$	3,995	$	3,594	$	11,719	$	10,500

Subscription revenue by segment for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Digital Media	$	3,921	$	3,506	$	11,474	$	10,225
Digital Experience	1,231		1,096		3,599		3,208
Publishing and Advertising	28		29		83		88
Total subscription revenue	$	5,180	$	4,631	$	15,156	$	13,521

Contract Balances

A receivable is recorded when an unconditional right to invoice and receive payment exists, such that only the passage of time is required before payment of consideration is due. Included in trade receivables on the condensed consolidated balance sheets are unbilled receivable balances which have not yet been invoiced, and are typically related to license revenue or services which are delivered prior to invoicing. As of August 30, 2024, the balance of trade receivables, net of allowances for doubtful accounts, was $1.80 billion, inclusive of unbilled receivables of $83 million. As of December 1, 2023, the balance of trade receivables, net of allowances for doubtful accounts, was $2.22 billion, inclusive of unbilled receivables of $80 million.

We maintain an allowance for doubtful accounts which reflects our best estimate of potentially uncollectible trade receivables and is based on both specific and general reserves. We maintain general reserves on a collective basis by considering factors such as historical experience, credit-worthiness, the age of the trade receivable balances, current economic conditions and a reasonable and supportable forecast of future economic conditions. The allowance for doubtful accounts was $17 million and $16 million as of August 30, 2024 and December 1, 2023, respectively.

A contract asset is recognized when a conditional right to consideration exists and transfer of control has occurred. Contract assets are included in prepaid expenses and other current assets for the current portion and other assets for the long-term portion on the condensed consolidated balance sheets. We regularly review contract asset balances for impairment, considering factors such as historical experience, credit-worthiness, age of the balance, current economic conditions and a reasonable and supportable forecast of future economic conditions. Contract asset impairments were not material for the nine months ended August 30, 2024. Contract assets were $214 million and $141 million as of August 30, 2024 and December 1, 2023, respectively.

Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription services, including non-cancellable and non-refundable committed funds and refundable customer deposits. Deferred revenue is recognized as revenue when transfer of control to customers has occurred. As of August 30, 2024, the balance of deferred revenue was $5.91 billion, which includes $44 million of refundable customer deposits. Arrangements with some of our enterprise customers with non-cancellable and non-refundable committed funds provide options to either renew monthly on-premise term-based licenses or use some or all funds to purchase other Adobe products or services. Non-cancellable and non-refundable committed funds related to these agreements comprised approximately 4% of the total deferred revenue.

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ADOBE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

As of December 1, 2023, the balance of deferred revenue was $5.95 billion. During the three and nine months ended August 30, 2024, approximately $1.07 billion and $5.43 billion of revenue, respectively, was recognized that was included in the balance of deferred revenue as of December 1, 2023.

Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and unbilled amounts that will be recognized as revenue in future periods. As of August 30, 2024, remaining performance obligations were approximately $18.14 billion. Non-cancellable and non-refundable funds related to some of our enterprise customer agreements referred to above comprised approximately 4% of the total remaining performance obligations. Approximately 69% of the remaining performance obligations, excluding the aforementioned enterprise customer agreements, are expected to be recognized over the next 12 months with the remainder recognized thereafter.

Incremental costs of obtaining a contract with a customer are capitalized if we expect the benefit of those costs to be longer than one year and primarily relate to sales commissions paid to our sales force personnel. Capitalized contract acquisition costs are included in prepaid expenses and other current assets for the current portion and other assets for the long-term portion on the condensed consolidated balance sheets. Capitalized contract acquisition costs were $717 million and $656 million as of August 30, 2024 and December 1, 2023, respectively.

We record refund liabilities for amounts that may be subject to future refunds, which include sales returns reserves and customer rebates and credits. Refund liabilities are included in accrued expenses on the condensed consolidated balance sheets. Refund liabilities were $107 million and $111 million as of August 30, 2024 and December 1, 2023, respectively.

NOTE 3. ACQUISITIONS

Figma

On September 15, 2022, we entered into a definitive merger agreement under which we intended to acquire Figma, Inc. (“Figma”) for approximately $20 billion, comprised of approximately half cash and half stock.

On December 17, 2023, we entered into a mutual termination agreement with Figma to terminate the proposed merger. In accordance with the terms of the termination agreement, we paid Figma a termination fee of $1 billion. The termination fee was recorded in operating expenses in our condensed consolidated statements of income during the nine months ended August 30, 2024, and was not tax-deductible for financial statement purposes.

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NOTE 4. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash equivalents consist of highly liquid marketable securities with remaining maturities of three months or less at the date of purchase. We classify our investments in marketable debt securities as “available-for-sale.” We carry these investments at fair value, based on quoted market prices or other readily available market information. Unrealized gains and unrealized non-credit-related losses of marketable debt securities are included in accumulated other comprehensive income, net of taxes, in our condensed consolidated balance sheets. Unrealized credit-related losses are recorded to other income (expense), net in our condensed consolidated statements of income with a corresponding allowance for credit-related losses in our condensed consolidated balance sheets. Gains and losses are determined using the specific identification method and recognized when realized in our condensed consolidated statements of income.

Cash, cash equivalents and short-term investments consisted of the following as of August 30, 2024:


(in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	571	$	—	$	—	$	571
Cash equivalents:

Money market funds	6,622		—		—		6,622





Total cash and cash equivalents	7,193		—		—		7,193
Short-term fixed income securities:
Asset-backed securities	6		—		—		6
Corporate debt securities	146		—		(1)		145


U.S. agency securities	13		—		—		13
U.S. Treasury securities	159		—		(1)		158
Total short-term investments	324		—		(2)		322
Total cash, cash equivalents and short-term investments	$	7,517	$	—	$	(2)	$	7,515

Cash, cash equivalents and short-term investments consisted of the following as of December 1, 2023:


(in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	618	$	—	$	—	$	618
Cash equivalents:

Money market funds	6,498		—		—		6,498

Time deposits	25		—		—		25

Total cash equivalents	6,523		—		—		6,523
Total cash and cash equivalents	7,141		—		—		7,141
Short-term fixed income securities:
Asset-backed securities	15		—		—		15

Corporate debt securities	438		—		(4)		434


U.S. agency securities	13		—		(1)		12
U.S. Treasury securities	247		—		(7)		240


Total short-term investments	713		—		(12)		701
Total cash, cash equivalents and short-term investments	$	7,854	$	—	$	(12)	$	7,842

See Note 5 for further information regarding the fair value of our financial instruments.

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The following table summarizes the estimated fair value of short-term fixed income debt securities classified as short-term investments based on stated effective maturities as of August 30, 2024:


(in millions)	Estimated Fair Value
Due within one year	$	308
Due between one and two years	14


Total	$	322

We review our debt securities classified as short-term investments on a regular basis for impairment. For debt securities in unrealized loss positions, we determine whether any portion of the decline in fair value below the amortized cost basis is due to credit-related factors if we neither intend to sell nor anticipate that it is more likely than not that we will be required to sell prior to recovery of the amortized cost basis. We consider factors such as the extent to which the market value has been less than the cost, any noted failure of the issuer to make scheduled payments, changes to the rating of the security and other relevant credit-related factors in determining whether or not a credit loss exists. During the nine months ended August 30, 2024 and September 1, 2023, we did not recognize an allowance for credit-related losses on any of our investments.

NOTE 5. FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

The fair value of our financial assets and liabilities at August 30, 2024 was determined using the following inputs:


(in millions)	Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents:


Money market funds	$	6,622	$	6,622	$	—	$	—




Short-term investments:
Asset-backed securities	6		—		6		—
Corporate debt securities	145		—		145		—




U.S. agency securities	13		—		13		—
U.S. Treasury securities	158		—		158		—
Prepaid expenses and other current assets:
Foreign currency derivatives	9		—		9		—

Other assets:
Deferred compensation plan assets	266		266		—		—
Foreign currency derivatives	1		—		1		—

Total assets	$	7,220	$	6,888	$	332	$	—


Liabilities:
Accrued expenses:

Foreign currency derivatives	$	42	$	—	$	42	$	—

Other liabilities:
Foreign currency derivatives	9		—		9		—
Total liabilities	$	51	$	—	$	51	$	—

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The fair value of our financial assets and liabilities at December 1, 2023 was determined using the following inputs:


(in millions)	Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents:

Money market funds	$	6,498	$	6,498	$	—	$	—

Time deposits	25		25		—		—

Short-term investments:
Asset-backed securities	15		—		15		—
Corporate debt securities	434		—		434		—



U.S. agency securities	12		—		12		—
U.S. Treasury securities	240		—		240		—
Prepaid expenses and other current assets:
Foreign currency derivatives	52		—		52		—
Other assets:
Deferred compensation plan assets	206		206		—		—

Total assets	$	7,482	$	6,729	$	753	$	—


Liabilities:
Accrued expenses:

Foreign currency derivatives	$	4	$	—	$	4	$	—

See Note 4 for further information regarding the fair value of our financial instruments.

Our fixed income available-for-sale debt securities consist of high quality, investment grade securities from diverse issuers with a weighted average credit rating of AA. We value these securities based on pricing from independent pricing vendors who use matrix pricing valuation techniques including market approach methodologies that model information generated by market transactions involving identical or comparable assets, as well as discounted cash flow methodologies. Inputs include quoted prices in active markets for identical assets or inputs other than quoted prices that are observable either directly or indirectly in determining fair value, including benchmark yields, issuer spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. We therefore classify all of our fixed income available-for-sale securities as Level 2. We perform routine procedures such as comparing prices obtained from multiple independent sources to ensure that appropriate fair values are recorded.

The fair values of our money market funds, time deposits and deferred compensation plan assets, which consist of money market and other mutual funds, are based on quoted prices in active markets at the measurement date.

Our over-the-counter foreign currency derivatives are valued using pricing models and discounted cash flow methodologies based on observable foreign exchange and interest rate data at the measurement date.

Our other current financial assets and current financial liabilities have fair values that approximate their carrying values.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The fair value of our senior notes was $5.53 billion as of August 30, 2024, based on observable market prices in less active markets and categorized as Level 2. See Note 14 for further details regarding our debt.

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NOTE 6. DERIVATIVE FINANCIAL INSTRUMENTS

We may use derivatives to partially offset our business exposure to foreign currency and interest rate risk on expected future cash flows and certain existing assets and liabilities. We do not use any of our derivative instruments for trading purposes.

We enter into master netting arrangements to mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty. We do not offset fair value amounts recognized for derivative instruments under master netting arrangements. We also enter into collateral security agreements with certain of our counterparties to exchange cash collateral when the net fair value of certain derivative instruments fluctuates from contractually established thresholds.

Cash Flow Hedges

In countries outside the United States, we transact business in U.S. Dollars and in various other currencies. We may use foreign exchange option contracts and forward contracts to hedge a portion of our forecasted foreign currency denominated revenue and expenses. These foreign exchange contracts, carried at fair value, have maturities of up to 24 months.

As of August 30, 2024, we had net derivative losses on our foreign currency cash flow hedges expected to be recognized within the next 36 months, of which $52 million of net losses are expected to be recognized into revenue within the next 12 months.

Non-Designated Hedges

Our derivatives not designated as hedging instruments consist of foreign currency forward contracts that we primarily use to hedge monetary assets and liabilities denominated in non-functional currencies.

Fair value asset derivatives are included in prepaid expenses and other current assets for the current portion and other assets for the long-term portion, and fair value liability derivatives are included in accrued expenses for the current portion and other liabilities for the long-term portion on our condensed consolidated balance sheets. The fair value of derivative instruments as of August 30, 2024 and December 1, 2023 were as follows:


(in millions)	2024				2023
	Fair Value Asset Derivatives		Fair Value Liability Derivatives		Fair Value Asset Derivatives		Fair Value Liability Derivatives
Derivatives designated as hedging instruments:
Foreign exchange option contracts	$	5	$	—	$	42	$	—
Foreign exchange forward contracts	3		49		1		—


Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	2		2		9		4
Total derivatives	$	10	$	51	$	52	$	4

Gains and losses on derivative instruments, net of tax, recognized in our condensed consolidated statements of comprehensive income for the three and nine months ended August 30, 2024 were primarily associated with our foreign exchange forward contracts, for which we recognized $40 million of net losses in both periods. Gains and losses on derivative instruments, net of tax, for the three and nine months ended September 1, 2023 were immaterial.

For the three and nine months ended August 30, 2024 and September 1, 2023, the effects of derivative instruments on our condensed consolidated statements of income were immaterial.

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(Unaudited)

NOTE 7. GOODWILL AND OTHER INTANGIBLES

Goodwill as of August 30, 2024 and December 1, 2023 was $12.81 billion and $12.81 billion, respectively. During the second quarter of fiscal 2024, we completed our annual goodwill impairment test associated with our reporting units and determined there was no impairment of goodwill.

Other intangible assets subject to amortization as of August 30, 2024 and December 1, 2023 were as follows:


(in millions)	2024						2023
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer contracts and relationships	$	1,205	$	(713)	$	492	$	1,204	$	(619)	$	585
Purchased technology	877		(664)		213		984		(647)		337
Trademarks	376		(250)		126		376		(217)		159


Other	36		(9)		27		22		(15)		7
Other intangibles, net	$	2,494	$	(1,636)	$	858	$	2,586	$	(1,498)	$	1,088

Amortization expense related to other intangibles was $84 million and $252 million for the three and nine months ended August 30, 2024, respectively. Comparatively, amortization expense related to other intangibles was $92 million and $284 million for the three and nine months ended September 1, 2023, respectively. Of these amounts, $41 million and $125 million were included in cost of revenue for the three and nine months ended August 30, 2024, respectively, and $50 million and $158 million were included in cost of revenue for the three and nine months ended September 1, 2023, respectively.

As of August 30, 2024, the estimated aggregate amortization expense in future periods was as follows:


(in millions)
Fiscal Year	Other Intangibles (1)
Remainder of 2024	$	83
2025	303
2026	151
2027	109
2028	66
Thereafter	126
Total expected amortization expense	$	838

_________________________________________

(1)Excludes capitalized in-process research and development which is considered indefinite lived until the completion or abandonment of the associated research and development efforts.

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NOTE 8. ACCRUED EXPENSES

Accrued expenses as of August 30, 2024 and December 1, 2023 consisted of the following:


(in millions)	2024		2023
Accrued compensation and benefits	$	504	$	535
Accrued bonuses	447		547

Accrued corporate marketing	149		132

Sales and use taxes	111		122
Refund liabilities	107		111




Other	530		495
Accrued expenses	$	1,848	$	1,942

Other primarily includes general business accruals, accrued hosting fees, royalties payable and accrued interest expense.

NOTE 9. STOCK-BASED COMPENSATION

Restricted Stock Units

Restricted stock unit activity for the nine months ended August 30, 2024 was as follows:


	Number of Shares (in millions)	Weighted Average Grant Date Fair Value		Aggregate Fair Value (1) (in millions)
Beginning outstanding balance	7.8	$	418.63
Awarded	2.9	$	586.20
Released	(2.6)	$	441.45
Forfeited	(0.4)	$	449.34

Ending outstanding balance	7.7	$	472.50	$	4,436

Expected to vest	7.1	$	471.45	$	4,100

_________________________________________

(1) The aggregate fair value is calculated using the closing stock price as of August 30, 2024 of $574.41.

The total fair value of restricted stock units vested during the nine months ended August 30, 2024 was $1.42 billion.

Performance Shares

In the first quarter of fiscal 2024, the Executive Compensation Committee of our Board of Directors (the “ECC”) approved the 2024 Performance Share Program, the terms of which are similar to the 2023 Performance Share Program that is still outstanding. For information regarding our outstanding Performance Share Programs, including the terms, see “Note 12. Stock-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended December 1, 2023.

As of August 30, 2024, the performance shares awarded under our 2024, 2023 and 2022 Performance Share Programs remained outstanding and unvested.

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(Unaudited)

Performance share activity for the nine months ended August 30, 2024 was as follows:


	Number of Shares (in millions)	Weighted Average Grant Date Fair Value		Aggregate Fair Value (1) (in millions)
Beginning outstanding balance	0.5	$	465.71
Awarded	0.2	$	645.40
Released	(0.1)	$	455.65
Forfeited	(0.1)	$	487.20
Ending outstanding balance	0.5	$	536.74	$	301

Expected to vest	0.5	$	534.50	$	277

_________________________________________

(1) The aggregate fair value is calculated using the closing stock price as of August 30, 2024 of $574.41.

Under our Performance Share Programs, participants generally have the ability to receive up to 200% of the target number of shares originally granted. Shares released during the nine months ended August 30, 2024 resulted from 83% achievement of target for the 2021 Performance Share Program, as certified by the ECC in the first quarter of fiscal 2024.

The total fair value of performance shares vested during the nine months ended August 30, 2024 was $63 million.

Employee Stock Purchase Plan Shares

Employees purchased 1.2 million shares at an average price of $298.53 and 1.1 million shares at an average price of $286.31 for the nine months ended August 30, 2024 and September 1, 2023, respectively. The intrinsic value of shares purchased during the nine months ended August 30, 2024 and September 1, 2023 was $324 million and $185 million, respectively. The intrinsic value is calculated as the difference between the market value on the date of purchase and the purchase price of the shares.

Compensation Costs

As of August 30, 2024, there was $3.28 billion of unrecognized compensation cost, adjusted for estimated forfeitures, related to unvested stock-based awards and purchase rights which will be recognized over a weighted average period of 2.32 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures.

Total stock-based compensation costs included in our condensed consolidated statements of income for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Cost of revenue	$	30	$	30	$	90	$	88
Research and development	241		224		704		657
Sales and marketing	140		130		403		375
General and administrative	63		58		195		171
Total	$	474	$	442	$	1,392	$	1,291

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(Unaudited)

NOTE 10. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive income (loss) and activity, net of related taxes, were as follows:


(in millions)	December 1, 2023		Increase / Decrease		Reclassification Adjustments			August 30, 2024



Net unrealized gains / losses on available-for-sale securities	$	(12)	$	10	$	—	(1)	$	(2)
Net unrealized gains / losses on derivative instruments designated as hedging instruments	(26)		(59)		9		(2)	(76)
Cumulative foreign currency translation adjustments	(247)		16		—			(231)
Total accumulated other comprehensive income (loss), net of taxes	$	(285)	$	(33)	$	9		$	(309)

_________________________________________

(1)Reclassification adjustments for gains / losses on available-for-sale securities are classified in other income (expense), net.

(2)Reclassification adjustments for gains / losses on foreign currency hedges are classified in revenue or operating expenses, depending on the nature of the underlying transaction, and reclassification adjustments for gains / losses on Treasury lock hedges are classified in interest expense.

Taxes related to each component of other comprehensive income (loss) for the three and nine months ended August 30, 2024 and September 1, 2023 were immaterial.

NOTE 11. STOCK REPURCHASE PROGRAM

To facilitate our stock repurchase program, designed to return value to our stockholders and minimize dilution from stock issuances, we may repurchase our shares in the open market or enter into structured repurchase agreements with third parties. In December 2020, our Board of Directors granted authority to repurchase up to $15 billion in our common stock, which became fully utilized during the nine months ended August 30, 2024. In March 2024, our Board of Directors granted additional authority to repurchase up to $25 billion in our common stock through March 14, 2028.

During the nine months ended August 30, 2024 and September 1, 2023, we entered into accelerated share repurchase agreements (“ASRs”) with large financial institutions whereupon we provided them with prepayments totaling $7 billion and $1.4 billion, respectively. Under the terms of our ASRs, the financial institutions agree to deliver a portion of shares to us at contract inception and the remaining shares at settlement. The total number of shares delivered and average purchase price paid per share are determined upon settlement based on the Volume Weighted Average Price (“VWAP”) over the term of the ASR, less an agreed upon discount.

During the nine months ended September 1, 2023, we also entered into structured stock repurchase agreements with a large financial institution whereupon we provided them with prepayments totaling $2 billion. Under the terms of our structured stock repurchase agreements, the financial institutions agree to deliver shares to us at monthly intervals during the respective contract terms, and the number of shares delivered each month are determined based on the total notional amount of the contracts, the number of trading days in the intervals and the VWAP during the intervals, less an agreed upon discount.

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(Unaudited)

Share repurchase activity for the nine months ended August 30, 2024 and September 1, 2023 was as follows:


	Number of Shares Delivered (in millions)	Average Price Paid Per Share
Nine months ended August 30, 2024
Structured stock repurchase agreement entered into in fiscal 2023	0.6	$	626.68
ASR entered into in December 2023	3.5	$	578.11
ASR entered into in March 2024	5.2	$	475.94
ASR entered into in June 2024	3.6	$	—	(1)

Total shares delivered	12.9
Nine months ended September 1, 2023
Structured stock repurchase agreements entered into in fiscal 2022 and the nine months ended September 1, 2023	5.7	$	396.43
ASR entered into in December 2022	4.0	$	348.46
Total shares delivered	9.7

_________________________________________

(1) During the nine months ended August 30, 2024, we received the initial delivery of shares under the ASR entered into in June 2024, which remained outstanding as of August 30, 2024. Subsequent to August 30, 2024, the outstanding ASR was settled which resulted in total repurchases of 4.6 million shares at an average price of $546.30.

Prepayments for stock repurchases are classified as treasury stock, a component of stockholders’ equity on our condensed consolidated balance sheets, at the payment date, though only shares physically delivered to us by the end of the respective period are excluded from the computation of net income per share. As of August 30, 2024, a portion of the $2.5 billion prepayment under the ASR entered into in June 2024 was evaluated as an unsettled forward contract indexed to our own stock, classified within stockholders’ equity.

Subsequent to August 30, 2024, as part of the March 2024 stock repurchase authority, we entered into an ASR with a large financial institution whereupon we provided them with a prepayment of $2.5 billion and received an initial delivery of 3.6 million shares, which represents approximately 75% of our prepayment. Upon completion of this $2.5 billion ASR, $17.65 billion remains under our March 2024 stock repurchase authority.

NOTE 12. NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted net income per share for the three and nine months ended August 30, 2024 and September 1, 2023:


	Three Months				Nine Months
(in millions, except per share data)	2024		2023		2024		2023
Net income	$	1,684	$	1,403	$	3,877	$	3,945

Shares used to compute basic net income per share	445.3		456.4		449.1		457.7
Dilutive potential common shares from stock plans and programs	2.3		3.1		2.7		1.5


Shares used to compute diluted net income per share	447.6		459.5		451.8		459.2

Basic net income per share	$	3.78	$	3.07	$	8.63	$	8.62
Diluted net income per share	$	3.76	$	3.05	$	8.58	$	8.59

Anti-dilutive potential common shares	2.0		0.5		1.8		3.5

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(Unaudited)

NOTE 13. COMMITMENTS AND CONTINGENCIES

Indemnifications

In the ordinary course of business, we provide indemnifications of varying scope to customers and channel partners against claims of intellectual property infringement made by third parties arising from the use of our products and from time to time, we are subject to claims by our customers under these indemnification provisions. Historically, costs related to these indemnification provisions have not been significant and we are unable to estimate the maximum potential impact of these indemnification provisions on our future results of operations.

To the extent permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is or was serving at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal.

Legal Proceedings

We are subject to legal proceedings, claims, including claims relating to intellectual property, commercial, employment and other matters, and investigations, including government investigations, that arise in the ordinary course of our business. Some of these disputes, legal proceedings and investigations may include speculative claims for substantial or indeterminate amounts of damages. We consider all claims on a quarterly basis in accordance with GAAP and based on known facts assess whether potential losses are considered reasonably possible or probable and estimable. Based upon this assessment, we then evaluate disclosure requirements and whether to accrue for such claims in our financial statements. This determination is then reviewed and discussed with the Audit Committee of the Board of Directors.

We make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. As of August 30, 2024, accrued provisions for legal proceedings were immaterial. Unless otherwise specifically disclosed in this note, we have determined that no disclosure is required related to any claim against us because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial.

All legal costs associated with litigation are expensed as incurred. Litigation is inherently unpredictable. However, we believe that we have valid defenses with respect to the legal matters pending against us. It is possible, nevertheless, that our consolidated financial position, results of operations or cash flows could be negatively affected by an unfavorable resolution of one or more of such proceedings, claims or investigations.

Since June 2022, we have been cooperating with the Federal Trade Commission (the “FTC”) staff in response to a Civil Investigative Demand seeking information regarding our disclosure and subscription cancellation practices relative to the Restore Online Shoppers’ Confidence Act (“ROSCA”). In November 2023, the FTC staff asserted that they had the authority to enter into consent negotiations to determine if a settlement regarding their investigation of these issues could be reached. On March 20, 2024, we were informed that the FTC had voted to authorize a filing of the case. The FTC then referred the case to the Department of Justice (the “DOJ”), and on June 17, 2024, the DOJ filed a civil complaint in the United States District Court for the Northern District of California, naming Adobe and certain of our employees as defendants. The complaint alleges that Adobe failed to clearly and conspicuously disclose material terms, failed to obtain express informed consent and failed to provide a simple cancellation mechanism regarding our disclosure and subscription cancellation practices in violation of ROSCA and the FTC Act. The DOJ is seeking injunctive relief, civil penalties, equitable monetary relief and other relief. The defense or resolution of this matter could involve significant monetary costs or penalties and have a significant impact on our financial results and operations. There can be no assurance that we will be successful in negotiating a favorable settlement or in litigation. Any remedies or compliance requirements could adversely affect our ability to operate our business or have a materially adverse impact on our financial results. At this stage, we are unable to estimate a reasonably possible financial loss or range of any potential financial loss, if any, as a result of this litigation.

