Adobe Inc. (NASDAQ:ADBE) Q2 2019 Earnings Conference Call June 18, 2019 5:00 PM ET
Mike Saviage - Vice President of Investor Relations
Shantanu Narayen - Chairman, President and Chief Executive Officer
John Murphy - Executive Vice President and Chief Financial Officer
- Mike Saviage - 投资者关系副总裁
- Shantanu Narayen - 董事长，总裁兼首席执行官
- John Murphy - 执行副总裁兼首席财务官
Brent Thill - Jefferies LLC
Jennifer Lowe - UBS Investment Bank
Keith Weiss - Morgan Stanley
Brad Zelnick - Credit Suisse
Saket Kalia - Barclays Capital
Sterling Auty - JPMorgan Chase & Co.
Kasthuri Rangan - Bank of America Merrill Lynch
Mark Moerdler - Sanford C. Bernstein & Co.
Jay Vleeschhouwer - Griffin Securities, Inc.
Kirk Materne - Evercore ISI
Thomas Roderick - Stifel, Nicolaus & Co., Inc.
Walter Pritchard - Citigroup
- Brent Thill - Jefferies LLC
- Jennifer Lowe - 瑞银投资银行
- 凯斯韦斯 - 摩根士丹利
- Brad Zelnick - 瑞士信贷
- Saket Kalia - 巴克莱资本
- Sterling Auty - 摩根大通公司
- Kasthuri Rangan - 美国银行美林证券
- Mark Moerdler - Sanford C. Bernstein＆Co。
- Jay Vleeschhouwer - 格里芬证券公司
- Kirk Materne - Evercore ISI
- Thomas Roderick - Stifel，Nicolaus＆Co.，Inc。
- 沃尔特普里查德 - 花旗集团
Good afternoon. I would like to welcome you to the Adobe Second Quarter Fiscal Year 2019 Earnings Conference Call. Today’s conference is being recorded. During today’s presentation, all lines will be muted, and we will take questions following the prepared remarks.
At this time, I would like to turn the call over to Mike Saviage, Vice President of Investor Relations. Please go ahead, sir.
下午好。 我想欢迎您参加Adobe第二季度2019财年盈利电话会议。 今天的会议正在录制中。 在今天的演讲中，所有线路都将被静音，我们将根据准备好的评论提出问题。
在这个时候，我想把这个电话交给投资者关系副总裁Mike Saviage。 请继续，先生。
Good afternoon, and thank you for joining us today. Joining me on the call are Adobe’s President and CEO, Shantanu Narayen; and John Murphy, Executive Vice President and CFO.
In our call today, we will discuss Adobe’s second quarter fiscal year 2019 financial results. By now, you should have a copy of our earnings press release which crossed the wire approximately one hour ago. We’ve also posted PDFs of our earnings call prepared remarks and slides, and an updated investor datasheet on adobe.com. If you would like a copy of these documents, you can go to Adobe’s Investor Relations page and find them listed under Quick Links.
Before we get started, we want to emphasize that some of the information discussed in this call, particularly our revenue and operating model targets, and our forward-looking product plans, is based on information as of today, June 18, 2019, and contains forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the forward-looking statements disclosure in the earnings press release we issued today, as well as Adobe’s SEC filings.
On this call, we will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in our earnings release and on Adobe’s Investor Relations website.
Call participants are advised that the audio of this conference call is being webcast live, and is also being recorded for playback purposes. An archive of the webcast will be made available on Adobe’s Investor Relations website for approximately 45 days, and is the property of Adobe. The call audio and the webcast archive may not be re-recorded or otherwise reproduced or distributed without prior written permission from Adobe.
I will now turn the call over to Shantanu.
下午好，谢谢你今天加入我们。加入我的是Adobe的总裁兼首席执行官Shantanu Narayen;和John Murphy，执行副总裁兼首席财务官。
Thanks, Mike, and good afternoon. Q2 was another strong quarter for Adobe, with record revenue and continued growth across Adobe Creative Cloud, Adobe Document Cloud, and Adobe Experience Cloud. We delivered $2.74 billion in revenue in Q2, representing 25% year-over-year growth. GAAP earnings per share for the quarter was $1.29, and non-GAAP earnings per share was $1.83.