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(Unaudited)

On October 20, 2023, a securities class action captioned Pembroke Pines Firefighters & Police Officers Pension Fund et al v. Adobe, Inc. et al, Case No. 1:23-cv-09260, was filed in the U.S. District Court for the Southern District of New York (the “Securities Action”) naming Adobe and certain of our current and former officers as defendants. The Securities Action purports to be brought on behalf of purchasers of the Company’s stock between July 23, 2021 and September 22, 2022 (the “Class Period”). The complaint, which was amended on February 23, 2024, alleges that certain public statements made by Adobe during the Class Period related to competition from Figma and the adequacy of Adobe’s existing offerings to counter harms Adobe may have faced due to Figma’s growing market position were materially false and misleading. The Securities Action seeks unspecified compensatory damages, attorneys’ fees and costs, and extraordinary equitable and/or injunctive relief.

On November 16, 2023, a shareholder derivative action captioned Shah v. Narayen et al, Case No. 1:23-cv-01315, was filed in the U.S. District Court for the District of Delaware (the “Shah Action”), purportedly on behalf of Adobe. On January 3, 2024, a second shareholder derivative action captioned Gervat v. Narayen et al, Case No. 1:24-cv-00006, was filed in the U.S. District Court for the District of Delaware (the “Gervat Action”), purportedly on behalf of Adobe. On January 24, 2024, the Court consolidated the Shah and Gervat Actions (together, the “Consolidated Derivative Action”). On January 18, 2024, a shareholder derivative action captioned Sbriglio v. Narayen et al., Case No. 24-cv-429458, was filed in California Superior Court (the “Sbriglio Action”), purportedly on behalf of Adobe. On January 29, 2024, a shareholder derivative action captioned Roy v. Narayen et al., No. 1:24-cv-00633, was filed in the U.S. District Court for the Southern District of New York, (the “Roy Action,” and together with the Consolidated Derivative Action and the Sbriglio Action, the “Derivative Actions”), purportedly on behalf of Adobe. The Derivative Actions are based largely on the same alleged facts and circumstances as the Securities Action, and name certain of our current and former officers and members of our Board of Directors as defendants and Adobe as a nominal defendant. The Derivative Actions together allege claims for breach of fiduciary duty and/or aiding and abetting breach of fiduciary duties, unjust enrichment, waste of corporate assets, abuse of control, and violations of Section 10(b) (and Rule 10b-5 promulgated thereunder), Section 20(a), and/or Section 21D of the Securities Exchange Act of 1934, as amended, and seek recovery of unspecified damages, restitution, and attorney’s fees and costs, as well as disgorgement of profits and certain payments and benefits, in the case of the Gervat Action, and improvements to Adobe’s corporate governance and internal procedures, in the case of the Shah Action, on behalf of Adobe.

We dispute the allegations of wrongdoing in the Securities Action and the Derivative Actions and intend to vigorously defend ourselves in these matters. In view of the complexity and ongoing and uncertain nature of the outstanding proceedings and inquiries, at this time we are unable to estimate a reasonably possible financial loss or range of financial loss, if any, that we may incur to resolve or settle the Securities Action and the Derivative Actions.

In connection with disputes relating to the validity or alleged infringement of third-party intellectual property rights, including patent rights, we have been, are currently and may in the future be subject to claims, negotiations or complex, protracted litigation. Intellectual property disputes and litigation may be very costly and can be disruptive to our business operations by diverting the attention and energies of management and key technical personnel. Although we have successfully defended or resolved past litigation and disputes, we may not prevail in any ongoing or future litigation and disputes. Third-party intellectual property disputes could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from licensing certain of our products or offering certain of our services, subject us to injunctions restricting our sale of products or services, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy indemnification commitments with our customers including contractual provisions under various license arrangements and service agreements.

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ADOBE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

NOTE 14. DEBT

The carrying value of our borrowings as of August 30, 2024 and December 1, 2023 were as follows:


(dollars in millions)	Issuance Date	Due Date	Effective Interest Rate	2024		2023
1.90% 2025 Notes	February 2020	February 2025	2.07%	$	500	$	500
3.25% 2025 Notes	January 2015	February 2025	3.67%	1,000		1,000
2.15% 2027 Notes	February 2020	February 2027	2.26%	850		850
4.85% 2027 Notes	April 2024	April 2027	5.03%	500		—
4.80% 2029 Notes	April 2024	April 2029	4.93%	750		—
2.30% 2030 Notes	February 2020	February 2030	2.69%	1,300		1,300
4.95% 2034 Notes	April 2024	April 2034	5.03%	750		—
Total debt outstanding, at par				$	5,650	$	3,650
Less: Current portion of debt, at par				(1,500)		—
Unamortized discount and debt issuance costs				(22)		(16)
Carrying value of long-term debt				$	4,128	$	3,634

Current portion of debt, at par				$	1,500	$	—
Unamortized discount and debt issuance costs				(1)		—
Carrying value of current debt				$	1,499	$	—

Senior Notes

In January 2015, we issued $1 billion of senior notes due February 1, 2025. The related discount and issuance costs are amortized to interest expense over the term of the notes using the effective interest method. Interest is payable semi-annually, in arrears, on February 1 and August 1.

In February 2020, we issued $500 million of senior notes due February 1, 2025, $850 million of senior notes due February 1, 2027 and $1.30 billion of senior notes due February 1, 2030. The related discount and issuance costs are amortized to interest expense over the respective terms of the notes using the effective interest method. Interest is payable semi-annually, in arrears, on February 1 and August 1.

In April 2024, we issued $500 million of senior notes due April 4, 2027, $750 million of senior notes due April 4, 2029 and $750 million of senior notes due April 4, 2034. Our total proceeds were approximately $1.99 billion, net of an issuance discount of $3 million and total issuance costs of $9 million. The related discount and issuance costs are amortized to interest expense over the respective terms of the notes using the effective interest method. Interest is payable semi-annually, in arrears, on April 4 and October 4.

During the first quarter of fiscal 2024, we reclassified the senior notes due February 1, 2025 as current debt in our condensed consolidated balance sheets. As of August 30, 2024, the carrying value of our current debt was $1.50 billion, net of the related discount and issuance costs. Though we intend to refinance the current portion of our debt on or before the due date, the timing of the refinancing may be impacted by market conditions.

Our senior notes rank equally with our other unsecured and unsubordinated indebtedness, and do not contain financial covenants. We may redeem the notes at any time, subject to a make-whole premium.

For the senior notes issued in January 2015 and February 2020, upon the occurrence of certain change of control triggering events, we may be required to repurchase the notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. In addition, these notes include covenants that limit our ability to grant liens on assets and to enter into sale and leaseback transactions, subject to significant allowances.

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ADOBE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Revolving Credit Agreement

In June 2022, we entered into a credit agreement (the “Revolving Credit Agreement”), providing for a five-year $1.5 billion senior unsecured revolving credit facility, which replaced our previous five-year $1 billion senior unsecured revolving credit agreement entered into in October 2018. The Revolving Credit Agreement provides for loans to Adobe and certain of its subsidiaries that may be designated from time to time as additional borrowers. Pursuant to the terms of the Revolving Credit Agreement, we may, subject to the agreement of lenders to provide additional commitments, obtain up to an additional $500 million in commitments, for a maximum aggregate commitment of $2 billion. At our election, loans under the Revolving Credit Agreement will bear interest at either (i) term Secured Overnight Financing Rate (“SOFR”), plus a margin, (ii) adjusted daily SOFR, plus a margin, (iii) alternative currency rate, plus a margin, or (iv) base rate, which is defined as the highest of (a) the federal funds rate plus 0.50%, (b) the agent’s prime rate, or (c) term SOFR plus 1.00%. The margin for term SOFR, adjusted daily SOFR and alternative currency rate loans is based on our debt ratings, and ranges from 0.460% to 0.900%. In addition, facility fees determined according to our debt ratings are payable on the aggregate commitments, regardless of usage, quarterly in an amount ranging from 0.040% to 0.100% per annum. We are permitted to permanently reduce the aggregate commitment under the Revolving Credit Agreement at any time. Subject to certain conditions stated in the Revolving Credit Agreement, Adobe and any of its subsidiaries designated as additional borrowers may borrow, prepay and re-borrow amounts at any time during the term of the Revolving Credit Agreement.

The Revolving Credit Agreement contains customary representations, warranties, affirmative and negative covenants, including events of default and indemnification provisions in favor of the lenders. The negative covenants include restrictions regarding the incurrence of liens and indebtedness, certain merger transactions, dispositions and other matters, all subject to certain exceptions.

The facility will terminate and all amounts owing thereunder will be due and payable on the maturity date unless (a) the commitments are terminated earlier upon the occurrence of certain events, including an event of default, or (b) the maturity date is further extended upon our request, subject to the agreement of the lenders.

As of August 30, 2024, there were no outstanding borrowings under this Revolving Credit Agreement.

Commercial Paper Program

In September 2023, we established a commercial paper program under which we may issue unsecured commercial paper up to a total of $3 billion outstanding at any time, with maturities of up to 397 days from the date of issue. The net proceeds from the issuance of commercial paper are expected to be used for general corporate purposes, which may include working capital, capital expenditures, acquisitions, stock repurchases, refinancing indebtedness or any other general corporate purposes. As of August 30, 2024, there were no outstanding borrowings under the commercial paper program.

Term Loan Credit Agreement

In January 2023, we entered into a delayed draw term loan credit agreement (the “Term Loan Credit Agreement”), providing for a senior unsecured term loan of up to $3.5 billion for the purpose of partially funding the purchase price for our intended acquisition of Figma and the related fees and expenses. During the nine months ended August 30, 2024, we entered into a mutual termination agreement with Figma to terminate the previously announced merger agreement. Consequently, the Term Loan Credit Agreement was terminated. There were no outstanding borrowings under the Term Loan Credit Agreement at the time of termination.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto.

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements, including statements regarding product plans, future growth, market opportunities, fluctuations in foreign currency exchange rates, strategic investments, industry positioning, customer acquisition and retention, the amount of annualized recurring revenue and revenue growth. In addition, when used in this report, the words “will,” “expects,” “could,” “would,” “may,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “targets,” “estimates,” “looks for,” “looks to,” “continues” and similar expressions, as well as statements regarding our focus for the future, are generally intended to identify forward-looking statements. Each of the forward-looking statements we make in this report involves risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in Part II, Item 1A of this report. The risks described herein and in other documents we file from time to time with the U.S. Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K for fiscal 2023, should be carefully reviewed. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document, except as required by law.

BUSINESS OVERVIEW

Adobe is a global technology company with a mission to change the world through personalized digital experiences. For over four decades, Adobe’s innovations have transformed how individuals, teams, businesses, enterprises, institutions, and governments engage and interact across all types of media. Our products, services and solutions are used around the world to imagine, create, manage, deliver, measure, optimize and engage with content across surfaces and fuel digital experiences. We have a diverse user base that includes consumers, communicators, creative professionals, developers, students, small and medium businesses and enterprises. We are also empowering creators by putting the power of artificial intelligence (“AI”) in their hands, and doing so in ways we believe are responsible. Our products and services help unleash creativity, accelerate document productivity and power businesses in a digital world. We have operations in the Americas; Europe, Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”).

OPERATIONS OVERVIEW

For our third quarter of fiscal 2024, we experienced strong demand across our Digital Media and Digital Experience offerings, driven by our innovative product roadmap. As we execute on our long-term growth initiatives, with focus on delivering product innovation and driving adoption and usage of our AI-powered solutions, we have continued to experience growth in software-based subscription revenue across our portfolio of offerings.

Digital Media

In our Digital Media segment, we are a market leader with Creative Cloud, our subscription-based offering which provides desktop tools, mobile applications (“apps”) and cloud-based services for designing, creating and publishing rich content and immersive 3D experiences. Creative Cloud offers Adobe Acrobat Pro, our comprehensive PDF solution, integral to creative workflows and used by creators worldwide as part of our Creative Cloud All Apps subscription and on a standalone basis. In addition, Adobe Express is our web and mobile app designed to enable a broad spectrum of users, including novice content creators, communicators and creative professionals, to create, edit and customize content quickly and easily with content-first, task-based solutions. Creative Cloud also includes Adobe Firefly, a group of creative generative AI models designed to generate high quality images and text effects. Adobe Firefly-powered generative AI features are also available across Creative Cloud apps including Adobe Photoshop and Adobe Express. Creative Cloud delivers value with deep, cross-product integration, frequent product updates and feature enhancements, cloud-enabled services including storage and syncing of files across users’ devices, machine learning and artificial intelligence, access to marketplace, social and community-based features with our Adobe Stock and Behance services, app creation capabilities, tools which assist with enterprise deployments and team collaboration, and affordable pricing for cost-sensitive customers.

We offer Creative Cloud for individuals, students, teams and enterprises. We expect Creative Cloud will drive sustained long-term revenue growth through a continued expansion of our customer base by attracting new users with new features and products like Adobe Express and Adobe Firefly that make creative tools accessible to first-time creators and communicators, and delivering new features and technologies to existing customers with our latest releases such as generative AI capabilities. We have also built out a marketplace for Creative Cloud subscribers to enable the delivery and purchase of stock content in our

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Adobe Stock service. Overall, our strategy with Creative Cloud is designed to enable us to increase our revenue with existing users, continue to attract new customers, and grow our recurring and predictable revenue stream that is recognized ratably.

We continue to implement strategies that are designed to accelerate awareness, consideration and purchase of subscriptions to our Creative Cloud offerings. These strategies include increasing the value Creative Cloud users receive, such as offering new and enhanced desktop, web and mobile apps, as well as targeted promotions and offers that attract past customers and potential users to experience and ultimately subscribe to Creative Cloud. Because of the shift towards Creative Cloud subscriptions and Enterprise Term License Agreements (“ETLAs”), revenue from perpetual licensing of our Creative products has been immaterial to our business.

We are also a market leader with our Document Cloud offerings built around our Adobe Acrobat family of products, with a set of integrated mobile apps and cloud-based document services which enable users to create, collaborate, review, approve, sign and track documents regardless of platform or application source type. Document Cloud, which enhances the way people manage critical documents at home, in the office and across devices, includes subscriptions to Adobe Acrobat Pro and Standard, Adobe Acrobat Sign and Adobe Scan. Certain Adobe Acrobat products are also offered as perpetual licenses. In April 2024, we introduced Acrobat AI Assistant, a generative AI-powered product designed to deliver insights and enhance productivity through interactive document experiences, which is available as an add-on subscription to our Adobe Acrobat Pro and Standard and Adobe Acrobat Reader products.

As part of our Creative Cloud and Document Cloud strategies, we utilize a data-driven operating model (“DDOM”) and our Adobe Experience Cloud solutions to raise awareness of our products, drive new customer acquisition, engagement and retention, and optimize customer journeys, which continue to contribute strong product-led growth in the business.

Annualized Recurring Revenue (“ARR”) is currently the key performance metric our management uses to assess the health and trajectory of our overall Digital Media segment. ARR should be viewed independently of revenue, deferred revenue and remaining performance obligations as ARR is a performance metric and is not intended to be combined with any of these items. We adjust our reported ARR on an annual basis to reflect any exchange rate changes. Our reported ARR results in the current fiscal year are based on currency rates set at the beginning of the year and held constant throughout the year for measurement purposes. We calculate ARR as follows:


Creative ARR			Annual Value of Creative Cloud Subscriptions and Services + Annual Creative ETLA Contract Value
Document Cloud ARR			Annual Value of Document Cloud Subscriptions and Services + Annual Document Cloud ETLA Contract Value
Digital Media ARR			Creative ARR + Document Cloud ARR

Creative ARR exiting the third quarter of fiscal 2024 was $13.45 billion, up from $12.49 billion at the end of fiscal 2023. Document Cloud ARR exiting the third quarter of fiscal 2024 was $3.31 billion, up from $2.84 billion at the end of fiscal 2023. Total Digital Media ARR grew to $16.76 billion at the end of the third quarter of fiscal 2024, up from $15.33 billion at the end of fiscal 2023.

Our success in driving growth in ARR has positively affected our revenue growth. Creative revenue in the third quarter of fiscal 2024 was $3.19 billion, up from $2.91 billion in the third quarter of fiscal 2023, representing 10% year-over-year growth. Document Cloud revenue in the third quarter of fiscal 2024 was $807 million, up from $685 million in the third quarter of fiscal 2023, representing 18% year-over-year growth. Total Digital Media segment revenue grew to $4.00 billion in the third quarter of fiscal 2024, up from $3.59 billion in the third quarter of fiscal 2023, representing 11% year-over-year growth driven by strong net new user growth.

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Digital Experience

We are a market leader in the fast-growing category addressed by our Digital Experience segment. The Adobe Experience Cloud apps and services are designed to manage customer journeys, enable personalized experiences at scale and deliver intelligence for businesses of any size in any industry. Our differentiation and competitive advantage are strengthened by our ability to use the Adobe Experience Platform to integrate our comprehensive set of solutions and our ability to embed AI into our product portfolio, such as with our new Adobe Experience Platform AI Assistant, a generative AI-powered conversational interface designed to help customers automate workflows and generate new audiences and journeys.

Adobe Experience Cloud delivers solutions for our customers across the following strategic growth pillars:

•Data insights and audiences. Our products, including Adobe Analytics, Customer Journey Analytics, Adobe Product Analytics, Adobe Mix Modeler, and our Real-time Customer Data Platform, deliver actionable data in real time to provide highly tailored and adaptive experiences across platforms.

•Content, commerce and workflows. Our products help customers manage, deliver, monetize, and optimize content delivery through Adobe Experience Manager; build multi-channel commerce experiences for B2B and B2C customers on a single platform with Adobe Commerce; and strategically plan, manage, collaborate, and execute on workflows for marketing campaigns and other projects at speed and scale with our enterprise work management app, Adobe Workfront.

•Customer journeys. Our products help businesses manage, test, target and personalize customer journeys delivered as campaigns across B2B and B2C use cases, including through Adobe Marketo Engage, Adobe Campaign, Adobe Target and Adobe Journey Optimizer.

In addition to chief marketing officers, chief revenue officers and digital marketers, users of our Digital Experience solutions include advertisers, campaign managers, publishers, data analysts, content managers, social marketers, marketing executives and information management and technology executives. These customers often are involved in workflows that integrate other Adobe products, such as our Digital Media offerings. By combining the creativity of our Digital Media business with the science of our Digital Experience business, such as with our new Adobe GenStudio solution, we help our customers to more efficiently and effectively make, manage, measure and monetize their content across every channel with an end-to-end workflow and feedback loop.

We utilize a direct sales force to market and license our Digital Experience solutions, as well as an extensive ecosystem of partners, including marketing agencies, systems integrators and independent software vendors that help license and deploy our solutions to their customers. We have made significant investments to broaden the scale and size of all of these routes to market, and our recent financial results reflect the success of these investments and our experience-led growth strategy.

Digital Experience revenue was $1.35 billion in the third quarter of fiscal 2024, up from $1.23 billion in the third quarter of fiscal 2023, representing 10% year-over-year growth. Driving this growth was the increase in subscription revenue, which grew to $1.23 billion in the third quarter of fiscal 2024 from $1.10 billion in the third quarter of fiscal 2023, representing 12% year-over-year growth.

Macroeconomic Conditions

As a corporation with an extensive global footprint, we are subject to risks and exposures from the evolving macroeconomic environment, including the effects of increased global inflationary pressures and interest rates, fluctuations in foreign currency exchange rates, potential economic slowdowns or recessions and geopolitical pressures, including the unknown impacts of current and future trade regulations. We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results.

While our revenue and earnings are relatively predictable as a result of our subscription-based business model, the broader implications of these macroeconomic events on our business, results of operations and overall financial position, particularly in the long term, remain uncertain. See Risk Factors for further discussion of the possible impact of these macroeconomic issues on our business.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

In preparing our condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the SEC, we make assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. We evaluate our assumptions, judgments and estimates on a regular basis. We also discuss our critical accounting policies and estimates with the Audit Committee of the Board of Directors.

We believe that the assumptions, judgments and estimates involved in the accounting for revenue recognition and income taxes have the greatest potential impact on our condensed consolidated financial statements. These areas are key components of our results of operations and are based on complex rules requiring us to make judgments and estimates, and consequently, we consider these to be our critical accounting policies. Historically, our assumptions, judgments and estimates relative to our critical accounting policies have not differed materially from actual results.

There have been no significant changes in our critical accounting policies and estimates during the nine months ended August 30, 2024, as compared to the critical accounting policies and estimates disclosed in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 1, 2023.

Recent Accounting Pronouncements

See Note 1 of our notes to condensed consolidated financial statements for information regarding recent accounting pronouncements that are of significance or potential significance to us.

RESULTS OF OPERATIONS

Financial Performance Summary

•Total Digital Media ARR of approximately $16.76 billion as of August 30, 2024 increased by $1.42 billion, or 9%, from $15.33 billion as of December 1, 2023.

•Creative revenue during the three months ended August 30, 2024 of $3.19 billion increased by $279 million, or 10%, compared to the year-ago period. Document Cloud revenue during the three months ended August 30, 2024 of $807 million increased by $122 million, or 18%, compared to the year-ago period.

•Digital Experience revenue of $1.35 billion during the three months ended August 30, 2024 increased by $125 million, or 10%, compared to the year-ago period.

•Cost of revenue of $554 million during the three months ended August 30, 2024 decreased by $26 million, or 4%, compared to the year-ago period.

•Operating expenses of $2.86 billion during the three months ended August 30, 2024 increased by $249 million, or 10%, compared to the year-ago period.

•Net income of $1.68 billion during the three months ended August 30, 2024 increased by $281 million, or 20%, compared to the year-ago period.

•Cash flows from operations of $5.14 billion during the nine months ended August 30, 2024 decreased by $570 million, or 10%, compared to the year-ago period and were adversely impacted by the payment of the $1 billion Figma termination fee during the first quarter of fiscal 2024.

•Remaining performance obligations of $18.14 billion as of August 30, 2024 increased by $924 million, or 5%, from $17.22 billion as of December 1, 2023.

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Revenue for the Three and Nine Months Ended August 30, 2024 and September 1, 2023


(dollars in millions)	Three Months								Nine Months
	2024			2023			% Change		2024			2023			% Change
Subscription	$	5,180		$	4,631		12	%	$	15,156		$	13,521		12	%
Percentage of total revenue	96		%	95		%			95		%	94		%
Product	82			96			(15)	%	305			346			(12)	%
Percentage of total revenue	1		%	2		%			2		%	2		%
Services and other	146			163			(10)	%	438			494			(11)	%
Percentage of total revenue	3		%	3		%			3		%	4		%
Total revenue	$	5,408		$	4,890		11	%	$	15,899		$	14,361		11	%

Subscription

Our subscription revenue is comprised primarily of fees we charge for our subscription and hosted service offerings, and related support, including Creative Cloud and certain of our Adobe Experience Cloud and Document Cloud services. We primarily recognize subscription revenue ratably over the term of agreements with our customers, beginning with commencement of service. Subscription revenue related to certain offerings, where fees are based on a number of transactions and invoicing is aligned to the pattern of performance, customer benefit and consumption, are recognized on a usage basis.

We have the following reportable segments: Digital Media, Digital Experience, and Publishing and Advertising. Subscription revenue by reportable segment for the three and nine months ended August 30, 2024 and September 1, 2023 is as follows:


(dollars in millions)	Three Months						Nine Months
	2024		2023		% Change		2024		2023		% Change
Digital Media	$	3,921	$	3,506	12	%	$	11,474	$	10,225	12	%
Digital Experience	1,231		1,096		12	%	3,599		3,208		12	%
Publishing and Advertising	28		29		(3)	%	83		88		(6)	%
Total subscription revenue	$	5,180	$	4,631	12	%	$	15,156	$	13,521	12	%

Product

Our product revenue is comprised primarily of fees related to licenses for on-premise software purchased on a perpetual basis, for a fixed period of time, or based on usage for certain of our original equipment manufacturer and royalty agreements. We primarily recognize product revenue at the point in time the software is available to the customer, provided all other revenue recognition criteria are met.

Services and Other

Our services and other revenue is comprised primarily of fees related to consulting, training, maintenance and support for certain on-premise licenses that are recognized at a point in time and our advertising offerings. We typically sell our consulting contracts on a time-and-materials or fixed-fee basis. These revenues are recognized as the services are performed for time-and-materials contracts and on a relative performance basis for fixed-fee contracts. Training revenues are recognized as the services are performed. Our maintenance and support offerings, which entitle customers, partners and developers to receive desktop product upgrades and enhancements or technical support, depending on the offering, are generally recognized ratably over the term of the arrangement. Transaction-based advertising revenue is recognized on a usage basis as we satisfy the performance obligations to our customers.

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Segment Information


(dollars in millions)	Three Months								Nine Months
	2024			2023			% Change		2024			2023			% Change
Digital Media	$	3,995		$	3,594		11	%	$	11,719		$	10,500		12	%
Percentage of total revenue	74		%	74		%			74		%	73		%
Digital Experience	1,354			1,229			10	%	3,970			3,627			9	%
Percentage of total revenue	25		%	25		%			25		%	25		%
Publishing and Advertising	59			67			(12)	%	210			234			(10)	%
Percentage of total revenue	1		%	1		%			1		%	2		%
Total revenue	$	5,408		$	4,890		11	%	$	15,899		$	14,361		11	%

Digital Media

Revenue by major offerings in our Digital Media reportable segment for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


(dollars in millions)	Three Months						Nine Months
	2024		2023		% Change		2024		2023		% Change
Creative Cloud	$	3,188	$	2,909	10	%	$	9,380	$	8,522	10	%
Document Cloud	807		685		18	%	2,339		1,978		18	%
Total Digital Media revenue	$	3,995	$	3,594	11	%	$	11,719	$	10,500	12	%

Revenue from Digital Media increased $401 million and $1.22 billion during the three and nine months ended August 30, 2024 as compared to the three and nine months ended September 1, 2023 driven by increases in revenue associated with our Creative and Document Cloud subscription offerings due to continued demand amid an increasingly digital environment, strong engagement across customer segments and migrating our customers to higher valued subscription offerings with increased revenue per subscription.

Digital Experience

Revenue from Digital Experience increased $125 million and $343 million during the three and nine months ended August 30, 2024 as compared to the three and nine months ended September 1, 2023 driven by subscription revenue growth across our offerings.

Geographical Information


(dollars in millions)	Three Months								Nine Months
	2024			2023			% Change		2024			2023			% Change
Americas	$	3,241		$	2,943		10	%	$	9,539		$	8,601		11	%
Percentage of total revenue	60		%	60		%			60		%	60		%
EMEA	1,405			1,229			14	%	4,085			3,615			13	%
Percentage of total revenue	26		%	25		%			26		%	25		%
APAC	762			718			6	%	2,275			2,145			6	%
Percentage of total revenue	14		%	15		%			14		%	15		%
Total revenue	$	5,408		$	4,890		11	%	$	15,899		$	14,361		11	%

Overall revenue during the three and nine months ended August 30, 2024 increased in all geographic regions as compared to the three and nine months ended September 1, 2023. Within each geographic region, the fluctuations in revenue by reportable segment were attributable to the factors noted in the segment information above.

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Included in the overall change in revenue for the three and nine months ended August 30, 2024 as compared to the three and nine months ended September 1, 2023 were impacts associated with foreign currency and our foreign currency hedging program. During the three and nine months ended August 30, 2024, the U.S. Dollar primarily strengthened against APAC foreign currencies and weakened against EMEA foreign currencies as compared to the year-ago periods, which resulted in a net decrease in revenue in U.S. Dollar equivalents of approximately $33 million and $49 million, respectively. For the three and nine months ended August 30, 2024, we had net hedging losses from our cash flow hedging program of $2 million and $11 million, respectively.

Cost of Revenue for the Three and Nine Months Ended August 30, 2024 and September 1, 2023


(dollars in millions)	Three Months								Nine Months
	2024			2023			% Change		2024			2023			% Change
Subscription	$	413		$	447		(8)	%	$	1,324		$	1,317		1	%
Percentage of total revenue	8		%	9		%			8		%	9		%
Product	6			7			(14)	%	19			23			(17)	%
Percentage of total revenue	*			*					*			*
Services and other	135			126			7	%	399			380			5	%
Percentage of total revenue	2		%	3		%			3		%	3		%
Total cost of revenue	$	554		$	580		(4)	%	$	1,742		$	1,720		1	%

_________________________________________

(*) Percentage is less than 1%.

Subscription

Cost of subscription revenue consists of third-party hosting services and data center costs, including expenses related to operating our network infrastructure. Cost of subscription revenue also includes compensation costs associated with network operations, implementation, account management and technical support personnel, royalty fees, software costs and amortization of certain intangible assets.

Cost of subscription revenue decreased during the three months ended August 30, 2024 as compared to the three months ended September 1, 2023 and increased during the nine months ended August 30, 2024 as compared to the nine months ended September 1, 2023 primarily due to the following:


	Components of % Change 2024-2023 QTD		Components of % Change 2024-2023 YTD
Loss contingency reversal	(10)	%	(3)	%
Amortization of intangibles	(2)		(2)
Hosting services and data center costs	2		4

Base compensation and related benefits	2		1


Various individually insignificant items	—		1
Total change	(8)	%	1	%

Cost of subscription revenue during the three and nine months ended August 30, 2024 included the reversal of a loss contingency associated with an IP litigation matter.

Product

Cost of product revenue is primarily comprised of third-party royalties, localization costs and costs associated with the manufacturing of our products.

Services and Other

Cost of services and other revenue is primarily comprised of compensation and contracted costs incurred to provide consulting services, training and product support, and hosting services and data center costs.

Cost of services and other revenue increased during the three and nine months ended August 30, 2024 as compared to the three and nine months ended September 1, 2023 primarily due to increases in compensation costs and professional fees.

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Operating Expenses for the Three and Nine Months Ended August 30, 2024 and September 1, 2023


(dollars in millions)	Three Months								Nine Months
	2024			2023			% Change		2024			2023			% Change
Research and development	$	1,022		$	881		16	%	$	2,945		$	2,584		14	%
Percentage of total revenue	19		%	18		%			19		%	18		%
Sales and marketing	1,431			1,337			7	%	4,228			3,983			6	%
Percentage of total revenue	26		%	27		%			27		%	28		%
General and administrative	366			353			4	%	1,073			1,041			3	%
Percentage of total revenue	7		%	7		%			7		%	7		%


Acquisition termination fee	—			—			—	%	1,000			—			**
Percentage of total revenue	*			*					6		%	*
Amortization of intangibles	43			42			2	%	127			126			1	%
Percentage of total revenue	1		%	1		%			1		%	1		%
Total operating expenses	$	2,862		$	2,613		10	%	$	9,373		$	7,734		21	%

_________________________________________

(*) Percentage is less than 1%.

(**) Percentage is not meaningful.

Research and Development

Research and development expenses consist primarily of compensation and contracted costs associated with software development, third-party hosting services and data center costs, related facilities costs and expenses associated with computer equipment and software used in development activities.

Research and development expenses increased during the three and nine months ended August 30, 2024 as compared to the three and nine months ended September 1, 2023 due to the following:


	Components of % Change 2024-2023 QTD		Components of % Change 2024-2023 YTD
Base compensation and related benefits	6	%	5	%
Incentive compensation, cash and stock-based	3		3
Hosting services and data center costs	5		4



Various individually insignificant items	2		2
Total change	16	%	14	%

Investments in research and development, including the recruiting and hiring of software developers, are critical to remain competitive in the marketplace and are directly related to continued timely development of new and enhanced offerings and solutions. We will continue to focus on long-term opportunities available in our end markets and make significant investments in the development of our subscription and service offerings, apps and tools.

Sales and Marketing

Sales and marketing expenses consist primarily of compensation costs, amortization of contract acquisition costs, including sales commissions, travel expenses and related facilities costs for our sales, marketing, order management and global supply chain management personnel. Sales and marketing expenses also include the costs of programs aimed at increasing revenue, such as advertising, trade shows and events, public relations and other market development programs.

Sales and marketing expenses increased during the three and nine months ended August 30, 2024 as compared to the three and nine months ended September 1, 2023 primarily due to increases in compensation costs.

General and Administrative

General and administrative expenses consist primarily of compensation and contracted costs, travel expenses and related facilities costs for our finance, facilities, human resources, legal, information services and executive personnel. General and administrative expenses also include outside legal and accounting fees, provision for bad debts, expenses associated with

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computer equipment and software used in the administration of the business, charitable contributions and various forms of insurance.

General and administrative expenses increased during the three and nine months ended August 30, 2024 as compared to the three and nine months ended September 1, 2023 primarily due to the following:


	Components of % Change 2024-2023 QTD		Components of % Change 2024-2023 YTD
Base compensation and related benefits	4	%	3	%
Incentive compensation, cash and stock-based	2		3
Charitable contributions	3		—
Professional and consulting fees	(6)		(5)







Various individually insignificant items	1		2
Total change	4	%	3	%

Acquisition Termination Fee

During the nine months ended August 30, 2024, we incurred a $1 billion termination fee which resulted from termination of the Figma transaction.

Non-Operating Income (Expense), Net for the Three and Nine Months Ended August 30, 2024 and September 1, 2023


(dollars in millions)	Three Months								Nine Months
	2024			2023			% Change		2024			2023			% Change
Interest expense	$	(51)		$	(27)		89	%	$	(119)		$	(85)		40	%
Percentage of total revenue	(1)		%	(1)		%			(1)		%	(1)		%
Investment gains (losses), net	12			6			**		34			12			**
Percentage of total revenue	*			*					*			*
Other income (expense), net	89			67			**		241			157			**
Percentage of total revenue	2		%	1		%			2		%	1		%
Total non-operating income (expense), net	$	50		$	46		**		$	156		$	84		**

_________________________________________

(*) Percentage is less than 1%.

(**) Percentage is not meaningful.

Interest Expense

Interest expense represents interest associated with our debt instruments. Interest on our senior notes is payable semi-annually, in arrears.

Interest expense increased during the three and nine months ended August 30, 2024 as compared to the three and nine months ended September 1, 2023 due to the senior notes issued in April 2024. See Note 14 for further details regarding our debt.

Investment Gains (Losses), Net

Investment gains (losses), net consists principally of unrealized holding gains and losses associated with our deferred compensation plan assets.

Other Income (Expense), Net

Other income (expense), net consists primarily of interest earned on cash, cash equivalents and short-term fixed income investments. Other income (expense), net also includes realized gains and losses on fixed income investments and foreign exchange gains and losses.

Other income (expense), net increased during the three and nine months ended August 30, 2024 as compared to the three and nine months ended September 1, 2023 primarily due to increases in interest income driven by higher average cash equivalent balances and average interest rates.

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Provision for Income Taxes for the Three and Nine Months Ended August 30, 2024 and September 1, 2023


(dollars in millions)	Three Months								Nine Months
	2024			2023			% Change		2024			2023			% Change
Provision for income taxes	$	358		$	340		5	%	$	1,063		$	1,046		2	%
Percentage of total revenue	7		%	7		%			7		%	7		%
Effective tax rate	18		%	20		%			22		%	21		%

Our effective tax rate decreased by approximately two percentage points and increased by approximately one percentage point for the three and nine months ended August 30, 2024, respectively, as compared to the three and nine months ended September 1, 2023. During the three and nine months ended August 30, 2024, there was an increase in the net tax benefits from effects of non-U.S. operations and stock-based compensation which decreased our effective tax rates. The increase in our effective tax rate during the nine months ended August 30, 2024 was primarily due to the Figma acquisition termination fee which was not deductible for financial statement purposes, partially offset by the previously noted items.

Our effective tax rate for the three months ended August 30, 2024 was lower than the U.S. federal statutory tax rate of 21% primarily due to the net tax benefits from effects of non-U.S. operations and the U.S. federal research tax credit, partially offset by state taxes. Our effective tax rate for the nine months ended August 30, 2024 was higher than the U.S. federal statutory tax rate of 21% primarily due to the Figma acquisition termination fee which was not deductible for financial statement purposes, partially offset by the previously noted items.

We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized based on evaluation of all available positive and negative evidence. On the basis of this evaluation, we continue to maintain a valuation allowance to reduce our deferred tax assets to the amount realizable. The total valuation allowance was $723 million as of August 30, 2024, primarily related to certain state credits and capital loss carryforwards.

We are a U.S.-based multinational company subject to tax in multiple domestic and foreign tax jurisdictions. The current U.S. tax law subjects the earnings of certain foreign subsidiaries to U.S. tax and generally allows an exemption from taxation for distributions from foreign subsidiaries.

In the current global tax policy environment, the domestic and foreign governing bodies continue to consider, and in some cases introduce, changes in regulations applicable to corporate multinationals such as Adobe. As regulations are issued, we account for finalized regulations in the period of enactment.

The provision from the U.S. Tax Act which requires us to capitalize and amortize research and development costs became effective in fiscal 2023. This requirement continues to have an adverse impact on our effective rates for income taxes paid, which is partially offset by a benefit to our effective tax rates from the increase in the foreign-derived intangible income deduction.

Accounting for Uncertainty in Income Taxes

The gross liabilities for unrecognized tax benefits excluding interest and penalties were $703 million and $436 million as of August 30, 2024 and September 1, 2023, respectively. If the total unrecognized tax benefits as of August 30, 2024 and September 1, 2023 were recognized, $539 million and $307 million would decrease the respective effective tax rates.

As of August 30, 2024 and September 1, 2023, the combined amounts of accrued interest and penalties included in long-term income taxes payable related to tax positions taken on our tax returns were not material.

The timing of the resolution of income tax examinations is highly uncertain as are the amounts and timing of tax payments that are part of any audit settlement process. These events could cause large fluctuations in the balance sheet classification of our tax assets and liabilities. We believe that within the next 12 months, it is reasonably possible that either certain audits will conclude or statutes of limitations on certain income tax examination periods will expire, or both. Although the timing of resolution, settlement and closing of audits is not certain, it is reasonably possible that the underlying unrecognized tax benefits may decrease by up to $50 million over the next 12 months.

Our future effective tax rates may be materially affected by changes in the tax rates in jurisdictions where our income is earned, changes in jurisdictions in which our profits are determined to be earned and taxed, changes in the valuation of our deferred tax assets and liabilities, changes in or interpretation of tax rules and regulations in the jurisdictions in which we do business, or unexpected changes in business and market conditions that could reduce certain tax benefits.

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In addition, tax laws in the United States as well as other countries and jurisdictions in which we conduct business are subject to change as new laws are passed and/or new interpretations are made available. These countries, governmental bodies, such as the European Commission of the European Union, and intergovernmental economic organizations, such as the Organization for Economic Cooperation and Development, have made or could make unprecedented assertions about how taxation is determined and, in some cases, have proposed or enacted new laws that are contrary to the way in which rules and regulations have historically been interpreted and applied. Changes in our operating landscape, such as changes in laws and/or interpretations of tax rules, could adversely affect our effective tax rates and/or cause us to respond by making changes to our business structure which could adversely affect our operations and financial results.

Moreover, we are subject to the examination of our income tax returns by domestic and foreign tax authorities. We regularly assess the likelihood of outcomes resulting from these examinations to determine the adequacy of our provision for income taxes and have reserved for potential adjustments that may result from these examinations. Our policy is to record interest and penalties related to unrecognized tax benefits in income tax expense. While we believe our tax estimates are reasonable, we cannot provide assurance that the final determination of any of these examinations will not have an adverse effect on our financial position and results of operations.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Our primary source of cash is receipts from revenue. Other customary sources of cash include proceeds from maturities and sales of short-term investments. Our primary uses of cash are general business expenses including payroll and related benefits costs, income taxes, marketing and third-party hosting services, as well as our stock repurchase program as described below. Other customary uses of cash include purchases of property and equipment and payments for taxes related to net share settlement of equity awards.

This data should be read in conjunction with our condensed consolidated statements of cash flows.


	As of
(in millions)	August 30, 2024		December 1, 2023
Cash and cash equivalents	$	7,193	$	7,141
Short-term investments	$	322	$	701
Working capital	$	1,072	$	2,833
Stockholders’ equity	$	14,545	$	16,518

A summary of our cash flows is as follows:


	Nine Months Ended
(in millions)	August 30, 2024		September 1, 2023
Net cash provided by operating activities	$	5,135	$	5,705
Net cash provided by investing activities	130		623
Net cash used for financing activities	(5,223)		(3,965)
Effect of foreign currency exchange rates on cash and cash equivalents	10		2
Net change in cash and cash equivalents	$	52	$	2,365

Cash Flows from Operating Activities

Net cash provided by operating activities of $5.14 billion for the nine months ended August 30, 2024 was primarily comprised of net income adjusted for the net effect of non-cash items. Payment of the $1 billion Figma termination fee during the nine months ended August 30, 2024 had an adverse impact on net income and cash flows from operations. Working capital uses of cash included increases in prepaid expenses and other assets, offset by decreases in trade receivables driven by strong collections.

Cash Flows from Investing Activities

Net cash provided by investing activities of $130 million for the nine months ended August 30, 2024 was primarily due to maturities and sales of short-term investments partially offset by ongoing capital expenditures.

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Cash Flows from Financing Activities

Net cash used for financing activities of $5.22 billion for the nine months ended August 30, 2024 was primarily due to payments for our common stock repurchases and taxes paid related to the net share settlement of equity awards. These uses of cash were offset in part by proceeds from the issuance of senior notes and re-issuance of treasury stock related to our employee stock purchase plan. See the sections titled “Senior Notes” and “Stock Repurchase Program” below.

Liquidity and Capital Resources Considerations

Our existing cash, cash equivalents and investment balances may fluctuate during fiscal 2024 due to changes in our planned cash outlay.

Cash from operations could also be affected by various risks and uncertainties, including, but not limited to, risks detailed in the section titled “Risk Factors” in titled Part II, Item 1A of this report. Based on our current business plan and revenue prospects, we believe that our existing cash, cash equivalents and investment balances, our anticipated cash flows from operations and our available revolving credit facility will be sufficient to meet our working capital, operating resource expenditure and capital expenditure requirements for the next twelve months and for the foreseeable future.

Our cash equivalent and short-term investment portfolio as of August 30, 2024 consisted of money market funds, U.S. Treasury securities, corporate debt securities, U.S. agency securities and asset-backed securities. We use professional investment management firms to manage a large portion of our invested cash.

We expect to continue our investing activities, including short-term and long-term investments, purchases of computer and server hardware to operate our network infrastructure, sales and marketing, product support and administrative staff. Furthermore, cash reserves may be used to repurchase stock under our stock repurchase program and to strategically acquire companies, products or technologies that are complementary to our business.

Revolving Credit Agreement

We have a $1.5 billion senior unsecured revolving credit agreement (the “Revolving Credit Agreement”) with a syndicate of lenders, providing for loans to us and certain of our subsidiaries through June 30, 2027. Subject to the agreement of lenders, we may obtain up to an additional $500 million in commitments, for a maximum aggregate commitment of $2 billion. As of August 30, 2024, there were no outstanding borrowings under the Revolving Credit Agreement and the entire $1.5 billion credit line remains available for borrowing. Under the terms of our Revolving Credit Agreement, we are not prohibited from paying cash dividends unless payment would trigger an event of default or if one currently exists. We do not anticipate paying any cash dividends in the foreseeable future.

Commercial Paper Program

We have a commercial paper program under which we may issue unsecured commercial paper up to a total of $3 billion outstanding at any time, with maturities of up to 397 days from the date of issue. The net proceeds from the issuance of commercial paper are expected to be used for general corporate purposes, which may include working capital, capital expenditures, acquisitions, stock repurchases, refinancing indebtedness or any other general corporate purposes. As of August 30, 2024, there were no outstanding borrowings under the commercial paper program.

Senior Notes

In April 2024, we issued $500 million of senior notes due April 4, 2027, $750 million of senior notes due April 4, 2029 and $750 million of senior notes due April 4, 2034. In total, we have $5.65 billion senior notes outstanding, which rank equally with our other unsecured and unsubordinated indebtedness. As of August 30, 2024, the carrying value of our senior notes was $5.63 billion and our maximum commitment for interest payments was $855 million for the remaining duration of our outstanding senior notes. Interest is payable semi-annually, in arrears. Our senior notes do not contain any financial covenants. See Note 14 of our notes to condensed consolidated financial statements for further details regarding our debt.

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Contractual Obligations

Our principal commitments as of August 30, 2024 consisted of purchase obligations resulting from agreements to purchase goods and services in the ordinary course of business and obligations under operating lease arrangements. During the first quarter of fiscal 2024, we executed agreements associated with certain of our long-term supplier commitments that increased our minimum purchase obligations by $2.3 billion through December 2028. There have been no other material changes in those obligations during the nine months ended August 30, 2024.

Stock Repurchase Program

During the nine months ended August 30, 2024, we entered into accelerated share repurchase agreements (“ASRs”) with large financial institutions whereupon we provided them with prepayments totaling $7 billion.

During the nine months ended August 30, 2024, we repurchased a total of 12.9 million shares, including approximately 0.6 million shares at an average price of $626.68 through a structured repurchase agreement entered into during fiscal 2023, 3.5 million shares at an average price of $578.11 through an ASR entered into in December 2023, 5.2 million shares at an average price of $475.94 through an ASR entered into in March 2024, and 3.6 million shares from the initial delivery of an ASR entered into in June 2024. Subsequent to August 30, 2024, the ASR entered into in June 2024 was settled which resulted in total repurchases of 4.6 million shares at an average price of $546.30.

See Note 11 of our notes to condensed consolidated financial statements for further details regarding our stock repurchase program.

Indemnifications

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risk exposures for the nine months ended August 30, 2024, as compared to those discussed in our Annual Report on Form 10-K for the fiscal year ended December 1, 2023.

ITEM 4. CONTROLS AND PROCEDURES

Based on their evaluation as of August 30, 2024, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective at the reasonable assurance level to ensure that the information required to be disclosed by us in this Quarterly Report on Form 10-Q was (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting during the quarter ended August 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Adobe have been detected.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 13 of our notes to condensed consolidated financial statements for information regarding our legal proceedings.

ITEM 1A. RISK FACTORS

As previously discussed, our actual results could differ materially from our forward-looking statements. Below we discuss some of the factors that could cause these differences. The occurrence of these and many other factors described in this report, and factors that we do not presently know or that we currently believe to be immaterial, could materially and adversely affect our operations, performance and financial condition. Many factors affect more than one category and the factors are not in order of significance or probability of occurrence because they have been grouped by categories.

Risks Related to Our Ability to Grow Our Business

We may be unsuccessful at innovating in response to rapid technological changes to meet customer needs, which could cause our operating results to suffer.

We operate in rapidly evolving markets and expect the pace of innovation to continue to accelerate. We must continually introduce new, and enhance existing, products, services and solutions to retain customers and attract new customers. Developing new products is complex and may not be profitable, and our investments in new technologies are speculative and may not yield the expected business or financial benefits. The commercial success of new or enhanced products, services and solutions depends on a number of factors, including timely and successful development; effective distribution and marketing; market acceptance; compatibility with existing and emerging standards, platforms, software delivery methods and technologies; accurately predicting and anticipating customer needs and expectations and the direction of technological change; identifying and innovating in the right technologies; and differentiation from other products, services and solutions. If we fail to anticipate or identify technological trends or fail to devote appropriate resources to adapt to such trends, our business could be harmed. For example, generative artificial intelligence technologies provide new ways of marketing, creating content and interacting with documents that could disrupt industries in which we operate, and our business may be harmed if we fail to invest or adapt. While we have released new generative artificial intelligence products, such as Adobe Firefly, and are focused on enhancing the artificial intelligence (“AI”) capabilities of such products and incorporating AI into existing products, services and solutions, there can be no assurance that our products will be successful or that we will innovate effectively to keep pace with the rapid evolution of AI across our Creative Cloud, Document Cloud and Experience Cloud. If we do not successfully innovate, adapt to rapid technological changes and meet customer needs, our business and our financial results may be harmed.

Issues relating to the development and use of AI, including generative AI, in our offerings may result in reputational harm, liability and adverse financial results.

Social and ethical issues relating to the use of AI, including generative AI, in our offerings may result in reputational harm, liability and additional costs. We are increasingly incorporating AI technologies into many of our offerings. If our AI development, deployment, content labeling or governance is ineffective or inadequate, it may result in incidents that impair the public acceptance of AI solutions or cause harm to individuals, customers or society, or result in our offerings not working as intended or producing unexpected outcomes.

Around the world, AI regulation is in the nascent stages of development. The evolving AI regulatory environment may increase our research and development costs, increase our liability related to the use of AI by our customers or users that are beyond our control and result in inconsistencies in evolving legal frameworks across jurisdictions. While we have taken a responsible approach to the development and use of AI in our offerings, there can be no guarantee that future AI regulations will not adversely impact us or conflict with our approach to AI, including affecting our ability to make our AI offerings available without costly changes, requiring us to change our AI development practices, monetization strategies and/or indemnity protections and subjecting us to additional compliance requirements, regulatory action, competitive harm or legal liability. In addition, new competition regulation on AI development and deployment could impose new requirements on our markets that could impact our business and financial results.