Adobe’s solutions have become the standard for creating and managing the world’s digital experiences. Millions of consumers depend on brands like Photoshop and PDF for their personal and professional pursuits. Thousands of enterprises the world over are turning to Adobe every day to help them transform their businesses.
The power of our brand, the continuous innovation in our products and services, the deep investment we are making in our technology platforms, and a robust ecosystem of partners are enabling us to serve millions of customers around the globe. We are creating large, addressable markets in the creativity, document, and customer experience management categories. Our opportunity has never been greater.
In our Digital Media business, we drove strong revenue growth in both Creative Cloud and Document Cloud in Q2. Net new Digital Media annualized recurring revenue, or ARR, was $406 million, and total Digital Media ARR exiting Q2 grew to $7.47 billion.
Q2 Creative revenue was $1.59 billion, which represents 22% year-over-year growth. Mobile is a tailwind in our Digital Media business and we are driving significant increases in mobile traffic and member sign-ups for our offerings.
This is the golden age of creativity, and our vision for Creative Cloud is to be the creativity platform for all. Whether you are a student, an experience designer, a YouTuber, or a marketer, storytelling is central to the way you communicate and connect.
The key part of our Creative Cloud growth strategy is appealing to new segments of users. Adobe Spark, our offering for easily turning ideas into compelling stories, graphics, and webpages, is rapidly gaining popularity among creators from the classroom to the boardroom.
Spark traffic on web and mobile has more than doubled year-over-year. In Q2 we expanded Spark’s global footprint with support for five new languages: Brazilian-Portuguese, French, German, Italian, and Spanish.
We’ve expanded our vision of platforms to include social media channels like Facebook, Instagram, and YouTube. Premiere Rush is rapidly becoming the solution of choice for YouTubers and social video creators. Premiere Rush is now available on Android in addition to iOS, Mac, and Windows.
Experience design is one of the most explosive creative categories and we continue to innovate in this space with Adobe XD, our design system for UX and UI. We released a major update to Adobe XD in May enabling teams to create and share designs to enhance both productivity and collaboration.
In Q2, we drove strong subscription growth across our flagship photography and digital video offerings. At NAB in Las Vegas, we unveiled new innovations across Premiere Pro, Audition, Character Animator, and After Effects. One exciting announcement was the availability of the Content-Aware Fill feature in After Effects, powered by Adobe Sensei, which magically enables editors to seamlessly remove unwanted objects from video, saving hours of tedious manual work. It won five awards at the show, including the NAB Show Product of the Year Award.
谢谢，迈克，下午好。 Q2是Adobe的另一个强劲季度，创新收入和Adobe Creative Cloud，Adobe Document Cloud和Adobe Experience Cloud的持续增长。我们在第二季度实现了27.4亿美元的收入，同比增长了25％。本季度GAAP每股收益为1.29美元，非GAAP每股收益为1.83美元。
在我们的数字媒体业务中，我们在第二季度推动了Creative Cloud和Document Cloud的强劲收入增长。净新数字媒体年度经常性收入（ARR）为4.06亿美元，第二季度的数字媒体ARR总量增长至74.7亿美元。
我们的Creative Cloud增长战略的关键部分是吸引新的用户群体。 Adobe Spark，我们的产品，可以轻松地将想法转化为引人入胜的故事，图形和网页，在教室和会议室之间的创作者中迅速普及。
我们扩展了我们的平台愿景，包括Facebook，Instagram和YouTube等社交媒体渠道。 Premiere Rush正迅速成为YouTubers和社交视频创作者的首选解决方案。除iOS，Mac和Windows外，Premiere Rush现在可在Android上使用。
体验设计是最具爆炸性的创意类别之一，我们将继续使用Adobe XD（用户体验和用户界面设计系统）在这一领域进行创新。我们在5月份发布了Adobe XD的重大更新，使团队能够创建和共享设计，以提高工作效率和协作。
在第二季度，我们推动了旗舰摄影和数字视频产品的强劲订阅增长。在拉斯维加斯的NAB，我们在Premiere Pro，Audition，Character Animator和After Effects上推出了新的创新。一个激动人心的宣布是由Adobe Sensei提供支持的After Effects中的内容感知填充功能，它可以让编辑无缝地从视频中删除不需要的对象，从而节省了数小时的繁琐手工操作。它在展会上获得了五个奖项，包括NAB年度产品奖。
We continue to expand Creative Cloud with value-added services. Adobe Stock, our fast-growing service for stock images, videos, and millions of additional creative assets grew greater than 25% year-over-year.