Uncertainty around new and evolving AI use, including generative AI, may require additional investment to develop responsible use frameworks, develop or license proprietary datasets and machine learning models and develop new approaches and processes to attribute or compensate content creators, which could be costly. Developing, testing and deploying AI systems may also increase the cost of our offerings, including due to the nature of the computing costs involved in such systems. These costs could adversely impact our margins as we continue to add AI capabilities to our offerings and scale our AI offerings

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without assurance that our customers and users will adopt them. Further, as with any new offerings based on new technologies, consumer reception and monetization pathways are uncertain, our strategies may not be successful and our business and financial results could be adversely impacted. New AI offerings and technologies could disrupt workforce needs, result in negative publicity about AI and have the potential to affect demand for our existing products, services and solutions, all of which could adversely impact our business.

We may not realize the anticipated benefits of investments or acquisitions, and they may disrupt our business and divert management’s attention.

Investments and acquisitions involve numerous risks and uncertainties, the occurrence of which may have an adverse effect on our business. These risks and uncertainties include:

•inability to achieve the financial and strategic goals of the investment or acquisition;

•difficulty in effectively integrating the operations, technologies, products, services, solutions, culture or personnel of the acquired business;

•disruption of our ongoing business and distraction of our management and other personnel;

•challenges to completing or failure to complete an announced investment or acquisition related to the failure to obtain regulatory approval, or the need to satisfy certain conditions precedent to closing such transaction (such as divestitures, ownership or operational restrictions or other structural or behavioral remedies) that could limit the anticipated benefits of the transaction;

•entry into markets in which we have minimal prior experience and where competitors in such markets have stronger market positions;

•inability to retain personnel, key customers, distributors, vendors and other business partners of the acquired business;

•delay in customer and distributor purchasing decisions due to uncertainty about the direction of our product and service offerings;

•incurring higher than anticipated costs to effectively integrate an acquired business, to bring an acquired company into compliance with applicable laws and regulations, additional compensation issued or assumed in connection with an acquisition, to divest products, services or solutions acquired in unsuccessful investments or acquisitions, to amortize costs for acquired intangible assets or because of our inability to take advantage of anticipated tax benefits;

•increased collection times, elevated delinquency or bad debt write-offs related to receivables of an acquired business we assume;

•difficulty in maintaining controls, procedures and policies during the transition and integration and inability to conclude that our internal controls over financial reporting are effective;

•potential identified or unknown security vulnerabilities in acquired products that expose us to additional security risks or delay our ability to integrate the product into our offerings;

•exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition;

•incurrence of additional debt to finance an acquisition, which will increase our interest expense and leverage, and/or issuance of equity securities to finance acquisitions, which will dilute current shareholders’ percentage ownership and earnings per share; and

•failure to identify significant problems, liabilities or other challenges during due diligence.

Our ability to acquire other businesses or technologies, make strategic investments or integrate acquired businesses effectively may also be impaired by adverse economic and political events, including trade tensions, and increased global scrutiny of acquisitions and strategic investments. A number of countries, including the United States and countries in Europe and the Asia-Pacific region, are considering or have adopted more stringent restrictions or guidelines for such transactions. Governments may continue to adopt or tighten restrictions of this nature, and such restrictions or government actions could negatively impact our business and financial results. Further, if we are not able to complete an announced acquisition or investment, or we do not achieve the financial and strategic goals of an acquisition or investment, we may not realize the

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anticipated benefits of such acquisition or investment or we may incur additional costs, which may negatively impact our business and financial results.

We participate in rapidly evolving and intensely competitive markets, and, if we do not compete effectively, our operating results could suffer.

The markets for our products, services and solutions are rapidly evolving and intensely competitive. We expect competition to continue to intensify. Our competitors range in size from diversified global companies with significant sales and research and development resources, broad brand awareness, long operating histories or access to large customer bases to small, specialized companies whose narrow focuses may allow them to be more effective in deploying technical, marketing and financial resources. Our competitors may develop products, services or solutions that are similar to ours or that achieve greater acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies. As a result, current and potential customers may select the products, services or solutions of our competitors. Further, our future success depends on our continued ability to effectively appeal to businesses and consumers. New industry standards, evolving distribution models, limited barriers to entry, short product life cycles, customer price sensitivity, global market conditions and the frequent entry of new products or competitors may create downward pressure on pricing and gross margins and adversely affect our renewal, upsell and cross-sell rates as well as our ability to attract new customers. In addition, we expect to face more competition as AI continues to be integrated into the markets in which we compete. Our competitors or other third parties may incorporate AI into their offerings more successfully than we do and achieve greater and faster adoption, which could impair our ability to compete effectively and adversely affect our business and financial results. Further, we expect the markets for standalone AI offerings to be highly competitive and rapidly evolving. For example, we face increasing competition from companies offering text-to-image generative AI technology that may compete directly with our own creative offerings. If we are not able to provide products, services and solutions that compete effectively, we could experience reduced sales and our business could be adversely affected. For additional information regarding our competition and the risks arising out of the competitive environment in which we operate, see the section titled “Competition” contained in Part I, Item 1 of our Annual Report on Form 10-K.

If our reputation or our brands are damaged, our business and financial results may be adversely affected.

We believe our reputation and brands have been, and we expect them to continue to be, important to our business and financial results. Maintaining and enhancing our brands may require us to make substantial investments and these investments may not be successful. There are numerous ways that our reputation or brands could be damaged, including, among other things, introduction of new products, features or services that do not meet customer expectations; our position on or approach to new and evolving technologies; backlash from customers, government entities or other stakeholders that disagree with our product offering decisions or public policy positions; significant litigation or regulatory actions that negatively reflect on our business practices; our action or inaction or actual or perceived failure to meet our commitments on environmental, social and governance, ethical or political issues; public scrutiny regarding our handling of user privacy, data practices or content; data security breaches or compliance failures; or our approach to AI. Further, our brands may be negatively affected by uses of our products, services or solutions, particularly our AI offerings, in ways that are out of our control, such as to create or disseminate content that is deemed to be misleading, deceptive or intended to manipulate public opinion, or for illicit, objectionable or illegal ends, or by our failure to respond appropriately and in a timely manner to such uses. Such uses may result in controversy or claims related to defamation, rights of publicity, illegal content, intellectual property infringement, harmful content, misinformation and disinformation, harmful bias, misappropriation, data privacy, derivative uses of third-party AI and personal injury torts. If we fail to appropriately respond to objectionable content created using our products, services or solutions or shared on our platforms, our users may lose confidence in our brands. Entry into markets with weaker protection of brands or changes in the legal systems in countries in which we operate may also impact our ability to protect our brands. If we fail to maintain, enhance or protect our brands, or if we incur excessive expenses in our efforts to do so, our business and financial results may be adversely affected.

Risks Related to the Operation of Our Business

Service interruptions or failures of our or third-party information technology systems may impair the availability of our products, services and solutions, which may expose us to liability, damage our reputation and harm our future financial results.

Much of our business, including our online store at adobe.com and our Creative Cloud, Document Cloud and Experience Cloud solutions, relies on hardware and services that are hosted, managed and controlled directly by us or third-party service providers to be available to customers and users without disruption. We do not have redundancy for all our systems, many of our critical applications (“apps”) reside in only one of our data centers, and our disaster recovery planning may not account for all eventualities. If any critical third-party service provider of hosting or content delivery services is negatively affected or

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becomes unavailable to us for any reason, we may not be able to deliver the corresponding products, services or solutions to our customers and users. Failure of our systems or those of our third-party service providers could disrupt our business operations and those of our customers, subject us to reputational harm, require costly and time-intensive notifications, and cause us to lose customers, users and future business. Occasionally, we migrate data among data centers and to third-party hosted environments. If a transition among data centers or to third-party service providers encounters unexpected interruptions, unforeseen complexity or unplanned disruptions despite precautions undertaken during the process, this may impair our delivery of products, services and solutions to customers and result in increased costs and liabilities, which may harm our operating results, reputation and our business.

It is also possible that hardware or software failures or errors in our systems (or those of our third-party service providers) could result in data loss or corruption, cause the information that we collect or maintain to be incomplete or contain inaccuracies that our customers regard as significant, or cause us to fail to meet committed service levels or comply with applicable notification requirements or other relevant contractual obligations to our customers. Furthermore, our ability to collect and report data may be delayed or interrupted by a number of factors, including access to the internet, the failure of our network or software systems, security breaches or significant variability in visitor traffic on customer websites. We may also find, on occasion, that we cannot deliver data and reports to our customers in near real-time due to factors such as significant spikes in customer activity on their websites or failures of our network or software (or that of a third-party service provider). If we fail to plan infrastructure capacity appropriately and expand it proportionally with the needs of our customer and user base, and we experience a rapid and significant demand on the capacity of our data centers or those of third parties, service outages or performance issues could occur, which may impact our customers. Such a strain on our infrastructure capacity may subject us to regulatory and customer notification requirements, violations of service level agreement commitments or financial liabilities and result in customer dissatisfaction or harm our business. If we supply materially inaccurate information or experience significant interruptions in our systems, our reputation could be harmed, we could lose customers and we could be found liable for damages or incur other losses.

Security incidents, improper access to or disclosure of our customers’ data or other cyber incidents may harm our reputation and materially and adversely affect our business.

Our products, services and solutions collect, store, manage and otherwise process third-party data, including our customers’ data and our own data. Such products, services and solutions as well as our technologies, systems and networks have been subject to, and may in the future be subject to, cyberattacks, computer viruses, ransomware or other malware, fraud, worms, social engineering, denial-of-service attacks, malicious software programs, insider threats and other cybersecurity incidents that have in the past, and may in the future, result in the unauthorized access, disclosure, acquisition, use, loss or destruction of sensitive personal or business data belonging to us and our customers.

Cybersecurity incidents can be caused by human error from our workforce or that of our third-party service providers, by malicious third parties, acting alone or in groups, or by more sophisticated organizations, including nation-states and state-sponsored organizations. Such risks may be elevated in connection with geopolitical tensions, including the Russia-Ukraine war. Certain unauthorized parties have in the past managed, and may in the future manage, to overcome our security measures and those of our third-party service providers to access and misuse systems and software by exploiting defects in design or manufacture, including bugs, vulnerabilities and other problems that unexpectedly compromise the security or operation of a product or system. Further, malicious third parties have in the past attempted, and may in the future attempt, to fraudulently induce our employees or users of our products, services or solutions to disclose sensitive, personal or confidential information via illegal electronic spamming, phishing or other tactics, and this risk is heightened in our current hybrid model working environment. Malicious actors may engage in fraudulent or abusive activities through our products, services and solutions, including unauthorized use of accounts through stolen credentials, use of stolen credit cards or other payment vehicles, failure to pay for services accessed, or other activities that violate our terms of service. While we actively combat such fraudulent activities, we have experienced, and may in the future experience, impacts to our revenue from such activities. Further, unauthorized parties may also gain physical access to our facilities and infiltrate our information systems or attempt to gain logical access to our products, services or information systems to access content and data. The loss of or unauthorized access to data, such as resulting from computer viruses, worms, ransomware or other malware may harm our systems, expose us to litigation or regulatory investigation and subject us to costly and time-intensive notification requirements.

We devote significant resources to address security vulnerabilities through engineering more secure products, enhancing security and reliability features in our products and systems, code hardening, conducting rigorous penetration tests, deploying updates to address security vulnerabilities, regularly reviewing our service providers’ security controls, reviewing and auditing our products, services and solutions against information security control frameworks, providing resources, such as security training, to our workforce, and continually assessing and improving, as appropriate, our incident response process. Despite our preventative efforts, there is no assurance that our security measures will provide full effective protection from such events. The costs to prevent, eliminate, mitigate or remediate cybersecurity or other security problems and vulnerabilities are significant and

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may reduce our operating margins. Further, our efforts to address these problems, including notifying affected third parties when appropriate, have in the past been, and may in the future be, unsuccessful or delayed, which could result in business interruptions, cessation of service and loss of existing or potential customers.

Maintaining the security of our products, services and solutions is a critical issue for us and our customers. It is impossible to predict the extent, frequency or impact cybersecurity issues may have on us. Breaches of our security measures and the accidental loss, inadvertent disclosure or unauthorized dissemination of proprietary information or sensitive, personal or confidential data about us, our employees, our customers or their end users, including the potential loss or disclosure of such information or data could expose us, our employees, our customers or other individuals affected to a risk of loss or misuse of this information. Actual or perceived security vulnerabilities or incidents may result in claims or litigation and liability or fines (and have in the past led to such claims), costly and time-intensive notice requirements, governmental inquiry or oversight or a loss of customer confidence, any of which could harm our business and damage our brand and reputation. Our customers may also adopt security measures to protect their computer systems and their instances of our software from attack and may suffer a cybersecurity attack on their own systems, unrelated to our systems. Even if such breach is unrelated to our security systems, solutions or programs, such breach could cause us reputational harm and require us to incur significant economic and operational consequences to adequately assess and respond to their breach, and to implement additional safeguards designed to protect against future breaches.

While we maintain insurance to cover operational risks, such as cyber risk and technology outages, our insurance may not be sufficient to cover all liability described herein. These risks will likely increase as we expand our hosted offerings, integrate our products, services and solutions and store and process more data. Moreover, delayed sales, lower margins or lost customers resulting from disruptions caused by cyberattacks, overly burdensome preventative security measures or failure to fully meet information security control certification requirements could materially and adversely affect our financial results, stock price and reputation.

If we are unable to develop, manage and maintain critical third-party relationships, such as our sales, partner and distribution channels, suppliers and service providers, our revenue and business may be adversely affected.

We contract with a number of software distributors and other third parties to distribute our products, services and solutions, none of which are individually responsible for a material amount of our total net revenue in any recent period. Successfully managing our distribution channels and sales partners to reach various customers for our products, services and solutions is a complex and global process. If an agreement with one of our distributors or partners was terminated, any prolonged delay in securing a replacement distributor or partner could have a negative impact on our results of operations. We also face legal risk and potential reputational harm from the activities of these independent third parties including, but not limited to, export control violations, workplace conditions, corruption and anti-competitive behavior.

If our partner and distribution channels are not effective or if we stop or change our partner or distribution channels, we may lose sales opportunities, customers and revenue. We rely on third-party distribution platforms and are subject to changes in pricing structure, terms of service, privacy practices and other policies at the discretion of the platform provider. Any adverse changes to the terms with such third-party distribution platforms which we rely on to distribute our products, services and solutions may adversely affect our financial results. Additionally, our distribution channels may not continue to market or sell our products, services and solutions effectively and may favor products, services and solutions of other companies.

We sell many products, services and solutions through our direct sales force. Risks associated with this sales channel include challenges related to hiring, retaining and motivating our direct sales force, and substantial amounts of ongoing training for sales representatives. Our business could be harmed if our direct sales expansion efforts do not generate the corresponding efficiencies and revenue we anticipated from such investment. In addition, the loss of key sales employees could impact our customer relationships and future ability to sell to certain accounts covered by such employees.

We rely on third-party service providers and technologies to deliver our products, services and business operations and to operate critical business systems, such as cloud-based infrastructure, data center facilities, encryption and authentication technology and company email, communications with customers. If such third parties are negatively affected, if we fail to effectively develop, manage and maintain our relationships with such third parties, or if we are unable to renew our agreements with them on favorable terms or at all, our expenses could significantly increase, and we and our customers may experience service interruptions. Any disruption or damage to, or failure of our systems generally, including the systems of our third-party platform providers, could result in interruptions in our services and harm our business. Further, interruptions in our services caused by us or our third-party service providers may cause us to issue credits or pay penalties, cause customers to make warranty or other claims against us or to terminate their subscriptions or contracts, and adversely affect our attrition rates and our ability to attract new customers, all of which may adversely affect our financial results. Our business and reputation would also be harmed if our customers and potential customers believe our services are unreliable.

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We face various risks associated with our operating as a multinational corporation, and global adverse economic conditions may harm our business and financial condition.

We derive a large portion of our total revenue from, and have significant operations, outside of the United States. As a multinational corporation, we are subject to a number of risks, including from global adverse economic conditions, that are uncertain and beyond our control and that make forecasting operating results and decisions about future investments difficult, such as:

•inflation and actions taken by central banks to counter inflation, including increasing interest rates;

•international and regional economic, political and labor conditions, including any instability or security concerns abroad, such as uncertainty caused by economic sanctions, downturns and recessions, trade disputes, armed conflicts and wars;

•tax laws (including U.S. taxes on foreign subsidiaries);

•increased financial accounting and reporting burdens and complexities;

•changes in, or impositions of, legislative or regulatory requirements, including antitrust and competition regulations;

•changes in laws governing the free flow of data across international borders;

•inadequate local infrastructure and difficulties in managing and staffing international operations;

•costs, potential liability, delays or loss of sales resulting from trade restrictions imposed by the United States and other countries, as well as trade laws, including but not limited to economic sanctions and export controls;

•costs and delays associated with developing products in multiple languages; and

•operating in locations with a higher rate of corruption and fraudulent business practices.

Additionally, third parties we do business with and our customers have international operations and are also subject to the above risks. Adverse changes in global economic conditions have in the past resulted and may in the future result in our customers’ and business partners’ insolvency, inability to obtain credit to finance or purchase our products, services and solutions, or a delay in paying or an inability to pay their obligations to us. Other third parties, such as our service providers, suppliers and distributors, may be unable to deliver or be delayed in delivering critical services, products or technologies that we rely on, and our business and reputation may be harmed. Our customers’ spending rate and demand for our products, services and solutions may also be adversely affected by the above risks. If our global sales are reduced, delayed or canceled because of any of the above risks, our revenue may decline.

Further, a disruption in global financial markets could impair our banking partners, on which we rely for operating cash management, capital market transactions and derivative programs. Such disruption could also negatively impact our customers’ ability to pay us due to delays or inability to access their existing cash.

As of August 30, 2024, our investment portfolio consisted of money market funds, U.S. Treasury securities, corporate debt securities, U.S. agency securities and asset-backed securities. These investments are subject to credit, liquidity, market, and interest rate risks as well as economic downturns or events that affect global or regional financial markets that may cause the value of our investments to decline, requiring impairment charges, which could adversely affect our financial condition.

If we are unable to recruit and retain key personnel, our business may be harmed, and our hybrid work model may present challenges, which could adversely impact our business.

Much of our future success depends on the continued service, availability and performance of our senior management and highly skilled personnel across all levels of our organization. Our senior management has acquired specialized knowledge and skills with respect to our business, and the loss of any of these individuals could harm our business, especially if we are not successful in developing adequate succession plans. Our efforts to attract, develop, integrate and retain highly skilled employees may be compounded by intensified restrictions on travel, immigration or the availability of work visas. The technology industry is often subject to substantial and continuous competition for talent, particularly with cybersecurity and AI backgrounds, and demand for cutting-edge or unique skill sets can be highly competitive, both of which are heightened with the increased availability of hybrid or remote working arrangements. We face an increasingly difficult challenge to attract and retain highly qualified security personnel to assist us in combating security threats. We may experience higher compensation costs to retain and recruit senior management and highly skilled personnel that may not be offset by improved productivity or increased sales.

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Our hybrid work environment may also present operational and workplace culture challenges, which could negatively affect our ability to execute against our business objectives and retain and recruit personnel.

We continue to hire personnel in countries where exceptional technical knowledge and other expertise are offered at lower costs, which increases the efficiency of our global workforce structure and reduces our personnel-related expenditures. Nonetheless, as globalization continues, competition for talent in those countries has increased, which may impact our ability to retain these employees and increase our compensation-related expenses.

Some of our enterprise offerings have extended and complex sales cycles, which may increase our costs and make our sales cycles unpredictable.

As we continue to target large enterprise customers for certain of our offerings, including Adobe Experience Cloud in our Digital Experience business and our Enterprise Term License Agreements in our Digital Media business, we may face increased costs, longer sales cycles, greater competition and less predictability in completing our sales. For our enterprise customers, the evaluation process may be longer and more involved, and require us to invest more in educating our customers about our products, services and solutions, particularly because the decision to use our products, services and solutions is often an enterprise-wide decision. We may be required to submit more robust proposals, participate in extended proof-of-concept evaluation cycles and engage in more extensive contract negotiations. In addition, our enterprise customers often demand more complex configurations and additional integration services and product features. Adverse macroeconomic conditions have caused, and may cause in the future, delays in our enterprise customers’ purchasing decisions. Due to these factors, we often must devote greater sales support to certain enterprise customers, which increases our costs and time required to complete a sale, without assurance that potential customers will ultimately purchase our solutions. We also may be required to devote more services resources to implementation, which increases our costs, without assurance that customers receiving these services will renew or renew at the same level. Since the sales cycles for our enterprise offerings are multi-phased and complex, it is often unpredictable when a given sales cycle will close. Our revenue from enterprise customers may be affected by longer-than-expected sales and implementation cycles, extended collection cycles, potential deferral of revenue and alternative licensing arrangements. Additionally, our enterprise sales pattern has historically been uneven, where a higher percentage of a quarter’s total sales occur during the final weeks of each quarter, which is common in our industry.

Risks Related to Laws and Regulations

We are subject to risks associated with compliance with laws and regulations globally, which may harm our business.

We are a global company subject to varied and complex laws, regulations and customs, both domestically and internationally. These laws and regulations relate to a number of aspects of our business, including trade compliance, import and export control, anti-boycott, economic sanctions and embargoes, data and transaction processing security, payment card industry data security standards, consumer protection, records management, user-generated content hosted on websites we operate, privacy practices, data residency, corporate governance, antitrust and competition, employee and third-party complaints, anti-corruption, gift policies, conflicts of interest, securities regulations and other regulatory requirements affecting trade and investment. The application of these laws and regulations to our business is often unclear and may at times conflict. For example, we are subject to the U.S. Foreign Corrupt Practices Act and other anti-corruption and anti-bribery laws, but in other foreign countries, particularly those with developing economies, it is common to engage in practices that would be prohibited under such acts. We cannot provide assurance that our employees, contractors, agents, business partners and vendors will not take actions in violation of our internal policies, U.S. laws or other applicable international laws. Compliance with these laws and regulations may involve significant costs or require changes in our business practices that result in reduced revenue and profitability. Non-compliance could also result in fines, damages, criminal sanctions against us, our officers or our employees, prohibitions on the conduct of our business and damage to our reputation.

In addition, approximately 50% of our employees are located outside the United States. Accordingly, we are exposed to changes in laws governing our employee relationships in various U.S. and foreign jurisdictions, including laws and regulations regarding wage and hour requirements, fair labor standards, employee data privacy, unemployment tax rates, workers’ compensation rates, citizenship requirements and payroll and other taxes, which likely would have a direct impact on our operating costs.

Increasing regulatory focus on privacy and security issues and expanding laws and regulatory requirements could impact our business models and expose us to increased liability.

We are subject to global data protection, privacy and security laws, regulations and codes of conduct that relate to our various business units and data processing activities, which may include sensitive, confidential, and personal information. These laws, regulations and codes are inconsistent across jurisdictions and are subject to evolving and differing (sometimes conflicting) interpretations. Government officials and regulators, privacy advocates and class action attorneys are increasingly

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scrutinizing how companies collect, process, use, store, share and transmit personal data. This scrutiny can result in new and shifting interpretations of existing laws, thereby further impacting our business. For example, the General Data Protection Regulation (“GDPR”) in the European Economic Area, and the United Kingdom continues to be interpreted by European and UK courts in novel ways leading to shifting requirements, country specific differences in application and uncertain enforcement priorities. More recently enacted laws, such as the Personal Information Protection Law in China, and new and emerging state laws in the United States on privacy, data and related technologies, such as the California Consumer Privacy Act, the California Privacy Rights Act, the Colorado Privacy Act and the Virginia Consumer Data Protection Act, as well as industry self-regulatory codes and regulatory requirements, create new privacy and security compliance obligations and expand the scope of potential liability, either jointly or severally with our customers and suppliers. As a security example, pursuant to the U.S. Securities and Exchange Commission’s Rules on Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure we are required to make certain disclosures related to material cybersecurity incidents and the reasonably likely impact of such an incident on Form 8-K and will be required to make certain other cybersecurity disclosures on Form 10-K. Determining whether a cybersecurity incident is notifiable or reportable may not be straightforward and any such mandatory disclosures could be costly and lead to negative publicity, loss of customer confidence in the effectiveness of our security measures, diversion of management’s attention and governmental investigations.

While we have invested in readiness to comply with applicable requirements, the dynamic and evolving nature of these laws, regulations and codes, as well as their interpretation by regulators and courts, may affect our ability (and our enterprise customers’ ability) to reach current and prospective customers, to respond to both enterprise and individual customer requests under the laws (such as individual rights of access, correction and deletion of their personal information), to implement our business models effectively and to adequately address disclosure requirements. These laws, regulations and codes may also impact our innovation and business drivers in developing new and emerging technologies (for example, AI and machine learning) and may impact demand for our offerings and force us to bear the burden of more onerous obligations in our contracts. Perception of our practices, products, services or solutions, even if unfounded, as a violation of individual privacy, data protection rights or cybersecurity requirements, subjects us to public criticism, lawsuits, investigations, claims and other proceedings by regulators, industry groups or other third parties, all of which could disrupt or adversely impact our business and reputation and expose us to increased liability, fines and other punitive measures including prohibition on sales of our products, services or solutions, restrictive judicial orders and disgorgement of data. Additionally, we collect and store information on behalf of our business customers and if our customers fail to comply with contractual obligations or applicable laws, it could result in litigation or reputational harm to us.