We are proud of the role our solutions play in inspiring the global creative community and shaping popular culture. This quarter, we launched a creative campaign with 17-year-old music sensation Billie Eilish, which inspired significant participation among our important Student segment.
With Adobe Document Cloud, we are reinventing how people scan, edit, collaborate, sign, and share documents in the cloud and mobile era. Document Cloud revenue in Q2 was a record $296 million and we grew Document Cloud ARR to $921 million driven by continued strength in Acrobat subscription adoption.
Mobile is the next frontier for digital documents and our flagship apps. Adobe Reader for mobile and Adobe Scan, continue to gain traction. Adobe Scan, which allows you to capture everything from documents to forms, whiteboard sketches or business cards, and turn them into picture-perfect, high-quality PDFs is now the leading scanning app on iOS and Android.
We are driving adoption for Adobe Sign, our cloud-based electronic signature solution, with customers including Merck, Hitachi, and Iowa State University. They are using Adobe Sign to provide a better customer experience, close contracts, and win business.
In our Digital Experience business, we achieved record Experience Cloud revenue of $784 million for the quarter, which represents 34% year-over-year growth. To win in today’s competitive landscape, businesses must become more customer-centric and data-driven.
Our vision for Adobe Experience Cloud is to enable businesses to reimagine the entire customer journey using data to understand and drive their business from discovery through trial, purchase, use, and renewal. At the core of Adobe’s own transformation has been our use of Adobe Experience Cloud.
B2B and B2C companies across every country and industry are choosing Adobe Experience Cloud, the only end-to-end solution for marketing, advertising, analytics and commerce to master the art and science of Customer Experience Management. Key Experience Cloud customer wins in Q2 include Amazon, Rite Aid, Vodafone and Wyndham Hotels.
The acquisitions of Magento and Marketo have significantly increased our value to existing customers, helped us attract new logos, and expanded Adobe’s addressable opportunity. Magento adds to our Experience Cloud vision by allowing us to make every moment personal, and every experience shoppable in addition to attracting a large and vibrant developer community to Adobe.
This quarter, we announced the availability of Adobe Commerce Cloud, built on the Magento Commerce platform, with deep integrations across Adobe Analytics Cloud, Marketing Cloud, and Advertising Cloud.
We announced a new partnership with Amazon, creating Magento Commerce branded stores for Amazon sellers, which will give merchants a more seamless way to manage their business across both Amazon.com and their own storefront.