Transferring personal information across international borders is complex and subject to legal and regulatory requirements as well as active litigation and enforcement in a number of jurisdictions around the world, each of which could have an adverse impact on our ability to process and transfer personal data as part of our business operations. For example, European data transfers outside the European Economic Area are highly regulated and litigated. The mechanisms that we and many other companies rely upon for European data transfers (for example, Standard Contractual Clauses and the EU - US Data Privacy Framework) are the subject of legal challenge, regulatory interpretation and judicial decisions by the Court of Justice of the European Union. The suitability of Standard Contractual Clauses for data transfer in some scenarios has recently been the subject of legal challenge, and while the United States and the European Union reached agreement on the EU - US Data Privacy Framework, there are legal challenges to that data transfer mechanism as well. We continue to closely monitor for developments related to valid transfer mechanisms available for transferring personal data outside the European Economic Area (including the EU - US Data Privacy Framework) and other countries that have similar trans-border data flow requirements and adjust our practices accordingly. The open judicial questions and regulatory interpretations related to the validity of transfers using Standard Contractual Clauses have resulted in some changes in the obligations required to provide our services in the European Union and could expose us to potential sanctions and fines for non-compliance. Several other countries, including China, Australia, New Zealand, Brazil, Hong Kong and Japan, have also established specific legal requirements for cross-border transfers of personal information and certain countries have also established specific legal requirements for data localization (such as where personal data must remain stored in the country). If other countries implement more restrictive regulations for cross-border data transfers or do not permit data to leave the country of origin, such developments could adversely impact our business and our enterprise customers’ business, our financial condition and our results of operations in those jurisdictions.

Our intellectual property portfolio is a valuable asset and we may not be able to protect our intellectual property rights, including our source code, from infringement or unauthorized copying, use or disclosure.

Our patents, trademarks, trade secrets, copyrights and other intellectual property are valuable assets to us. Infringement or misappropriation of such intellectual property could result in lost revenues and ultimately reduce their value. We protect our intellectual property by relying on federal, state and common law rights in the United States and internationally, as well as a variety of administrative procedures and contractual restrictions. Despite our efforts, protecting our intellectual property rights and preventing unauthorized use of our intellectual property are inherently difficult. For instance, we actively combat software

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piracy, but we continue to lose revenue due to illegal use of our software. Third parties may illegally copy and sell counterfeit versions of our products. To the extent counterfeit installations and sales replace otherwise legitimate ones, our operating results could be adversely affected. We apply for patents in the United States and in foreign countries, but we are not always successful in obtaining patent protection or in obtaining such protection timely to meet our business needs. Our patents may be invalidated or circumvented. Moreover, due to challenges in detecting patent infringement pertaining to generative AI technologies, it may be more difficult to protect our generative AI and related innovations with patents. Additionally, if we use generative AI in the creation of our source code, we may not be able to rely on copyright to protect such intellectual property. Further, the laws of some foreign countries do not provide the same level of intellectual property protection as U.S. laws and courts and could fail to adequately protect our intellectual property rights. If unauthorized disclosure of our source code occurs through security breach, cyber-attack or otherwise, we could lose future trade secret protection for that source code. Such loss could make it easier for third parties to compete with our products by copying functionality, which could cause us to lose customers and could adversely affect our revenue and operating margins. If we cannot protect our intellectual property against unauthorized copying, use, or other misappropriation, our business could be harmed.

We are, and may in the future become, subject to litigation, regulatory inquiries and intellectual property infringement claims, which could result in an unfavorable outcome and have an adverse effect on our business, financial condition, results of operation and cash flows.

We are subject to various legal proceedings (including class action lawsuits), claims and regulatory inquiries that are not yet resolved and additional claims, enforcement actions and inquiries may arise in the future. Any proceedings, actions, claims or inquiries initiated by or against us, whether successful or not, may be time consuming; result in costly litigation, damage awards, consent decrees, injunctive relief or increased costs of business; require us to change our business practices or products; result in negative publicity; require significant amounts of management time; result in the diversion of significant operational resources, or otherwise harm our business and financial results.

Additionally, we are currently, and may in the future be subject to claims, negotiations and complex, protracted litigation relating to disputes regarding the validity or alleged infringement of third-party intellectual property rights, including patent rights. Intellectual property disputes and litigation are typically costly and can be disruptive to our business operations by diverting the attention of management and key personnel. Third-party intellectual property disputes, including those initiated by patent assertion entities, could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from offering certain products, services or solutions, subject us to injunctions restricting our sales, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy indemnification commitments with our customers, including contractual provisions under various license arrangements and service agreements. In addition, we have incurred, and may in the future incur, significant costs in acquiring the necessary third-party intellectual property rights for use in our products, in some cases to fulfill contractual obligations with our customers. Any of these occurrences could significantly harm our business.

We have not prevailed, and may not in the future prevail, in every lawsuit or dispute. For further information about specific litigation and proceedings, see the section titled “Legal Proceedings” contained in Part I, Item 1, Note 13 of our Notes to Consolidated Financial Statements of this report.

Changes in tax rules and regulations or interpretations thereof may adversely affect our effective tax rates.

We are a U.S.-based multinational company subject to tax in multiple domestic and foreign tax jurisdictions. Significant judgment is required in determining our current provision for income taxes and deferred tax assets or liabilities. Tax laws in the United States as well as other countries and jurisdictions in which we conduct business are subject to change as new laws are passed and/or new interpretations are made available, which may have a material impact on our business. These countries, governmental bodies, such as the European Commission of the European Union, and intergovernmental economic organizations, such as the Organization for Economic Cooperation and Development, have made or could make unprecedented assertions about how taxation is determined and, in some cases, have proposed or enacted new laws that are contrary to the way in which rules and regulations have historically been interpreted and applied.

Changes in our operating landscape, such as changes in laws or interpretations of tax rules, could adversely affect our effective tax rates and/or cause us to respond by making changes to our business structure, which could adversely affect our operations and financial results. Our future effective tax rates are likely to be unfavorably affected by changes in the tax rates in jurisdictions where our income is earned, changes in jurisdictions in which our profits are determined to be earned and taxed, changes in the valuation of our deferred tax assets and liabilities, changes in or interpretation of tax rules and regulations in the jurisdictions in which we do business, or unexpected negative changes in business and market conditions that could reduce certain tax benefits. An increase in our effective tax rate would reduce our profitability.

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Moreover, we are subject to the examination of our income tax returns by domestic and foreign tax authorities. We regularly assess the likelihood of outcomes resulting from these examinations to determine the adequacy of our provision for income taxes and have reserved for potential adjustments that may result from these examinations. While we believe our tax estimates are reasonable, we cannot provide assurance that the final determination of any of these examinations will not have an adverse effect on our financial position and results of operations.

Contracting with government entities exposes us to additional risks inherent in the government procurement process.

We provide products, services and solutions, directly and indirectly, to a variety of domestic and foreign government entities, which introduces certain risks and challenges not present in private commercial agreements, including varying governmental budgeting processes, fluctuations due to government spending cuts and shutdowns, highly competitive and lengthy bidding process that may be subject to political influence and adherence to complex procurement regulations and other government-specific contractual requirements. We incur significant up-front time and costs without any assurance that we will win a contract. Operating within a highly regulated industry, we have been and may in the future be subject to audits and investigations relating to our government contracts and any violations could result in termination of contracts and various civil and criminal penalties and administrative sanctions, including payment of fines and suspension or debarment from future government business, as well as harm to our reputation and financial results. We have made, and may continue to make, significant investments to support future sales opportunities in various government sectors, including to obtain various security authorizations and certifications. Such processes are complex, lengthy and can often be delayed. Furthermore, requirements may change, or we may be unable to achieve or sustain one or more government authorizations or certifications, which could affect our ability to sell to government entities until we meet any revised requirements.

Risks Related to Financial Performance

If there is a change in subscriptions or renewals in a reporting period, this could cause our financial results to suffer and may not be immediately reflected in our revenue and financial results for that period because we recognize revenue over the subscription term.

Our offerings are typically subscription-based, pursuant to product and service agreements. We generally recognize revenue from our subscription offerings ratably over the terms of their subscription agreements, which typically range from 1 to 36 months. As a result, most of the subscription revenue we report each quarter is the result of subscription agreements entered into during previous quarters. Lower sales and subscriptions, reduced demand for our products, services and solutions, and increases in our attrition rate in any given period may not be fully reflected in our results of operations until future periods. Our subscription model could also make it difficult for us to rapidly increase our revenue from subscription-based or hosted services through additional sales in any period, as revenue from new customers will be recognized over the applicable subscription term. Our renewal rates may decline or fluctuate as a result of a number of factors, including our customers’ level of satisfaction, our ability to continue enhancing features and functionality, reliability of our offerings, prices of ours and competitors’ offerings, the actual or perceived information security of our systems and services, decreases in the size of our customer base, changes as a result of regulatory or legal requirements, changes in the composition of our customer base and reductions in our customers’ spending levels or declines in customer activity. If our customers do not renew their subscriptions or if they renew on terms less favorable to us, our revenue may decline. Further, such impact on our revenue may not be immediately reflected in our financial results in the period in which our renewal rates changed and may adversely affect our financial results in future periods. If any of our assumptions about revenue from our subscription-based offerings prove incorrect, our actual results may suffer and vary from those anticipated.

We are subject to fluctuations in foreign currency exchange rates and may not be able to effectively hedge our exposure.

Our operating results and performance metrics are subject to fluctuations in foreign currency exchange rates due to the global scope of our business. Geopolitical and economic events, including war, trade disputes, economic sanctions and emerging market volatility, and associated uncertainty have caused, and may in the future cause, currencies to fluctuate. Accordingly, amounts reported as annualized recurring revenue, a performance metric which we measure at currency rates that are set at the beginning of each fiscal year and held constant throughout the year, may vary from actual revenue recognized in accordance with generally accepted accounting principles in the United States.

We attempt to mitigate a portion of these foreign currency exchange risks to our operating results through foreign currency hedging based on our judgment of the appropriate trade-offs among risk, opportunity and expense. We regularly review our hedging program and make adjustments that we believe are appropriate. Our hedging activities have not, and may not in the future, offset more than a portion of the adverse financial impact, including on our actual revenue recognized, resulting from unfavorable movement in foreign currency exchange rates, which could adversely affect our financial condition, business performance or results of operations.

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If our goodwill or intangible assets become impaired, then we could be required to record a significant charge to earnings.

We test goodwill for impairment at least annually. We review our goodwill and intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable, including declines in stock price, market capitalization or reduced future cash flow estimates and slower growth rates in our industry. Depending on the results of our review, we may be required to record a significant charge to earnings in our consolidated financial statements during the period in which any impairment of our goodwill or intangible assets was determined, negatively impacting our results of operations.

Our existing and future debt obligations may adversely affect our financial condition and future financial results.

As of August 30, 2024, we had $5.65 billion in senior unsecured notes outstanding and a $3 billion commercial paper program with no amounts outstanding. We also had a $1.5 billion senior unsecured revolving credit agreement, which was undrawn. This debt or future additional indebtedness may adversely affect our financial condition and future financial results by, among other things:

•requiring the dedication of a portion of our expected cash flows from operations to service our debt, thereby reducing the amount of expected cash flows available for other purposes, including capital expenditures and acquisitions;

•increasing our vulnerability to adverse changes in our business and general economic and industry conditions; and

•limiting our ability to obtain future financing for working capital, capital expenditures, future acquisitions, general corporate or other purposes, which may also impact our ability to service and repay outstanding indebtedness as it becomes due.

Our senior unsecured notes, commercial paper program and revolving credit agreement impose restrictions on us and require us to maintain compliance with specified covenants. Our ability to comply with these covenants may be affected by events beyond our control. If we breach any of the covenants and do not obtain a waiver from the noteholders or lenders, then, subject to applicable cure periods, any outstanding debt may be declared immediately due and payable.

In addition, changes by any rating agency to our credit rating may negatively impact the value and liquidity of both our debt and equity securities, as well as the potential costs associated with a refinancing of our debt. Under certain circumstances, if our credit ratings are downgraded or other negative action is taken, the interest rate payable by us under our revolving credit agreement could increase. Downgrades in our credit ratings could also restrict our ability to obtain additional financing in the future and affect the terms of any such financing.

General Risk Factors

Catastrophic events, including events associated with climate change, may disrupt our business and adversely affect our financial condition and results of operations.

Our business relies on our network infrastructure and enterprise apps, internal technology systems and websites. A disruption, infiltration or failure of our systems, data centers or operations, or those of our third-party service providers due to a major earthquake, other natural disasters, including climate-related events (such as drought, water security, heat waves, cold waves, wildfires and poor air quality), power shutoff or loss, telecommunications failure, epidemic, pandemic, war, terrorist attack or other catastrophic event, could cause interruptions to our systems and business operations, damage to critical infrastructure, loss of intellectual property, data security breaches and data loss. Our corporate headquarters, significant research and development activity, certain of our data centers and other critical business operations are in the San Francisco Bay Area and the Salt Lake Valley Area, both of which are near major earthquake faults. A catastrophic event, particularly one that may disrupt our data centers or our critical activities, could prevent us from conducting normal business operations and providing our products, services and solutions, which could adversely affect our business. A catastrophic event could negatively impact a country or region in which we sell and, in turn, decrease demand for our products, services and solutions, which could negatively impact our business. Climate-related catastrophic events that may harm our business are also increasing in frequency and severity. We may be subject to additional climate-related regulations and reporting requirements and changing market dynamics and stakeholder expectations regarding climate change and our environmental impacts, all of which may impact our business, financial condition and results of operations.

The occurrence of an epidemic or a pandemic, such as the COVID-19 pandemic, has had and may continue to have an adverse effect on our operating results. The extent to which epidemics and pandemics impact our financial condition or results of operations will depend on many factors outside of our control and whether there is a material impact on the businesses or productivity of our customers, employees, suppliers and other partners. A global pandemic may also intensify the other risks described in this Part I, Item 1A of this report.

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Our stock price may be volatile and your investment could lose value.

Our stock price has been and may continue to be volatile and subject to fluctuations. All factors described in this Part I, Item 1A of this report, some of which are beyond our control, may affect our stock price, including:

•shortfalls in or changes to estimates, recommendations or expectations about our revenue, margins, earnings, annualized recurring revenue or other key performance metrics set forth in guidance we provide or provided by financial analysts;

•changes in investor and analyst valuation models for our stock;

•changes in unearned revenue, remaining performance obligations and revenue recognized at a point in time, all of which may impact implied growth rates;

•developments related to products or services, technological advancements, strategic alliances, acquisitions or significant transactions by us or our competitors;

•changes in the amounts or frequency of stock repurchases;

•the loss of large customers or our inability to retain or increase sales to existing customers or attract new customers;

•changes to our management team, including recruitment or departure of key personnel;

•variations in our or our competitors’ results of operations, changes in the competitive landscape generally and developments in our industry;

•general economic, political or market conditions; and

•other events, such as significant litigation and regulatory actions.

In addition, the market for technology stocks or the stock market in general has experienced, and may in the future experience, extreme fluctuations, which has caused, and may in the future cause, our stock price to decline for reasons unrelated to our financial performance. Volatility in our stock price has increased, and in the future may increase, our susceptibility to securities class action litigation, which could result in substantial costs and divert management’s attention and resources, which may adversely affect our business.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Below is a summary of stock repurchases for the three months ended August 30, 2024. See Note 11 of our notes to condensed consolidated financial statements for information regarding our stock repurchase program.


Period	Total Number of Shares Repurchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Approximate Dollar Value that May Yet be Purchased Under the Plans (1)

	(in millions, except average price per share)
Beginning repurchase authority						$	22,650

June 1—June 28, 2024
Accelerated share repurchases (2),(3)	5.2	$	—	5.2		$	(2,500)	(3)

June 29—July 26, 2024
Shares repurchased	—	$	—	—		$	—
July 27—August 30, 2024
Shares repurchased	—	$	—	—		$	—

Total	5.2			5.2		$	20,150

_________________________________________

(1)In March 2024, our Board of Directors granted authority to repurchase up to $25 billion in our common stock through March 14, 2028.

(2)In March 2024, we entered into an accelerated share repurchase agreement (“ASR”) with a large financial institution whereupon we provided them with a prepayment of $2.5 billion and received an initial delivery of shares at contract inception representing a portion of the prepayment. Upon final settlement of this ASR in June 2024, we received an incremental delivery of 1.6 million shares of our common stock. Under this ASR, we repurchased a total of 5.2 million shares at an average price of $475.94.

(3)In June 2024, we entered into an ASR with a large financial institution whereupon we provided them with a prepayment of $2.5 billion and received an initial delivery of 3.6 million shares of our common stock at contract inception, representing a portion of the prepayment. Subsequent to August 30, 2024, this ASR was settled which resulted in total repurchases of 4.6 million shares at an average price of $546.30.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Plans

The following table shows the trading arrangements intended to satisfy the affirmative defense of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, adopted by our Section 16 officers and directors during the three months ended August 30, 2024.

Name and Position

Adoption Date

Total Number of Shares to be Sold

Expiration Date

Amy Banse

8/2/2024

Up to 5,779

9/30/2025

Director

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ITEM 6. EXHIBITS

INDEX TO EXHIBITS

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

Filing Date

Exhibit Number

SEC File No.

Filed
Herewith

3.1

Restated Certificate of Incorporation of Adobe

8-K

4/26/11

3.3

000-15175

3.2

Certificate of Amendment to Restated Certificate of Adobe

8-K

10/9/18

3.1

000-15175

3.3

Amended and Restated Bylaws

8-K

1/18/22

3.1

000-15175

31.1

Certification of Chief Executive Officer, as required by Rule 13a-14(a) of the Securities Exchange Act of 1934

31.2

Certification of Chief Financial Officer, as required by Rule 13a-14(a) of the Securities Exchange Act of 1934

32.1

Certification of Chief Executive Officer, as required by Rule 13a-14(b) of the Securities Exchange Act of 1934†

32.2

Certification of Chief Financial Officer, as required by Rule 13a-14(b) of the Securities Exchange Act of 1934†

101.INS

Inline XBRL Instance - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema

101.CAL

Inline XBRL Taxonomy Extension Calculation

101.LAB

Inline XBRL Taxonomy Extension Labels

101.PRE

Inline XBRL Taxonomy Extension Presentation

101.DEF

Inline XBRL Taxonomy Extension Definition

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

___________________________

Management contract or compensatory plan or arrangement.

†

The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q, are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Adobe Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


			ADOBE INC.

			By:			/s/ DANIEL DURN
						Daniel Durn
						Chief Financial Officer and
						Executive Vice President, Finance,
						Technology Services and Operations
						(Principal Financial Officer)

Date: September 25, 2024

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SUMMARY OF TRADEMARKS

The following trademarks of Adobe Inc. or its subsidiaries, which may be registered in the United States and/or other countries, are referenced in this Form 10-Q:

Acrobat

Acrobat AI Assistant

Acrobat Reader

Acrobat Sign

Adobe

Adobe Analytics

Adobe Campaign

Adobe Commerce

Adobe Experience Cloud

Adobe Express

Adobe Firefly

Adobe GenStudio

Adobe Mix Modeler

Adobe Scan

Adobe Stock

Adobe Target

Behance

Creative Cloud

Document Cloud

Journey Analytics

Journey Optimizer

Marketo

Marketo Engage

Photoshop

Workfront

All other trademarks are the property of their respective owners.

EXHIBIT 31.1

CERTIFICATIONS

I, Shantanu Narayen, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Adobe Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Dated: September 25, 2024			/s/ SHANTANU NARAYEN
			Shantanu Narayen
			Chair and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATIONS

I, Daniel Durn, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Adobe Inc.;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Dated: September 25, 2024			/s/ DANIEL DURN
			Daniel Durn
			Chief Financial Officer and
			Executive Vice President, Finance,
			Technology Services and Operations

EXHIBIT 32.1

CERTIFICATIONS PURSUANT TO

RULE 13a-14(b) OF THE SECURITIES EXCHANGE ACT OF 1934

AND 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Adobe Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended August 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Shantanu Narayen, certify, in accordance with Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, that to the best of my knowledge:

(1)The Report, to which this certification is attached as Exhibit 32.1, fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


Dated: September 25, 2024			/s/ SHANTANU NARAYEN
			Shantanu Narayen
			Chair and Chief Executive Officer

A signed original of this written statement required by Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

EXHIBIT 32.2

CERTIFICATIONS PURSUANT TO

RULE 13a-14(b) OF THE SECURITIES EXCHANGE ACT OF 1934

AND 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Adobe Inc. (the “Registrant”) on Form 10-Q for the quarterly period ended August 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel Durn, certify, in accordance with Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, that to the best of my knowledge:

(1)The Report, to which this certification is attached as Exhibit 32.2, fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.


Dated: September 25, 2024			/s/ DANIEL DURN
			Daniel Durn
			Chief Financial Officer and
			Executive Vice President, Finance,
			Technology Services and Operations

Cover Page - shares shares in Millions	9 Months Ended
Cover Page - shares shares in Millions	Aug. 30, 2024	Sep. 20, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Aug. 30, 2024
Document Transition Report	false
Entity File Number	0-15175
Entity Registrant Name	ADOBE INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	77-0019522
Entity Address, Address Line One	345 Park Avenue
Entity Address, City or Town	San Jose
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	95110-2704
City Area Code	408
Local Phone Number	536-6000
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	ADBE
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		440.2
Entity Central Index Key	0000796343
Amendment Flag	false
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--11-29

Condensed Consolidated Balance Sheets - USD ($)
$ in Millions

Aug. 30, 2024

Dec. 01, 2023

^[1]

Current assets:

Cash and cash equivalents

$ 7,193

$ 7,141

Short-term investments

322

701

Trade receivables, net of allowances for doubtful accounts of $17 and $16, respectively

1,802

2,224

Prepaid expenses and other current assets

1,399

1,018

Total current assets

10,716

11,084

Property and equipment, net

1,969

2,030

Operating lease right-of-use assets, net

368

358

Goodwill

12,814

12,805

Other intangibles, net

858

1,088

Deferred income taxes

1,548

1,191

Other assets

1,557

1,223

Total assets

29,830

29,779

Current liabilities:

Trade payables

318

314

Accrued expenses

1,848

1,942

Debt

1,499

Deferred revenue

5,779

5,837

Income taxes payable

130

Operating lease liabilities

Total current liabilities

9,644

8,251

Long-term liabilities:

Debt

4,128

3,634

Deferred revenue

127

113

Income taxes payable

585

514

Operating lease liabilities

381

373

Other liabilities

420

376

Total liabilities

15,285

13,261

Stockholders’ equity:

Preferred stock, $0.0001 par value; 2 shares authorized; none issued

Common stock, $0.0001 par value; 900 shares authorized; 601 shares issued; 445 and 455 shares outstanding, respectively

Additional paid-in capital

13,026

11,586

Retained earnings

36,911

33,346

Accumulated other comprehensive income (loss)

(309)

(285)

Treasury stock, at cost (156 and 146 shares, respectively)

(35,083)

(28,129)

Total stockholders’ equity

14,545

16,518

Total liabilities and stockholders’ equity

$ 29,830

$ 29,779

[1]	The condensed consolidated balance sheet as of December 1, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions, $ in Millions	Aug. 30, 2024	Dec. 01, 2023
Current assets:
Allowances for doubtful accounts	$ 17	$ 16
Stockholders’ equity:
Preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	2	2
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	900	900
Common stock, shares issued (in shares)	601	601
Common stock, shares outstanding (in shares)	445	455
Treasury stock, shares (in shares)	156	146

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Aug. 30, 2024	Sep. 01, 2023	Aug. 30, 2024	Sep. 01, 2023
Revenue:
Revenue	$ 5,408	$ 4,890	$ 15,899	$ 14,361
Cost of revenue:
Cost of revenue	554	580	1,742	1,720
Gross profit	4,854	4,310	14,157	12,641
Operating expenses:
Research and development	1,022	881	2,945	2,584
Sales and marketing	1,431	1,337	4,228	3,983
General and administrative	366	353	1,073	1,041
Acquisition termination fee	0	0	1,000	0
Amortization of intangibles	43	42	127	126
Total operating expenses	2,862	2,613	9,373	7,734
Operating income	1,992	1,697	4,784	4,907
Non-operating income (expense):
Interest expense	(51)	(27)	(119)	(85)
Investment gains (losses), net	12	6	34	12
Other income (expense), net	89	67	241	157
Total non-operating income (expense), net	50	46	156	84
Income before income taxes	2,042	1,743	4,940	4,991
Provision for income taxes	358	340	1,063	1,046
Net income	$ 1,684	$ 1,403	$ 3,877	$ 3,945
Basic net income per share (in usd per share)	$ 3.78	$ 3.07	$ 8.63	$ 8.62
Shares used to compute basic net income per share (in shares)	445.3	456.4	449.1	457.7
Diluted net income per share (in usd per share)	$ 3.76	$ 3.05	$ 8.58	$ 8.59
Shares used to compute diluted net income per share (in shares)	447.6	459.5	451.8	459.2
Subscription
Revenue:
Revenue	$ 5,180	$ 4,631	$ 15,156	$ 13,521
Cost of revenue:
Cost of revenue	413	447	1,324	1,317
Product
Revenue:
Revenue	82	96	305	346
Cost of revenue:
Cost of revenue	6	7	19	23
Services and other
Revenue:
Revenue	146	163	438	494
Cost of revenue:
Cost of revenue	$ 135	$ 126	$ 399	$ 380

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 30, 2024	Sep. 01, 2023	Aug. 30, 2024	Sep. 01, 2023
Statement of Comprehensive Income [Abstract]
Net income	$ 1,684	$ 1,403	$ 3,877	$ 3,945
Other comprehensive income (loss), net of taxes:
Unrealized gains / losses on available-for-sale securities	3	5	10	19
Reclassification adjustment for recognized gains / losses on available-for-sale securities	0	0	0	5
Net increase (decrease) from available-for-sale securities	3	5	10	24
Derivatives designated as hedging instruments:
Unrealized gains / losses on derivative instruments	(60)	8	(59)	0
Reclassification adjustment for realized gains / losses on derivative instruments	1	(4)	9	(28)
Net increase (decrease) from derivatives designated as hedging instruments	(59)	4	(50)	(28)
Foreign currency translation adjustments	23	3	16	12
Other comprehensive income (loss), net of taxes	(33)	12	(24)	8
Total comprehensive income, net of taxes	$ 1,651	$ 1,415	$ 3,853	$ 3,953

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($)
shares in Millions, $ in Millions

Total

Common Stock

Additional Paid-In Capital

Retained Earnings

Accumulated Other Comprehensive Income (Loss)

Treasury Stock

Beginning balances (in shares) at Dec. 02, 2022

601.0

Beginning balances at Dec. 02, 2022

$ 14,051

$ 0

$ 9,868

$ 28,319

$ (293)

$ (23,843)

Beginning balance, treasury stock (in shares) at Dec. 02, 2022

(139.0)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

3,945

Other comprehensive income (loss), net of taxes

Re-issuance of treasury stock under stock compensation plans

$ (113)

(252)

$ 103

Re-issuance of treasury stock under stock compensation plans (in shares)

4.0

Repurchase of common stock (in shares)

(9.7)

(10.0)

Repurchases of common stock

$ (3,407)

Stock-based compensation

1,291

Value of shares in deferred compensation plan

Ending balances (in shares) at Sep. 01, 2023

601.0

Ending balances at Sep. 01, 2023

15,776

$ 0

11,195

32,012

(285)

$ (27,146)

Ending balance, treasury stock (in shares) at Sep. 01, 2023

(145.0)

Beginning balances (in shares) at Jun. 02, 2023

601.0

Beginning balances at Jun. 02, 2023

14,838

$ 0

10,717

30,609

(297)

$ (26,191)

Beginning balance, treasury stock (in shares) at Jun. 02, 2023

(145.0)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

1,403

Other comprehensive income (loss), net of taxes

Re-issuance of treasury stock under stock compensation plans

$ 48

Re-issuance of treasury stock under stock compensation plans (in shares)

2.0

Repurchase of common stock (in shares)

(2.0)

Repurchases of common stock

(1,003)

$ (1,003)

Stock-based compensation

442

Ending balances (in shares) at Sep. 01, 2023

601.0

Ending balances at Sep. 01, 2023

15,776

$ 0

11,195

32,012

(285)

$ (27,146)

Ending balance, treasury stock (in shares) at Sep. 01, 2023

(145.0)

Beginning balances (in shares) at Dec. 01, 2023

601.0

Beginning balances at Dec. 01, 2023

$ 16,518

^[1]

$ 0

11,586

33,346

(285)

$ (28,129)

Beginning balance, treasury stock (in shares) at Dec. 01, 2023

(146.0)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

$ 3,877

3,877

Other comprehensive income (loss), net of taxes

(24)

Re-issuance of treasury stock under stock compensation plans

$ (164)

(312)

$ 100

Re-issuance of treasury stock under stock compensation plans (in shares)

3.0

Repurchase of common stock (in shares)

(12.9)

(13.0)

Repurchases of common stock

$ (7,053)

Stock-based compensation

1,392

Value of shares in deferred compensation plan

(1)

Ending balances (in shares) at Aug. 30, 2024

601.0

Ending balances at Aug. 30, 2024

$ 14,545

$ 0

13,026

36,911

(309)

$ (35,083)

Ending balance, treasury stock (in shares) at Aug. 30, 2024

(156.0)

Beginning balances (in shares) at May. 31, 2024

601.0

Beginning balances at May. 31, 2024

$ 14,843

$ 0

12,504

35,227

(276)

$ (32,612)

Beginning balance, treasury stock (in shares) at May. 31, 2024

(152.0)

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Net income

1,684

Other comprehensive income (loss), net of taxes

(33)

Re-issuance of treasury stock under stock compensation plans

$ 48

Re-issuance of treasury stock under stock compensation plans (in shares)

1.0

Repurchase of common stock (in shares)

(5.0)

Repurchases of common stock

(2,519)

$ (2,519)

Stock-based compensation

474

Ending balances (in shares) at Aug. 30, 2024

601.0

Ending balances at Aug. 30, 2024

$ 14,545

$ 0

$ 13,026

$ 36,911

$ (309)

$ (35,083)

Ending balance, treasury stock (in shares) at Aug. 30, 2024

(156.0)

[1]	The condensed consolidated balance sheet as of December 1, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Aug. 30, 2024	Sep. 01, 2023
Cash flows from operating activities:
Net income	$ 3,877	$ 3,945
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	639	650
Stock-based compensation	1,392	1,291
Reduction of operating lease right-of-use assets	56	54
Deferred income taxes	(341)	(276)
Unrealized losses (gains) on investments, net	(24)	(7)
Other non-cash items	9	0
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:
Trade receivables, net	414	217
Prepaid expenses and other assets	(799)	(787)
Trade payables	2	(47)
Accrued expenses and other liabilities	(162)	(153)
Income taxes payable	116	749
Deferred revenue	(44)	69
Net cash provided by operating activities	5,135	5,705
Cash flows from investing activities:
Maturities of short-term investments	379	754
Proceeds from sales of short-term investments	9	215
Purchases of property and equipment	(135)	(313)
Purchases of long-term investments, intangibles and other assets	(125)	(34)
Proceeds from sale of long-term investments and other assets	2	1
Net cash provided by investing activities	130	623
Cash flows from financing activities:
Repurchases of common stock	(7,000)	(3,400)
Proceeds from re-issuance of treasury stock	361	314
Taxes paid related to net share settlement of equity awards	(525)	(387)
Proceeds from issuance of debt	1,997	0
Repayment of debt	0	(500)
Other financing activities, net	(56)	8
Net cash used for financing activities	(5,223)	(3,965)
Effect of foreign currency exchange rates on cash and cash equivalents	10	2
Net change in cash and cash equivalents	52	2,365
Cash and cash equivalents at beginning of period	7,141	4,236
Cash and cash equivalents at end of period	7,193	6,601
Supplemental disclosures:
Cash paid for income taxes, net of refunds	1,389	590
Cash paid for interest	$ 94	$ 103

Basis of Presentation and Summary of Significant Accounting Policies	9 Months Ended
	Aug. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 1, 2023 on file with the SEC (our “Annual Report”). Use of Estimates In preparing the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, we must make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ materially from these estimates. Significant Accounting Policies There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report. Recent Accounting Pronouncements Not Yet Effective In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The updated standard is effective for our annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026. Early adoption is permitted. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes, which prescribes standardized categories and disaggregation of information in the reconciliation of provision for income taxes, requires disclosure of disaggregated income taxes paid, and modifies other income tax-related disclosure requirements. The updated standard is effective for us beginning with our fiscal year 2026 annual reporting period. Early adoption is permitted. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures. With the exception of the new standards discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the nine months ended August 30, 2024, as compared to the recent accounting pronouncements described in our Annual Report, that are of significance or potential significance to us.

Revenue

9 Months Ended

Aug. 30, 2024

Revenue [Abstract]

REVENUE

Segment Information

Our segment results for the three months ended August 30, 2024 and September 1, 2023 were as follows:


(dollars in millions)	Digital Media			Digital Experience			Publishing and Advertising			Total
Three months ended August 30, 2024
Revenue	$	3,995		$	1,354		$	59		$	5,408
Cost of revenue	137			395			22			554
Gross profit	$	3,858		$	959		$	37		$	4,854
Gross profit as a percentage of revenue	97		%	71		%	63		%	90		%
Three months ended September 1, 2023
Revenue	$	3,594		$	1,229		$	67		$	4,890
Cost of revenue	161			397			22			580
Gross profit	$	3,433		$	832		$	45		$	4,310
Gross profit as a percentage of revenue	96		%	68		%	67		%	88		%

Our segment results for the nine months ended August 30, 2024 and September 1, 2023 were as follows:


(dollars in millions)	Digital Media			Digital Experience			Publishing and Advertising			Total
Nine months ended August 30, 2024
Revenue	$	11,719		$	3,970		$	210		$	15,899
Cost of revenue	489			1,187			66			1,742
Gross profit	$	11,230		$	2,783		$	144		$	14,157
Gross profit as a percentage of revenue	96		%	70		%	69		%	89		%
Nine months ended September 1, 2023
Revenue	$	10,500		$	3,627		$	234		$	14,361
Cost of revenue	455			1,200			65			1,720
Gross profit	$	10,045		$	2,427		$	169		$	12,641
Gross profit as a percentage of revenue	96		%	67		%	72		%	88		%

Revenue by geographic area for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Americas	$	3,241	$	2,943	$	9,539	$	8,601
EMEA	1,405		1,229		4,085		3,615
APAC	762		718		2,275		2,145
Total	$	5,408	$	4,890	$	15,899	$	14,361

Revenue by major offerings in our Digital Media reportable segment for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Creative Cloud	$	3,188	$	2,909	$	9,380	$	8,522
Document Cloud	807		685		2,339		1,978
Total Digital Media revenue	$	3,995	$	3,594	$	11,719	$	10,500

Subscription revenue by segment for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Digital Media	$	3,921	$	3,506	$	11,474	$	10,225
Digital Experience	1,231		1,096		3,599		3,208
Publishing and Advertising	28		29		83		88
Total subscription revenue	$	5,180	$	4,631	$	15,156	$	13,521

Contract Balances

Acquisitions	9 Months Ended
Acquisitions	Aug. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
ACQUISITIONS	ACQUISITIONS Figma On September 15, 2022, we entered into a definitive merger agreement under which we intended to acquire Figma, Inc. (“Figma”) for approximately $20 billion, comprised of approximately half cash and half stock. On December 17, 2023, we entered into a mutual termination agreement with Figma to terminate the proposed merger. In accordance with the terms of the termination agreement, we paid Figma a termination fee of $1 billion. The termination fee was recorded in operating expenses in our condensed consolidated statements of income during the nine months ended August 30, 2024, and was not tax-deductible for financial statement purposes.

Cash, Cash Equivalents and Short-Term Investments

9 Months Ended

Aug. 30, 2024

Cash, Cash Equivalents, and Short-Term Investments [Abstract]

CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash, cash equivalents and short-term investments consisted of the following as of August 30, 2024:


(in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	571	$	—	$	—	$	571
Cash equivalents:

Money market funds	6,622		—		—		6,622





Total cash and cash equivalents	7,193		—		—		7,193
Short-term fixed income securities:
Asset-backed securities	6		—		—		6
Corporate debt securities	146		—		(1)		145


U.S. agency securities	13		—		—		13
U.S. Treasury securities	159		—		(1)		158
Total short-term investments	324		—		(2)		322
Total cash, cash equivalents and short-term investments	$	7,517	$	—	$	(2)	$	7,515

Cash, cash equivalents and short-term investments consisted of the following as of December 1, 2023:


(in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	618	$	—	$	—	$	618
Cash equivalents:

Money market funds	6,498		—		—		6,498

Time deposits	25		—		—		25

Total cash equivalents	6,523		—		—		6,523
Total cash and cash equivalents	7,141		—		—		7,141
Short-term fixed income securities:
Asset-backed securities	15		—		—		15

Corporate debt securities	438		—		(4)		434


U.S. agency securities	13		—		(1)		12
U.S. Treasury securities	247		—		(7)		240


Total short-term investments	713		—		(12)		701
Total cash, cash equivalents and short-term investments	$	7,854	$	—	$	(12)	$	7,842

See Note 5 for further information regarding the fair value of our financial instruments.

The following table summarizes the estimated fair value of short-term fixed income debt securities classified as short-term investments based on stated effective maturities as of August 30, 2024:


(in millions)	Estimated Fair Value
Due within one year	$	308
Due between one and two years	14


Total	$	322

Fair Value Measurements

9 Months Ended

Aug. 30, 2024

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

The fair value of our financial assets and liabilities at August 30, 2024 was determined using the following inputs:


(in millions)	Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents:


Money market funds	$	6,622	$	6,622	$	—	$	—




Short-term investments:
Asset-backed securities	6		—		6		—
Corporate debt securities	145		—		145		—




U.S. agency securities	13		—		13		—
U.S. Treasury securities	158		—		158		—
Prepaid expenses and other current assets:
Foreign currency derivatives	9		—		9		—

Other assets:
Deferred compensation plan assets	266		266		—		—
Foreign currency derivatives	1		—		1		—

Total assets	$	7,220	$	6,888	$	332	$	—


Liabilities:
Accrued expenses:

Foreign currency derivatives	$	42	$	—	$	42	$	—

Other liabilities:
Foreign currency derivatives	9		—		9		—
Total liabilities	$	51	$	—	$	51	$	—

The fair value of our financial assets and liabilities at December 1, 2023 was determined using the following inputs:


(in millions)	Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents:

Money market funds	$	6,498	$	6,498	$	—	$	—

Time deposits	25		25		—		—

Short-term investments:
Asset-backed securities	15		—		15		—
Corporate debt securities	434		—		434		—



U.S. agency securities	12		—		12		—
U.S. Treasury securities	240		—		240		—
Prepaid expenses and other current assets:
Foreign currency derivatives	52		—		52		—
Other assets:
Deferred compensation plan assets	206		206		—		—

Total assets	$	7,482	$	6,729	$	753	$	—


Liabilities:
Accrued expenses:

Foreign currency derivatives	$	4	$	—	$	4	$	—

See Note 4 for further information regarding the fair value of our financial instruments.

Our other current financial assets and current financial liabilities have fair values that approximate their carrying values.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Derivative Financial Instruments

9 Months Ended

Aug. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

Cash Flow Hedges

Non-Designated Hedges


(in millions)	2024				2023
	Fair Value Asset Derivatives		Fair Value Liability Derivatives		Fair Value Asset Derivatives		Fair Value Liability Derivatives
Derivatives designated as hedging instruments:
Foreign exchange option contracts	$	5	$	—	$	42	$	—
Foreign exchange forward contracts	3		49		1		—


Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	2		2		9		4
Total derivatives	$	10	$	51	$	52	$	4

For the three and nine months ended August 30, 2024 and September 1, 2023, the effects of derivative instruments on our condensed consolidated statements of income were immaterial.

Goodwill and Other Intangibles

9 Months Ended

Aug. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLES

Other intangible assets subject to amortization as of August 30, 2024 and December 1, 2023 were as follows:


(in millions)	2024						2023
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer contracts and relationships	$	1,205	$	(713)	$	492	$	1,204	$	(619)	$	585
Purchased technology	877		(664)		213		984		(647)		337
Trademarks	376		(250)		126		376		(217)		159


Other	36		(9)		27		22		(15)		7
Other intangibles, net	$	2,494	$	(1,636)	$	858	$	2,586	$	(1,498)	$	1,088

As of August 30, 2024, the estimated aggregate amortization expense in future periods was as follows:


(in millions)
Fiscal Year	Other Intangibles (1)
Remainder of 2024	$	83
2025	303
2026	151
2027	109
2028	66
Thereafter	126
Total expected amortization expense	$	838

_________________________________________

(1)Excludes capitalized in-process research and development which is considered indefinite lived until the completion or abandonment of the associated research and development efforts.

Accrued Expenses

9 Months Ended

Aug. 30, 2024

Payables and Accruals [Abstract]

ACCRUED EXPENSES

Accrued expenses as of August 30, 2024 and December 1, 2023 consisted of the following:


(in millions)	2024		2023
Accrued compensation and benefits	$	504	$	535
Accrued bonuses	447		547

Accrued corporate marketing	149		132

Sales and use taxes	111		122
Refund liabilities	107		111




Other	530		495
Accrued expenses	$	1,848	$	1,942

Other primarily includes general business accruals, accrued hosting fees, royalties payable and accrued interest expense.

Stock-Based Compensation

9 Months Ended

Aug. 30, 2024

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

Restricted Stock Units

Restricted stock unit activity for the nine months ended August 30, 2024 was as follows:


	Number of Shares (in millions)	Weighted Average Grant Date Fair Value		Aggregate Fair Value (1) (in millions)
Beginning outstanding balance	7.8	$	418.63
Awarded	2.9	$	586.20
Released	(2.6)	$	441.45
Forfeited	(0.4)	$	449.34

Ending outstanding balance	7.7	$	472.50	$	4,436

Expected to vest	7.1	$	471.45	$	4,100

_________________________________________

(1) The aggregate fair value is calculated using the closing stock price as of August 30, 2024 of $574.41.

The total fair value of restricted stock units vested during the nine months ended August 30, 2024 was $1.42 billion.

Performance Shares

As of August 30, 2024, the performance shares awarded under our 2024, 2023 and 2022 Performance Share Programs remained outstanding and unvested.

Performance share activity for the nine months ended August 30, 2024 was as follows:


	Number of Shares (in millions)	Weighted Average Grant Date Fair Value		Aggregate Fair Value (1) (in millions)
Beginning outstanding balance	0.5	$	465.71
Awarded	0.2	$	645.40
Released	(0.1)	$	455.65
Forfeited	(0.1)	$	487.20
Ending outstanding balance	0.5	$	536.74	$	301

Expected to vest	0.5	$	534.50	$	277

_________________________________________

(1) The aggregate fair value is calculated using the closing stock price as of August 30, 2024 of $574.41.

The total fair value of performance shares vested during the nine months ended August 30, 2024 was $63 million.

Employee Stock Purchase Plan Shares

Compensation Costs

Total stock-based compensation costs included in our condensed consolidated statements of income for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Cost of revenue	$	30	$	30	$	90	$	88
Research and development	241		224		704		657
Sales and marketing	140		130		403		375
General and administrative	63		58		195		171
Total	$	474	$	442	$	1,392	$	1,291

Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Aug. 30, 2024

Stockholders' Equity Note [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive income (loss) and activity, net of related taxes, were as follows:


(in millions)	December 1, 2023		Increase / Decrease		Reclassification Adjustments			August 30, 2024



Net unrealized gains / losses on available-for-sale securities	$	(12)	$	10	$	—	(1)	$	(2)
Net unrealized gains / losses on derivative instruments designated as hedging instruments	(26)		(59)		9		(2)	(76)
Cumulative foreign currency translation adjustments	(247)		16		—			(231)
Total accumulated other comprehensive income (loss), net of taxes	$	(285)	$	(33)	$	9		$	(309)

_________________________________________

(1)Reclassification adjustments for gains / losses on available-for-sale securities are classified in other income (expense), net.

Taxes related to each component of other comprehensive income (loss) for the three and nine months ended August 30, 2024 and September 1, 2023 were immaterial.

Stock Repurchase Program

9 Months Ended

Aug. 30, 2024

Stock Repurchase Program [Abstract]

STOCK REPURCHASE PROGRAM

Share repurchase activity for the nine months ended August 30, 2024 and September 1, 2023 was as follows:


	Number of Shares Delivered (in millions)	Average Price Paid Per Share
Nine months ended August 30, 2024
Structured stock repurchase agreement entered into in fiscal 2023	0.6	$	626.68
ASR entered into in December 2023	3.5	$	578.11
ASR entered into in March 2024	5.2	$	475.94
ASR entered into in June 2024	3.6	$	—	(1)

Total shares delivered	12.9
Nine months ended September 1, 2023
Structured stock repurchase agreements entered into in fiscal 2022 and the nine months ended September 1, 2023	5.7	$	396.43
ASR entered into in December 2022	4.0	$	348.46
Total shares delivered	9.7

_________________________________________

Net Income Per Share

9 Months Ended

Aug. 30, 2024

Earnings Per Share [Abstract]

NET INCOME PER SHARE

The following table sets forth the computation of basic and diluted net income per share for the three and nine months ended August 30, 2024 and September 1, 2023:


	Three Months				Nine Months
(in millions, except per share data)	2024		2023		2024		2023
Net income	$	1,684	$	1,403	$	3,877	$	3,945

Shares used to compute basic net income per share	445.3		456.4		449.1		457.7
Dilutive potential common shares from stock plans and programs	2.3		3.1		2.7		1.5


Shares used to compute diluted net income per share	447.6		459.5		451.8		459.2

Basic net income per share	$	3.78	$	3.07	$	8.63	$	8.62
Diluted net income per share	$	3.76	$	3.05	$	8.58	$	8.59

Anti-dilutive potential common shares	2.0		0.5		1.8		3.5

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Aug. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Indemnifications In the ordinary course of business, we provide indemnifications of varying scope to customers and channel partners against claims of intellectual property infringement made by third parties arising from the use of our products and from time to time, we are subject to claims by our customers under these indemnification provisions. Historically, costs related to these indemnification provisions have not been significant and we are unable to estimate the maximum potential impact of these indemnification provisions on our future results of operations. To the extent permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is or was serving at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal. Legal Proceedings We are subject to legal proceedings, claims, including claims relating to intellectual property, commercial, employment and other matters, and investigations, including government investigations, that arise in the ordinary course of our business. Some of these disputes, legal proceedings and investigations may include speculative claims for substantial or indeterminate amounts of damages. We consider all claims on a quarterly basis in accordance with GAAP and based on known facts assess whether potential losses are considered reasonably possible or probable and estimable. Based upon this assessment, we then evaluate disclosure requirements and whether to accrue for such claims in our financial statements. This determination is then reviewed and discussed with the Audit Committee of the Board of Directors. We make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. As of August 30, 2024, accrued provisions for legal proceedings were immaterial. Unless otherwise specifically disclosed in this note, we have determined that no disclosure is required related to any claim against us because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial. All legal costs associated with litigation are expensed as incurred. Litigation is inherently unpredictable. However, we believe that we have valid defenses with respect to the legal matters pending against us. It is possible, nevertheless, that our consolidated financial position, results of operations or cash flows could be negatively affected by an unfavorable resolution of one or more of such proceedings, claims or investigations. Since June 2022, we have been cooperating with the Federal Trade Commission (the “FTC”) staff in response to a Civil Investigative Demand seeking information regarding our disclosure and subscription cancellation practices relative to the Restore Online Shoppers’ Confidence Act (“ROSCA”). In November 2023, the FTC staff asserted that they had the authority to enter into consent negotiations to determine if a settlement regarding their investigation of these issues could be reached. On March 20, 2024, we were informed that the FTC had voted to authorize a filing of the case. The FTC then referred the case to the Department of Justice (the “DOJ”), and on June 17, 2024, the DOJ filed a civil complaint in the United States District Court for the Northern District of California, naming Adobe and certain of our employees as defendants. The complaint alleges that Adobe failed to clearly and conspicuously disclose material terms, failed to obtain express informed consent and failed to provide a simple cancellation mechanism regarding our disclosure and subscription cancellation practices in violation of ROSCA and the FTC Act. The DOJ is seeking injunctive relief, civil penalties, equitable monetary relief and other relief. The defense or resolution of this matter could involve significant monetary costs or penalties and have a significant impact on our financial results and operations. There can be no assurance that we will be successful in negotiating a favorable settlement or in litigation. Any remedies or compliance requirements could adversely affect our ability to operate our business or have a materially adverse impact on our financial results. At this stage, we are unable to estimate a reasonably possible financial loss or range of any potential financial loss, if any, as a result of this litigation. On October 20, 2023, a securities class action captioned Pembroke Pines Firefighters & Police Officers Pension Fund et al v. Adobe, Inc. et al, Case No. 1:23-cv-09260, was filed in the U.S. District Court for the Southern District of New York (the “Securities Action”) naming Adobe and certain of our current and former officers as defendants. The Securities Action purports to be brought on behalf of purchasers of the Company’s stock between July 23, 2021 and September 22, 2022 (the “Class Period”). The complaint, which was amended on February 23, 2024, alleges that certain public statements made by Adobe during the Class Period related to competition from Figma and the adequacy of Adobe’s existing offerings to counter harms Adobe may have faced due to Figma’s growing market position were materially false and misleading. The Securities Action seeks unspecified compensatory damages, attorneys’ fees and costs, and extraordinary equitable and/or injunctive relief. On November 16, 2023, a shareholder derivative action captioned Shah v. Narayen et al, Case No. 1:23-cv-01315, was filed in the U.S. District Court for the District of Delaware (the “Shah Action”), purportedly on behalf of Adobe. On January 3, 2024, a second shareholder derivative action captioned Gervat v. Narayen et al, Case No. 1:24-cv-00006, was filed in the U.S. District Court for the District of Delaware (the “Gervat Action”), purportedly on behalf of Adobe. On January 24, 2024, the Court consolidated the Shah and Gervat Actions (together, the “Consolidated Derivative Action”). On January 18, 2024, a shareholder derivative action captioned Sbriglio v. Narayen et al., Case No. 24-cv-429458, was filed in California Superior Court (the “Sbriglio Action”), purportedly on behalf of Adobe. On January 29, 2024, a shareholder derivative action captioned Roy v. Narayen et al., No. 1:24-cv-00633, was filed in the U.S. District Court for the Southern District of New York, (the “Roy Action,” and together with the Consolidated Derivative Action and the Sbriglio Action, the “Derivative Actions”), purportedly on behalf of Adobe. The Derivative Actions are based largely on the same alleged facts and circumstances as the Securities Action, and name certain of our current and former officers and members of our Board of Directors as defendants and Adobe as a nominal defendant. The Derivative Actions together allege claims for breach of fiduciary duty and/or aiding and abetting breach of fiduciary duties, unjust enrichment, waste of corporate assets, abuse of control, and violations of Section 10(b) (and Rule 10b-5 promulgated thereunder), Section 20(a), and/or Section 21D of the Securities Exchange Act of 1934, as amended, and seek recovery of unspecified damages, restitution, and attorney’s fees and costs, as well as disgorgement of profits and certain payments and benefits, in the case of the Gervat Action, and improvements to Adobe’s corporate governance and internal procedures, in the case of the Shah Action, on behalf of Adobe. We dispute the allegations of wrongdoing in the Securities Action and the Derivative Actions and intend to vigorously defend ourselves in these matters. In view of the complexity and ongoing and uncertain nature of the outstanding proceedings and inquiries, at this time we are unable to estimate a reasonably possible financial loss or range of financial loss, if any, that we may incur to resolve or settle the Securities Action and the Derivative Actions. In connection with disputes relating to the validity or alleged infringement of third-party intellectual property rights, including patent rights, we have been, are currently and may in the future be subject to claims, negotiations or complex, protracted litigation. Intellectual property disputes and litigation may be very costly and can be disruptive to our business operations by diverting the attention and energies of management and key technical personnel. Although we have successfully defended or resolved past litigation and disputes, we may not prevail in any ongoing or future litigation and disputes. Third-party intellectual property disputes could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from licensing certain of our products or offering certain of our services, subject us to injunctions restricting our sale of products or services, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy indemnification commitments with our customers including contractual provisions under various license arrangements and service agreements.

Debt

9 Months Ended

Aug. 30, 2024

Debt Disclosure [Abstract]

DEBT

The carrying value of our borrowings as of August 30, 2024 and December 1, 2023 were as follows:


(dollars in millions)	Issuance Date	Due Date	Effective Interest Rate	2024		2023
1.90% 2025 Notes	February 2020	February 2025	2.07%	$	500	$	500
3.25% 2025 Notes	January 2015	February 2025	3.67%	1,000		1,000
2.15% 2027 Notes	February 2020	February 2027	2.26%	850		850
4.85% 2027 Notes	April 2024	April 2027	5.03%	500		—
4.80% 2029 Notes	April 2024	April 2029	4.93%	750		—
2.30% 2030 Notes	February 2020	February 2030	2.69%	1,300		1,300
4.95% 2034 Notes	April 2024	April 2034	5.03%	750		—
Total debt outstanding, at par				$	5,650	$	3,650
Less: Current portion of debt, at par				(1,500)		—
Unamortized discount and debt issuance costs				(22)		(16)
Carrying value of long-term debt				$	4,128	$	3,634

Current portion of debt, at par				$	1,500	$	—
Unamortized discount and debt issuance costs				(1)		—
Carrying value of current debt				$	1,499	$	—

Senior Notes

Our senior notes rank equally with our other unsecured and unsubordinated indebtedness, and do not contain financial covenants. We may redeem the notes at any time, subject to a make-whole premium.

Revolving Credit Agreement

As of August 30, 2024, there were no outstanding borrowings under this Revolving Credit Agreement.

Commercial Paper Program

Term Loan Credit Agreement

Pay vs Performance Disclosure - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Millions	Aug. 30, 2024	Sep. 01, 2023	Aug. 30, 2024	Sep. 01, 2023
Pay vs Performance Disclosure
Net income	$ 1,684	$ 1,403	$ 3,877	$ 3,945

Insider Trading Arrangements

3 Months Ended

Aug. 30, 2024

Trading Arrangements, by Individual

Non-Rule 10b5-1 Arrangement Adopted

false

Rule 10b5-1 Arrangement Terminated

false

Non-Rule 10b5-1 Arrangement Terminated

false

Director Trading Arrangement [Member]

Trading Arrangements, by Individual

Material Terms of Trading Arrangement

Name and Position

Adoption Date

Total Number of Shares to be Sold

Expiration Date

Amy Banse

8/2/2024

Up to 5,779

9/30/2025

Director

Director Trading Arrangement [Member] | Amy Banse [Member]

Trading Arrangements, by Individual

Name

Amy Banse

Title

Director

Rule 10b5-1 Arrangement Adopted

true

8/2/2024

9/30/2025

424 days

5,779

Basis of Presentation and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Aug. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 1, 2023 on file with the SEC (our “Annual Report”).
Use of Estimates	Use of Estimates In preparing the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, we must make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ materially from these estimates.
Significant Accounting Policies	Significant Accounting Policies There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report.
Recent Accounting Pronouncements Not Yet Effective	Recent Accounting Pronouncements Not Yet Effective In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The updated standard is effective for our annual periods beginning in fiscal 2025 and interim periods beginning in the first quarter of fiscal 2026. Early adoption is permitted. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes, which prescribes standardized categories and disaggregation of information in the reconciliation of provision for income taxes, requires disclosure of disaggregated income taxes paid, and modifies other income tax-related disclosure requirements. The updated standard is effective for us beginning with our fiscal year 2026 annual reporting period. Early adoption is permitted. We are currently evaluating the impact that the updated standard will have on our financial statement disclosures. With the exception of the new standards discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the nine months ended August 30, 2024, as compared to the recent accounting pronouncements described in our Annual Report, that are of significance or potential significance to us.

Revenue (Tables)

9 Months Ended

Aug. 30, 2024

Revenue [Abstract]

Disaggregation of Revenue

Segment Information

Our segment results for the three months ended August 30, 2024 and September 1, 2023 were as follows:


(dollars in millions)	Digital Media			Digital Experience			Publishing and Advertising			Total
Three months ended August 30, 2024
Revenue	$	3,995		$	1,354		$	59		$	5,408
Cost of revenue	137			395			22			554
Gross profit	$	3,858		$	959		$	37		$	4,854
Gross profit as a percentage of revenue	97		%	71		%	63		%	90		%
Three months ended September 1, 2023
Revenue	$	3,594		$	1,229		$	67		$	4,890
Cost of revenue	161			397			22			580
Gross profit	$	3,433		$	832		$	45		$	4,310
Gross profit as a percentage of revenue	96		%	68		%	67		%	88		%

Our segment results for the nine months ended August 30, 2024 and September 1, 2023 were as follows:


(dollars in millions)	Digital Media			Digital Experience			Publishing and Advertising			Total
Nine months ended August 30, 2024
Revenue	$	11,719		$	3,970		$	210		$	15,899
Cost of revenue	489			1,187			66			1,742
Gross profit	$	11,230		$	2,783		$	144		$	14,157
Gross profit as a percentage of revenue	96		%	70		%	69		%	89		%
Nine months ended September 1, 2023
Revenue	$	10,500		$	3,627		$	234		$	14,361
Cost of revenue	455			1,200			65			1,720
Gross profit	$	10,045		$	2,427		$	169		$	12,641
Gross profit as a percentage of revenue	96		%	67		%	72		%	88		%

Revenue by geographic area for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Americas	$	3,241	$	2,943	$	9,539	$	8,601
EMEA	1,405		1,229		4,085		3,615
APAC	762		718		2,275		2,145
Total	$	5,408	$	4,890	$	15,899	$	14,361

Revenue by major offerings in our Digital Media reportable segment for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Creative Cloud	$	3,188	$	2,909	$	9,380	$	8,522
Document Cloud	807		685		2,339		1,978
Total Digital Media revenue	$	3,995	$	3,594	$	11,719	$	10,500

Subscription revenue by segment for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Digital Media	$	3,921	$	3,506	$	11,474	$	10,225
Digital Experience	1,231		1,096		3,599		3,208
Publishing and Advertising	28		29		83		88
Total subscription revenue	$	5,180	$	4,631	$	15,156	$	13,521

Cash, Cash Equivalents and Short-Term Investments (Tables)

9 Months Ended

Aug. 30, 2024

Cash, Cash Equivalents, and Short-Term Investments [Abstract]

Cash Cash Equivalents and Short-Term Investments

Cash, cash equivalents and short-term investments consisted of the following as of August 30, 2024:


(in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	571	$	—	$	—	$	571
Cash equivalents:

Money market funds	6,622		—		—		6,622





Total cash and cash equivalents	7,193		—		—		7,193
Short-term fixed income securities:
Asset-backed securities	6		—		—		6
Corporate debt securities	146		—		(1)		145


U.S. agency securities	13		—		—		13
U.S. Treasury securities	159		—		(1)		158
Total short-term investments	324		—		(2)		322
Total cash, cash equivalents and short-term investments	$	7,517	$	—	$	(2)	$	7,515

Cash, cash equivalents and short-term investments consisted of the following as of December 1, 2023:


(in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	618	$	—	$	—	$	618
Cash equivalents:

Money market funds	6,498		—		—		6,498

Time deposits	25		—		—		25

Total cash equivalents	6,523		—		—		6,523
Total cash and cash equivalents	7,141		—		—		7,141
Short-term fixed income securities:
Asset-backed securities	15		—		—		15

Corporate debt securities	438		—		(4)		434


U.S. agency securities	13		—		(1)		12
U.S. Treasury securities	247		—		(7)		240


Total short-term investments	713		—		(12)		701
Total cash, cash equivalents and short-term investments	$	7,854	$	—	$	(12)	$	7,842

Estimated Fair Value of Short-Term Fixed Income Debt Securities

The following table summarizes the estimated fair value of short-term fixed income debt securities classified as short-term investments based on stated effective maturities as of August 30, 2024:


(in millions)	Estimated Fair Value
Due within one year	$	308
Due between one and two years	14


Total	$	322

Fair Value Measurements (Tables)

9 Months Ended

Aug. 30, 2024

Fair Value Disclosures [Abstract]

Financial assets and liabilities at fair value on a recurring basis

The fair value of our financial assets and liabilities at August 30, 2024 was determined using the following inputs:


(in millions)	Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents:


Money market funds	$	6,622	$	6,622	$	—	$	—




Short-term investments:
Asset-backed securities	6		—		6		—
Corporate debt securities	145		—		145		—




U.S. agency securities	13		—		13		—
U.S. Treasury securities	158		—		158		—
Prepaid expenses and other current assets:
Foreign currency derivatives	9		—		9		—

Other assets:
Deferred compensation plan assets	266		266		—		—
Foreign currency derivatives	1		—		1		—

Total assets	$	7,220	$	6,888	$	332	$	—


Liabilities:
Accrued expenses:

Foreign currency derivatives	$	42	$	—	$	42	$	—

Other liabilities:
Foreign currency derivatives	9		—		9		—
Total liabilities	$	51	$	—	$	51	$	—

The fair value of our financial assets and liabilities at December 1, 2023 was determined using the following inputs:


(in millions)	Fair Value Measurements at Reporting Date Using
			Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents:

Money market funds	$	6,498	$	6,498	$	—	$	—

Time deposits	25		25		—		—

Short-term investments:
Asset-backed securities	15		—		15		—
Corporate debt securities	434		—		434		—



U.S. agency securities	12		—		12		—
U.S. Treasury securities	240		—		240		—
Prepaid expenses and other current assets:
Foreign currency derivatives	52		—		52		—
Other assets:
Deferred compensation plan assets	206		206		—		—

Total assets	$	7,482	$	6,729	$	753	$	—


Liabilities:
Accrued expenses:

Foreign currency derivatives	$	4	$	—	$	4	$	—

Derivative Financial Instruments (Tables)

9 Months Ended

Aug. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivative Instruments

The fair value of derivative instruments as of August 30, 2024 and December 1, 2023 were as follows:


(in millions)	2024				2023
	Fair Value Asset Derivatives		Fair Value Liability Derivatives		Fair Value Asset Derivatives		Fair Value Liability Derivatives
Derivatives designated as hedging instruments:
Foreign exchange option contracts	$	5	$	—	$	42	$	—
Foreign exchange forward contracts	3		49		1		—


Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	2		2		9		4
Total derivatives	$	10	$	51	$	52	$	4

Goodwill and Other Intangibles (Tables)

9 Months Ended

Aug. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Other intangible assets

Other intangible assets subject to amortization as of August 30, 2024 and December 1, 2023 were as follows:


(in millions)	2024						2023
	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Customer contracts and relationships	$	1,205	$	(713)	$	492	$	1,204	$	(619)	$	585
Purchased technology	877		(664)		213		984		(647)		337
Trademarks	376		(250)		126		376		(217)		159


Other	36		(9)		27		22		(15)		7
Other intangibles, net	$	2,494	$	(1,636)	$	858	$	2,586	$	(1,498)	$	1,088

Amortization expense in future periods

As of August 30, 2024, the estimated aggregate amortization expense in future periods was as follows:


(in millions)
Fiscal Year	Other Intangibles (1)
Remainder of 2024	$	83
2025	303
2026	151
2027	109
2028	66
Thereafter	126
Total expected amortization expense	$	838

_________________________________________

(1)Excludes capitalized in-process research and development which is considered indefinite lived until the completion or abandonment of the associated research and development efforts.

Accrued Expenses (Tables)

9 Months Ended

Aug. 30, 2024

Payables and Accruals [Abstract]

Accrued Expenses

Accrued expenses as of August 30, 2024 and December 1, 2023 consisted of the following:


(in millions)	2024		2023
Accrued compensation and benefits	$	504	$	535
Accrued bonuses	447		547

Accrued corporate marketing	149		132

Sales and use taxes	111		122
Refund liabilities	107		111




Other	530		495
Accrued expenses	$	1,848	$	1,942

Stock-Based Compensation (Tables)

9 Months Ended

Aug. 30, 2024

Share-Based Payment Arrangement [Abstract]

Restricted Stock Unit Activity

Restricted stock unit activity for the nine months ended August 30, 2024 was as follows:


	Number of Shares (in millions)	Weighted Average Grant Date Fair Value		Aggregate Fair Value (1) (in millions)
Beginning outstanding balance	7.8	$	418.63
Awarded	2.9	$	586.20
Released	(2.6)	$	441.45
Forfeited	(0.4)	$	449.34

Ending outstanding balance	7.7	$	472.50	$	4,436

Expected to vest	7.1	$	471.45	$	4,100

_________________________________________

(1) The aggregate fair value is calculated using the closing stock price as of August 30, 2024 of $574.41.

Performance Share Activity

Performance share activity for the nine months ended August 30, 2024 was as follows:


	Number of Shares (in millions)	Weighted Average Grant Date Fair Value		Aggregate Fair Value (1) (in millions)
Beginning outstanding balance	0.5	$	465.71
Awarded	0.2	$	645.40
Released	(0.1)	$	455.65
Forfeited	(0.1)	$	487.20
Ending outstanding balance	0.5	$	536.74	$	301

Expected to vest	0.5	$	534.50	$	277

_________________________________________

(1) The aggregate fair value is calculated using the closing stock price as of August 30, 2024 of $574.41.

Stock-Based Compensation, Income Statement Location

Total stock-based compensation costs included in our condensed consolidated statements of income for the three and nine months ended August 30, 2024 and September 1, 2023 were as follows:


	Three Months				Nine Months
(in millions)	2024		2023		2024		2023
Cost of revenue	$	30	$	30	$	90	$	88
Research and development	241		224		704		657
Sales and marketing	140		130		403		375
General and administrative	63		58		195		171
Total	$	474	$	442	$	1,392	$	1,291

Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Aug. 30, 2024

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) and activity, net of related taxes, were as follows:


(in millions)	December 1, 2023		Increase / Decrease		Reclassification Adjustments			August 30, 2024



Net unrealized gains / losses on available-for-sale securities	$	(12)	$	10	$	—	(1)	$	(2)
Net unrealized gains / losses on derivative instruments designated as hedging instruments	(26)		(59)		9		(2)	(76)
Cumulative foreign currency translation adjustments	(247)		16		—			(231)
Total accumulated other comprehensive income (loss), net of taxes	$	(285)	$	(33)	$	9		$	(309)

_________________________________________

(1)Reclassification adjustments for gains / losses on available-for-sale securities are classified in other income (expense), net.

Stock Repurchase Program (Tables)

9 Months Ended

Aug. 30, 2024

Stock Repurchase Program [Abstract]

Schedule of Repurchase Agreements

Share repurchase activity for the nine months ended August 30, 2024 and September 1, 2023 was as follows:


	Number of Shares Delivered (in millions)	Average Price Paid Per Share
Nine months ended August 30, 2024
Structured stock repurchase agreement entered into in fiscal 2023	0.6	$	626.68
ASR entered into in December 2023	3.5	$	578.11
ASR entered into in March 2024	5.2	$	475.94
ASR entered into in June 2024	3.6	$	—	(1)

Total shares delivered	12.9
Nine months ended September 1, 2023
Structured stock repurchase agreements entered into in fiscal 2022 and the nine months ended September 1, 2023	5.7	$	396.43
ASR entered into in December 2022	4.0	$	348.46
Total shares delivered	9.7

_________________________________________

Net Income Per Share (Tables)

9 Months Ended

Aug. 30, 2024

Earnings Per Share [Abstract]

Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share for the three and nine months ended August 30, 2024 and September 1, 2023:


	Three Months				Nine Months
(in millions, except per share data)	2024		2023		2024		2023
Net income	$	1,684	$	1,403	$	3,877	$	3,945

Shares used to compute basic net income per share	445.3		456.4		449.1		457.7
Dilutive potential common shares from stock plans and programs	2.3		3.1		2.7		1.5


Shares used to compute diluted net income per share	447.6		459.5		451.8		459.2

Basic net income per share	$	3.78	$	3.07	$	8.63	$	8.62
Diluted net income per share	$	3.76	$	3.05	$	8.58	$	8.59

Anti-dilutive potential common shares	2.0		0.5		1.8		3.5

Debt (Tables)

9 Months Ended

Aug. 30, 2024

Debt Disclosure [Abstract]

Carrying value of outstanding debt

The carrying value of our borrowings as of August 30, 2024 and December 1, 2023 were as follows:


(dollars in millions)	Issuance Date	Due Date	Effective Interest Rate	2024		2023
1.90% 2025 Notes	February 2020	February 2025	2.07%	$	500	$	500
3.25% 2025 Notes	January 2015	February 2025	3.67%	1,000		1,000
2.15% 2027 Notes	February 2020	February 2027	2.26%	850		850
4.85% 2027 Notes	April 2024	April 2027	5.03%	500		—
4.80% 2029 Notes	April 2024	April 2029	4.93%	750		—
2.30% 2030 Notes	February 2020	February 2030	2.69%	1,300		1,300
4.95% 2034 Notes	April 2024	April 2034	5.03%	750		—
Total debt outstanding, at par				$	5,650	$	3,650
Less: Current portion of debt, at par				(1,500)		—
Unamortized discount and debt issuance costs				(22)		(16)
Carrying value of long-term debt				$	4,128	$	3,634

Current portion of debt, at par				$	1,500	$	—
Unamortized discount and debt issuance costs				(1)		—
Carrying value of current debt				$	1,499	$	—

Revenue - Disaggregation of Revenue by Segment (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 30, 2024	Sep. 01, 2023	Aug. 30, 2024	Sep. 01, 2023
Segment Reporting Information
Revenue	$ 5,408	$ 4,890	$ 15,899	$ 14,361
Cost of revenue	554	580	1,742	1,720
Gross profit	$ 4,854	$ 4,310	$ 14,157	$ 12,641
Gross profit as a percentage of revenue	90.00%	88.00%	89.00%	88.00%
Digital Media
Segment Reporting Information
Revenue	$ 3,995	$ 3,594	$ 11,719	$ 10,500
Cost of revenue	137	161	489	455
Gross profit	$ 3,858	$ 3,433	$ 11,230	$ 10,045
Gross profit as a percentage of revenue	97.00%	96.00%	96.00%	96.00%
Digital Experience
Segment Reporting Information
Revenue	$ 1,354	$ 1,229	$ 3,970	$ 3,627
Cost of revenue	395	397	1,187	1,200
Gross profit	$ 959	$ 832	$ 2,783	$ 2,427
Gross profit as a percentage of revenue	71.00%	68.00%	70.00%	67.00%
Publishing and Advertising
Segment Reporting Information
Revenue	$ 59	$ 67	$ 210	$ 234
Cost of revenue	22	22	66	65
Gross profit	$ 37	$ 45	$ 144	$ 169
Gross profit as a percentage of revenue	63.00%	67.00%	69.00%	72.00%

Revenue - Disaggregation of Revenue by Geography (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 30, 2024	Sep. 01, 2023	Aug. 30, 2024	Sep. 01, 2023
Revenue
Revenue	$ 5,408	$ 4,890	$ 15,899	$ 14,361
Americas
Revenue
Revenue	3,241	2,943	9,539	8,601
EMEA
Revenue
Revenue	1,405	1,229	4,085	3,615
APAC
Revenue
Revenue	$ 762	$ 718	$ 2,275	$ 2,145

Revenue - Disaggregation of Digital Media Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 30, 2024	Sep. 01, 2023	Aug. 30, 2024	Sep. 01, 2023
Revenue
Revenue	$ 5,408	$ 4,890	$ 15,899	$ 14,361
Digital Media
Revenue
Creative Cloud	3,188	2,909	9,380	8,522
Document Cloud	807	685	2,339	1,978
Revenue	$ 3,995	$ 3,594	$ 11,719	$ 10,500

Revenue - Disaggregation of Subscription Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 30, 2024	Sep. 01, 2023	Aug. 30, 2024	Sep. 01, 2023
Disaggregation of Revenue
Revenue	$ 5,408	$ 4,890	$ 15,899	$ 14,361
Digital Media
Disaggregation of Revenue
Revenue	3,995	3,594	11,719	10,500
Digital Experience
Disaggregation of Revenue
Revenue	1,354	1,229	3,970	3,627
Publishing and Advertising
Disaggregation of Revenue
Revenue	59	67	210	234
Subscription
Disaggregation of Revenue
Revenue	5,180	4,631	15,156	13,521
Subscription \| Digital Media
Disaggregation of Revenue
Revenue	3,921	3,506	11,474	10,225
Subscription \| Digital Experience
Disaggregation of Revenue
Revenue	1,231	1,096	3,599	3,208
Subscription \| Publishing and Advertising
Disaggregation of Revenue
Revenue	$ 28	$ 29	$ 83	$ 88

Revenue - Additional Information (Details) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Aug. 30, 2024

Dec. 01, 2023

Disaggregation of Revenue

Trade receivables, net of allowances for doubtful accounts

$ 1,802

$ 2,224

^[1]

Unbilled receivables included in balance of trade receivables, net

Allowances for doubtful accounts

(17)

(16)

Contract assets

214

141

Deferred revenue

$ 5,910

5,950

Non-cancellable committed funds, deferred revenue, percentage

4.00%

Revenue recognized that was included in the beginning balance of deferred revenue

$ 1,070

$ 5,430

Remaining performance obligations

$ 18,140

Non-cancellable committed funds, remaining performance obligation, percentage

4.00%

Percent of remaining performance obligations expected to be recognized in next 12 months

69.00%

Capitalized contract acquisition costs

$ 717

656

Refund liabilities

107

$ 111

Refundable customer deposits

Disaggregation of Revenue

Deferred revenue

$ 44

[1]	The condensed consolidated balance sheet as of December 1, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Acquisitions - Additional Information (Details) - Figma - USD ($) $ in Billions	Dec. 17, 2023	Sep. 15, 2022
Business Acquisition
Total purchase price, intended		$ 20
Termination fee, mutual termination agreement	$ 1

Cash, Cash Equivalents and Short-Term Investments (Details) - USD ($) $ in Millions	Aug. 30, 2024	Dec. 01, 2023
Debt Securities, Available-for-Sale [Line Items]
Amortized cost	$ 7,517	$ 7,854
Unrealized gains	0	0
Unrealized losses	(2)	(12)
Estimated fair value	7,515	7,842
Cash \| Cash
Debt Securities, Available-for-Sale [Line Items]
Amortized cost	571	618
Unrealized gains	0	0
Unrealized losses	0	0
Estimated fair value	571	618
Total cash equivalents \| Money market funds
Debt Securities, Available-for-Sale [Line Items]
Amortized cost	6,622	6,498
Unrealized gains	0	0
Unrealized losses	0	0
Estimated fair value	6,622	6,498
Total cash equivalents \| Time deposits
Debt Securities, Available-for-Sale [Line Items]
Amortized cost		25
Unrealized gains		0
Unrealized losses		0
Estimated fair value		25
Total cash equivalents \| Total cash equivalents
Debt Securities, Available-for-Sale [Line Items]
Amortized cost		6,523
Unrealized gains		0
Unrealized losses		0
Estimated fair value		6,523
Total cash and cash equivalents \| Total cash and cash equivalents
Debt Securities, Available-for-Sale [Line Items]
Amortized cost	7,193	7,141
Unrealized gains	0	0
Unrealized losses	0	0
Estimated fair value	7,193	7,141
Short-term fixed income securities: \| Asset-backed securities
Debt Securities, Available-for-Sale [Line Items]
Amortized cost	6	15
Unrealized gains	0	0
Unrealized losses	0	0
Estimated fair value	6	15
Short-term fixed income securities: \| Corporate debt securities
Debt Securities, Available-for-Sale [Line Items]
Amortized cost	146	438
Unrealized gains	0	0
Unrealized losses	(1)	(4)
Estimated fair value	145	434
Short-term fixed income securities: \| U.S. agency securities
Debt Securities, Available-for-Sale [Line Items]
Amortized cost	13	13
Unrealized gains	0	0
Unrealized losses	0	(1)
Estimated fair value	13	12
Short-term fixed income securities: \| U.S. Treasury securities
Debt Securities, Available-for-Sale [Line Items]
Amortized cost	159	247
Unrealized gains	0	0
Unrealized losses	(1)	(7)
Estimated fair value	158	240
Total short-term investments \| Total short-term investments
Debt Securities, Available-for-Sale [Line Items]
Amortized cost	324	713
Unrealized gains	0	0
Unrealized losses	(2)	(12)
Estimated fair value	$ 322	$ 701

Cash, Cash Equivalents and Short-Term Investments - Estimated Fair Value (Details) $ in Millions	Aug. 30, 2024 USD ($)
Estimated fair value of short-term fixed income securities
Due within one year	$ 308
Due between one and two years	14
Total	$ 322

Fair Value Measurements - Financial Assets And Liabilities At Fair Value On A Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Aug. 30, 2024	Dec. 01, 2023
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Deferred compensation plan assets	$ 266	$ 206
Total assets	7,220	7,482
Total liabilities	51
Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents	6,622	6,498
Time deposits
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents		25
Asset-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	6	15
Corporate debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	145	434
U.S. agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	13	12
U.S. Treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	158	240
Foreign currency derivatives
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Foreign currency derivatives, asset, current	9	52
Foreign currency derivatives, asset, long-term	1
Foreign currency derivatives, liability, current	42	4
Foreign currency derivatives, liability, long-term	9
Fair Value, Inputs, Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Deferred compensation plan assets	266	206
Total assets	6,888	6,729
Total liabilities	0
Fair Value, Inputs, Level 1 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents	6,622	6,498
Fair Value, Inputs, Level 1 \| Time deposits
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents		25
Fair Value, Inputs, Level 1 \| Asset-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	0	0
Fair Value, Inputs, Level 1 \| Corporate debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	0	0
Fair Value, Inputs, Level 1 \| U.S. agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	0	0
Fair Value, Inputs, Level 1 \| U.S. Treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	0	0
Fair Value, Inputs, Level 1 \| Foreign currency derivatives
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Foreign currency derivatives, asset, current	0	0
Foreign currency derivatives, asset, long-term	0
Foreign currency derivatives, liability, current	0	0
Foreign currency derivatives, liability, long-term	0
Fair Value, Inputs, Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Deferred compensation plan assets	0	0
Total assets	332	753
Total liabilities	51
Fair Value, Inputs, Level 2 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents	0	0
Fair Value, Inputs, Level 2 \| Time deposits
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents		0
Fair Value, Inputs, Level 2 \| Asset-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	6	15
Fair Value, Inputs, Level 2 \| Corporate debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	145	434
Fair Value, Inputs, Level 2 \| U.S. agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	13	12
Fair Value, Inputs, Level 2 \| U.S. Treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	158	240
Fair Value, Inputs, Level 2 \| Foreign currency derivatives
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Foreign currency derivatives, asset, current	9	52
Foreign currency derivatives, asset, long-term	1
Foreign currency derivatives, liability, current	42	4
Foreign currency derivatives, liability, long-term	9
Fair Value, Inputs, Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Deferred compensation plan assets	0	0
Total assets	0	0
Total liabilities	0
Fair Value, Inputs, Level 3 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents	0	0
Fair Value, Inputs, Level 3 \| Time deposits
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Cash and cash equivalents		0
Fair Value, Inputs, Level 3 \| Asset-backed securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	0	0
Fair Value, Inputs, Level 3 \| Corporate debt securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	0	0
Fair Value, Inputs, Level 3 \| U.S. agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	0	0
Fair Value, Inputs, Level 3 \| U.S. Treasury securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Short-term investments:	0	0
Fair Value, Inputs, Level 3 \| Foreign currency derivatives
Fair Value, Balance Sheet Grouping, Financial Statement Captions
Foreign currency derivatives, asset, current	0	0
Foreign currency derivatives, asset, long-term	0
Foreign currency derivatives, liability, current	0	$ 0
Foreign currency derivatives, liability, long-term	$ 0

Fair Value Measurements - Additional Information (Details) $ in Millions	Aug. 30, 2024 USD ($)
Outstanding Notes \| Fair Value, Nonrecurring \| Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior notes, fair value	$ 5,530

Derivative Financial Instruments - Additional Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Aug. 30, 2024	Aug. 30, 2024	Sep. 01, 2023	Aug. 30, 2024	Sep. 01, 2023
Derivatives and Hedging
Net unrealized gains / losses on derivative instruments designated as hedging instruments, increase or decrease		$ (60)	$ 8	$ (59)	$ 0
Foreign Exchange Contract \| Cash Flow Hedging
Derivatives and Hedging
Maximum remaining maturity of foreign currency derivatives	24 months
Designated as Hedging Instrument \| Foreign Exchange Contract \| Cash Flow Hedging
Derivatives and Hedging
Maximumlength of time, foreign currency cash flow hedge	36 months
Foreign currency cash flow hedge gain (loss) to be reclassified during next 12 months	$ (52)	(52)		(52)
Designated as Hedging Instrument \| Foreign exchange forward contracts \| Cash Flow Hedging
Derivatives and Hedging
Net unrealized gains / losses on derivative instruments designated as hedging instruments, increase or decrease		$ (40)	$ 0	$ (40)	$ 0

Derivative Financial Instruments - Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions	Aug. 30, 2024	Dec. 01, 2023
Derivative, Fair Value, Net
Fair Value Asset Derivatives	$ 10	$ 52
Fair Value Liability Derivatives	51	4
Designated as Hedging Instrument \| Foreign exchange option contracts
Derivative, Fair Value, Net
Fair Value Asset Derivatives	5	42
Fair Value Liability Derivatives	0	0
Designated as Hedging Instrument \| Foreign exchange forward contracts
Derivative, Fair Value, Net
Fair Value Asset Derivatives	3	1
Fair Value Liability Derivatives	49	0
Derivatives not designated as hedging instruments \| Foreign exchange forward contracts
Derivative, Fair Value, Net
Fair Value Asset Derivatives	2	9
Fair Value Liability Derivatives	$ 2	$ 4

Goodwill and Other Intangibles - Additional Information (Details) - USD ($)

3 Months Ended

9 Months Ended

Aug. 30, 2024

May 31, 2024

Sep. 01, 2023

Aug. 30, 2024

Sep. 01, 2023

Dec. 01, 2023

^[1]

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

$ 12,814,000,000

$ 12,805,000,000

Goodwill, impairment

$ 0

Amortization of other intangible assets

84,000,000

$ 92,000,000

252,000,000

$ 284,000,000

Amortization included in cost of revenue

$ 41,000,000

$ 50,000,000

$ 125,000,000

$ 158,000,000

[1]	The condensed consolidated balance sheet as of December 1, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Goodwill and Other Intangibles - Other Intangible Assets (Details) - USD ($) $ in Millions	Aug. 30, 2024	Dec. 01, 2023
Finite-Lived Intangible Assets
Gross Carrying Amount	$ 2,494	$ 2,586
Accumulated Amortization	(1,636)	(1,498)
Net	858	1,088
Customer contracts and relationships
Finite-Lived Intangible Assets
Gross Carrying Amount	1,205	1,204
Accumulated Amortization	(713)	(619)
Net	492	585
Purchased technology
Finite-Lived Intangible Assets
Gross Carrying Amount	877	984
Accumulated Amortization	(664)	(647)
Net	213	337
Trademarks
Finite-Lived Intangible Assets
Gross Carrying Amount	376	376
Accumulated Amortization	(250)	(217)
Net	126	159
Other
Finite-Lived Intangible Assets
Gross Carrying Amount	36	22
Accumulated Amortization	(9)	(15)
Net	$ 27	$ 7

Goodwill and Other Intangibles - Amortization Expense In Future Period (Details) - Other intangibles $ in Millions	Aug. 30, 2024 USD ($)
Amortization Expense in Future Periods
Remainder of 2024	$ 83
2025	303
2026	151
2027	109
2028	66
Thereafter	126
Total expected amortization expense	$ 838

Accrued Expenses (Details) - USD ($)
$ in Millions

Aug. 30, 2024

Dec. 01, 2023

Accrued Expense

Accrued compensation and benefits

$ 504

$ 535

Accrued bonuses

447

547

Accrued corporate marketing

149

132

Sales and use taxes

111

122

Refund liabilities

107

111

Other

530

495

Accrued expenses

$ 1,848

$ 1,942

^[1]

[1]	The condensed consolidated balance sheet as of December 1, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Stock-Based Compensation - Restricted Stock Unit Activity (Details) $ / shares in Units, shares in Millions, $ in Millions	9 Months Ended
	Aug. 30, 2024 USD ($) $ / shares shares
Other
Share price (in usd per share)	$ 574.41
Restricted Stock Units
Share Activity
Beginning outstanding balance (in shares) \| shares	7.8
Awarded (in shares) \| shares	2.9
Released (in shares) \| shares	(2.6)
Forfeited (in shares) \| shares	(0.4)
Ending outstanding balance (in shares) \| shares	7.7
Expected to vest (in shares) \| shares	7.1
Weighted Average Grant Date Fair Value
Beginning outstanding balance, weighted average grant date fair value (in usd per share)	$ 418.63
Awarded, weighted average grant date fair value (in usd per share)	586.20
Released, weighted average grant date fair value (in usd per share)	441.45
Forfeited, weighted average grant date fair value (in usd per share)	449.34
Ending outstanding balance, weighted average grant date fair value (in usd per share)	472.50
Expected to vest, weighted average grant date fair value (in usd per share)	$ 471.45
Aggregate Fair Value
Ending outstanding balance, aggregate fair value \| $	$ 4,436
Expected to vest, aggregate fair value \| $	4,100
Other
Total fair value of restricted stock units vested \| $	$ 1,420

Stock-Based Compensation - Performance Share Activity (Details) $ / shares in Units, shares in Millions, $ in Millions	9 Months Ended
	Aug. 30, 2024 USD ($) $ / shares shares
Other
Share price (in usd per share)	$ 574.41
Performance Shares
Share Activity
Beginning outstanding balance (in shares) \| shares	0.5
Awarded (in shares) \| shares	0.2
Released (in shares) \| shares	(0.1)
Forfeited (in shares) \| shares	(0.1)
Ending outstanding balance (in shares) \| shares	0.5
Expected to vest (in shares) \| shares	0.5
Weighted Average Grant Date Fair Value
Beginning outstanding balance, weighted average grant date fair value (in usd per share)	$ 465.71
Awarded, weighted average grant date fair value (in usd per share)	645.40
Released, weighted average grant date fair value (in usd per share)	455.65
Forfeited, weighted average grant date fair value (in usd per share)	487.20
Ending outstanding balance, weighted average grant date fair value (in usd per share)	536.74
Expected to vest, weighted average grant date fair value (in usd per share)	$ 534.50
Aggregate Fair Value
Ending outstanding balance, aggregate fair value \| $	$ 301
Expected to vest, aggregate fair value \| $	$ 277
Other
Maximum target percentage	200.00%
Total fair value of performance shares vested \| $	$ 63
Performance Shares \| Program 2021
Other
Actual percentage achieved	83.00%

Stock-Based Compensation - Narrative (Details) - Employee Stock Purchase Plan - USD ($) $ / shares in Units, shares in Millions, $ in Millions	9 Months Ended
	Aug. 30, 2024	Sep. 01, 2023
Share-based Compensation Arrangement by Share-based Payment Award
Shares purchased, ESPP	1.2	1.1
Average purchase price of shares, ESPP ( in usd per share)	$ 298.53	$ 286.31
Total intrinsic value of shares purchased, ESPP	$ 324	$ 185

Stock-Based Compensation - Stock-Based Compensation, Income Statement Location (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Aug. 30, 2024	Sep. 01, 2023	Aug. 30, 2024	Sep. 01, 2023
Total stock-based compensation costs
Stock-based compensation costs	$ 474	$ 442	$ 1,392	$ 1,291
Cost of revenue
Total stock-based compensation costs
Stock-based compensation costs	30	30	90	88
Research and development
Total stock-based compensation costs
Stock-based compensation costs	241	224	704	657
Sales and marketing
Total stock-based compensation costs
Stock-based compensation costs	140	130	403	375
General and administrative
Total stock-based compensation costs
Stock-based compensation costs	$ 63	$ 58	$ 195	$ 171

Stock-Based Compensation - Additional Information (Details) $ in Millions	Aug. 30, 2024 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award
Unrecognized compensation cost, non-vested awards	$ 3,280
Period for recognition, unrecognized compensation cost	2 years 3 months 25 days

Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Millions

3 Months Ended

9 Months Ended

Aug. 30, 2024

Sep. 01, 2023

Aug. 30, 2024

Sep. 01, 2023

Net unrealized gains / losses on available-for-sale securities

Beginning balance, net unrealized gains / losses on available-for-sale securities

$ (12)

Net unrealized gains / losses on available-for-sale securities, increase or decrease

$ 3

$ 5

$ 19

Net unrecognized gains / losses on available-for-sale securities, reclassification adjustments

Ending balance, net unrealized gains / losses on available-for-sale securities

(2)

Net unrealized gains / losses on derivatives designated as hedging instruments

Beginning balance, net unrealized gains / losses on derivative instruments designated as hedging instruments

(26)

Net unrealized gains / losses on derivative instruments designated as hedging instruments, increase or decrease

(60)

(59)

Net unrealized gains / losses on derivative instruments designated as hedging instruments, reclassification adjustments

(4)

(28)

Ending balance, net unrealized gains / losses on derivative instruments designated as hedging instruments

(76)

Cumulative foreign currency translation adjustments

Beginning balance, cumulative foreign currency translation adjustments

(247)

Cumulative foreign currency translation adjustment, increase or decrease

$ 3

$ 12

Cumulative foreign currency translation adjustment, reclassification adjustments

Ending balance, cumulative foreign currency translation adjustments

(231)

Accumulated other comprehensive income totals

Beginning balance, total accumulated other comprehensive income, net of taxes

^[1]

(285)

Accumulated other comprehensive income, increase or decrease

(33)

Accumulated other comprehensive income, reclassification adjustments

Ending balance, total accumulated other comprehensive income, net of taxes

$ (309)

[1]	The condensed consolidated balance sheet as of December 1, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Stock Repurchase Program (Details) shares in Millions, $ in Millions	1 Months Ended	9 Months Ended
	Sep. 25, 2024 USD ($) shares	Aug. 30, 2024 USD ($) shares	Sep. 01, 2023 USD ($) shares	Mar. 14, 2024 USD ($)	Dec. 10, 2020 USD ($)
Stock Repurchase Program [Line Items]
Payments for repurchase of common stock		$ 7,000	$ 3,400
Repurchase of common stock, shares, acquired (in shares) \| shares		12.9	9.7
Subsequent Event
Stock Repurchase Program [Line Items]
Payments for repurchase of common stock	$ 2,500
Repurchase of common stock, shares, acquired (in shares) \| shares	3.6
Prepayment, percentage	0.75
Stock repurchase program, remaining authorized repurchase amount	$ 17,650
December 2020 Repurchase Authority
Stock Repurchase Program [Line Items]
Stock repurchase program, authorized amount					$ 15,000
March 2024 Repurchase Authority
Stock Repurchase Program [Line Items]
Stock repurchase program, authorized amount				$ 25,000
Accelerated Share Repurchase Agreement
Stock Repurchase Program [Line Items]
Payments for repurchase of common stock		$ 7,000	$ 1,400
Structured Stock Repurchase Agreement
Stock Repurchase Program [Line Items]
Payments for repurchase of common stock			$ 2,000
Repurchase of common stock, shares, acquired (in shares) \| shares		0.6	5.7
ASR entered into in June 2024
Stock Repurchase Program [Line Items]
Payments for repurchase of common stock		$ 2,500
Repurchase of common stock, shares, acquired (in shares) \| shares		3.6
ASR entered into in June 2024 \| Subsequent Event
Stock Repurchase Program [Line Items]
Repurchase of common stock, shares, acquired (in shares) \| shares	4.6

Stock Repurchase Program - Schedule of Repurchase Agreements (Details) - $ / shares shares in Millions	1 Months Ended	9 Months Ended
	Sep. 25, 2024	Aug. 30, 2024	Sep. 01, 2023
Stock Repurchase Program [Line Items]
Repurchase of common stock, shares, acquired (in shares)		12.9	9.7
Subsequent Event
Stock Repurchase Program [Line Items]
Repurchase of common stock, shares, acquired (in shares)	3.6
Structured Stock Repurchase Agreement
Stock Repurchase Program [Line Items]
Repurchase of common stock, shares, acquired (in shares)		0.6	5.7
Treasury stock acquired, average cost per share (in usd per share)		$ 626.68	$ 396.43
ASR entered into in December 2023
Stock Repurchase Program [Line Items]
Repurchase of common stock, shares, acquired (in shares)		3.5
Treasury stock acquired, average cost per share (in usd per share)		$ 578.11
March 2024 Accelerated Share Repurchase Agreement [Member]
Stock Repurchase Program [Line Items]
Repurchase of common stock, shares, acquired (in shares)		5.2
Treasury stock acquired, average cost per share (in usd per share)		$ 475.94
ASR entered into in December 2022
Stock Repurchase Program [Line Items]
Repurchase of common stock, shares, acquired (in shares)			4.0
Treasury stock acquired, average cost per share (in usd per share)			$ 348.46
ASR entered into in June 2024
Stock Repurchase Program [Line Items]
Repurchase of common stock, shares, acquired (in shares)		3.6
Treasury stock acquired, average cost per share (in usd per share)		$ 0
ASR entered into in June 2024 \| Subsequent Event
Stock Repurchase Program [Line Items]
Repurchase of common stock, shares, acquired (in shares)	4.6
Treasury stock acquired, average cost per share (in usd per share)	$ 546.30

Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Aug. 30, 2024	Sep. 01, 2023	Aug. 30, 2024	Sep. 01, 2023
Earnings Per Share [Abstract]
Net income	$ 1,684	$ 1,403	$ 3,877	$ 3,945
Shares used to compute basic net income per share (in shares)	445.3	456.4	449.1	457.7
Dilutive potential common shares from stock plans and programs (in shares)	2.3	3.1	2.7	1.5
Shares used to compute diluted net income per share (in shares)	447.6	459.5	451.8	459.2
Basic net income per share (in usd per share)	$ 3.78	$ 3.07	$ 8.63	$ 8.62
Diluted net income per share (in usd per share)	$ 3.76	$ 3.05	$ 8.58	$ 8.59
Anti-dilutive potential common shares (in shares)	2.0	0.5	1.8	3.5

Debt - Carrying Value of Outstanding Debt (Details) - USD ($)
$ in Millions

Aug. 30, 2024

Apr. 04, 2024

Dec. 01, 2023

Feb. 03, 2020

Jan. 21, 2015

Debt Instrument

Total debt outstanding, at par

$ 5,650

$ 3,650

Current portion of debt, at par

1,500

Unamortized discount and debt issuance costs

(22)

(16)

Carrying value of long-term debt

4,128

3,634

^[1]

Unamortized discount and debt issuance costs

(1)

Carrying value of current debt

$ 1,499

^[1]

Notes 1.90% 2025

Debt Instrument

Debt instrument, interest rate, stated percentage

1.90%

Debt instrument, interest rate, effective percentage

2.07%

Debt instrument, face amount

$ 500

500

$ 500

Notes 3.25% 2025

Debt Instrument

Debt instrument, interest rate, stated percentage

3.25%

Debt instrument, interest rate, effective percentage

3.67%

Debt instrument, face amount

$ 1,000

1,000

$ 1,000

Notes 2.15% 2027

Debt Instrument

Debt instrument, interest rate, stated percentage

2.15%

Debt instrument, interest rate, effective percentage

2.26%

Debt instrument, face amount

$ 850

850

Notes 4.85% 2027

Debt Instrument

Debt instrument, interest rate, stated percentage

4.85%

Debt instrument, interest rate, effective percentage

5.03%

Debt instrument, face amount

$ 500

Notes 4.80% 2029

Debt Instrument

Debt instrument, interest rate, stated percentage

4.80%

Debt instrument, interest rate, effective percentage

4.93%

Debt instrument, face amount

$ 750

750

Notes 2.30% 2030

Debt Instrument

Debt instrument, interest rate, stated percentage

2.30%

Debt instrument, interest rate, effective percentage

2.69%

Debt instrument, face amount

$ 1,300

1,300

$ 1,300

Notes 4.95% 2034

Debt Instrument

Debt instrument, interest rate, stated percentage

4.95%

Debt instrument, interest rate, effective percentage

5.03%

Debt instrument, face amount

$ 750

$ 0

[1]	The condensed consolidated balance sheet as of December 1, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Debt - Narrative (Details) - USD ($)
$ in Millions

9 Months Ended

Apr. 04, 2024

Aug. 30, 2024

Sep. 01, 2023

Dec. 01, 2023

Feb. 03, 2020

Jan. 21, 2015

Debt Instrument

Proceeds from issuance of debt

$ 1,997

$ 0

Carrying value of current debt

$ 1,499

$ 0

^[1]

Outstanding Notes

Debt Instrument

Repurchase notes at price of their principal amount plus accrued and unpaid interest

101.00%

Notes 1.90% 2025

Debt Instrument

Debt instrument, face amount

$ 500

500

$ 500

Notes 3.25% 2025

Debt Instrument

Debt instrument, face amount

1,000

$ 1,000

Notes 2.15% 2027

Debt Instrument

Debt instrument, face amount

850

Notes 2.30% 2030

Debt Instrument

Debt instrument, face amount

1,300

$ 1,300

Notes 4.85% 2027

Debt Instrument

Debt instrument, face amount

$ 500

500

Notes 4.80% 2029

Debt Instrument

Debt instrument, face amount

750

Notes 4.95% 2034

Debt Instrument

Debt instrument, face amount

750

$ 750

$ 0

Notes 4.85% 2027, 4.80% 2029, and 4.95% 2034

Debt Instrument

Proceeds from issuance of debt

1,990

Discount on debt issuance

Debt issuance costs

$ 9

[1]	The condensed consolidated balance sheet as of December 1, 2023 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Debt - Additional Information (Details) - USD ($)	Sep. 27, 2023	Jun. 30, 2022	Oct. 17, 2018	Aug. 30, 2024	Dec. 17, 2023	Jan. 19, 2023
Commercial Paper
Debt Instrument
Debt instrument, term	397 days
Maximum borrowing capacity	$ 3,000,000,000
Credit agreement, outstanding borrowings				$ 0
Term Loan Agreement
Debt Instrument
Debt instrument, face amount						$ 3,500,000,000
Credit agreement, outstanding borrowings					$ 0
Revolving Credit Facility
Debt Instrument
Debt instrument, term		5 years	5 years
Borrowing capacity		$ 1,500,000,000	$ 1,000,000,000
Option to request additional commitments on credit facility		500,000,000
Maximum borrowing capacity		$ 2,000,000,000
Credit agreement, outstanding borrowings				$ 0
Revolving Credit Facility \| Minimum
Debt Instrument
Commitment fee percentage		0.04%
Revolving Credit Facility \| Maximum
Debt Instrument
Commitment fee percentage		0.10%
Revolving Credit Facility \| Scenario iv
Debt Instrument
Percentage added to effective funds rate in determining interest rate		0.50%
Percentage added to SOFR in determining interest rate		1.00%
Revolving Credit Facility \| Scenario i, Scenario ii, Scenario iii \| Minimum
Debt Instrument
Margin added to SOFR and alternative currency rate to determine interest rate		0.46%
Revolving Credit Facility \| Scenario i, Scenario ii, Scenario iii \| Maximum
Debt Instrument
Margin added to SOFR and alternative currency rate to determine interest rate		0.90%