我们通过增值服务继续扩展Creative Cloud。 Adobe Stock，我们快速增长的库存图片，视频和数百万其他创意资产服务同比增长超过25％。
借助Adobe Document Cloud，我们正在重塑人们在云和移动时代扫描，编辑，协作，签名和共享文档的方式。第二季度的文档云收入达到创纪录的2.96亿美元，随着Acrobat订阅采用的持续增长，我们将Document Cloud ARR增长到9.21亿美元。
移动是数字文档和我们的旗舰应用的下一个前沿。 Adobe Reader for mobile和Adobe Scan继续受到关注。 Adobe Scan允许您捕获从文档到表单，白板草图或名片的所有内容，并将它们转换为图片完美的高质量PDF，现在是iOS和Android上领先的扫描应用程序。
我们正在推动采用我们基于云的电子签名解决方案Adobe Sign，其客户包括默克，日立和爱荷华州立大学。他们使用Adobe Sign提供更好的客户体验，签订合同并赢得业务。
我们对Adobe体验云的愿景是使企业能够使用数据重新构想整个客户的旅程，从而从发现到试用，购买，使用和续订，了解并推动其业务发展。 Adobe自身转型的核心是我们使用Adobe Experience Cloud。
遍布各个国家和行业的B2B和B2C公司正在选择Adobe Experience Cloud，这是市场营销，广告，分析和商业领域唯一的端到端解决方案，可以掌握客户体验管理的艺术和科学。关键体验云客户在第二季度获胜包括亚马逊，Rite Aid，Vodafone和Wyndham Hotels。
本季度，我们宣布推出基于Magento Commerce平台的Adobe Commerce Cloud，并在Adobe Analytics Cloud，Marketing Cloud和Advertising Cloud之间进行深度集成。
With the addition of Marketo, Adobe provides the leading marketing engagement platform for both B2B and B2C customers. We’ve deepened the integration between Adobe Marketing Cloud and Marketo Engage. We are leveraging Adobe Sensei, so companies can deliver the right experiences to the right people at the right time.
This quarter, we announced our partnership with LinkedIn, empowering B2B marketers and sellers to easily identify, understand and engage B2B customer buying teams.
At Summit, we announced the global availability of Adobe Experience Platform, the industry’s first real-time platform for Customer Experience Management. Adobe Experience Platform provides real-time CDP and DMP capabilities, and stitches together data from across the enterprise, creating real-time customer profiles and enabling the activation and delivery of hyper-personalized experiences.
Some of the world’s leading brands are already using Adobe Experience Platform in beta, including Best Buy, Sony Interactive Entertainment, The Home Depot and Verizon Wireless.
We’ve built a strong ecosystem of global partners. Recently, we announced new partnerships with ServiceNow and Software AG. We will deliver integration between Adobe Experience Platform and the ServiceNow Platform as well as with Software AG’s webMethods platform.
Adobe and Marketo were both positioned as leaders by Gartner in the Magic Quadrant for multichannel marketing hubs. Among the 21 companies evaluated, Adobe achieved the strongest position for Completeness of Vision. Adobe Experience Cloud was recently named a leader in the Gartner Magic Quadrant for Digital Experience Platforms.
Adobe Marketing Cloud, Advertising Cloud and Analytics Cloud were reviewed and successfully validated by TrustArc, making Adobe the first company in the digital experience space to receive TRUSTe GDPR Privacy Practices Compliance Validation.
Our mission to change the world through digital experiences gives purpose to the work we do. We are proud Adobe was honored with a Hope Award from the National Center for Missing and Exploited Children. For more than a decade, Adobe has been partnering with NCMEC through software contributions and technical expertise in service of its important mission to find missing children and prevent child exploitation and victimization.
At Adobe, our employees are our greatest asset and we continue to invest in our future talent. This summer we’re pleased to welcome more than a thousand interns and new grads to Adobe from more than 150 schools around the world.
Our strategy of empowering people to create and transforming how businesses compete offers a unique value-proposition in the market, and large addressable opportunities to grow our business.
FY2019 is expected to be another record year. We expect the first half momentum to continue in the second half. Our revenue growth, cash flow, and operating profit differentiates us among SaaS companies at scale. John?
随着Marketo的加入，Adobe为B2B和B2C客户提供了领先的营销参与平台。我们加深了Adobe Marketing Cloud与Marketo Engage之间的整合。我们正在利用Adobe Sensei，因此公司可以在合适的时间为合适的人员提供合适的体验。
在Summit，我们宣布全球推出Adobe Experience Platform，这是业界第一个客户体验管理实时平台。 Adobe Experience Platform提供实时CDP和DMP功能，并将来自整个企业的数据拼接在一起，创建实时客户配置文件，并支持激活和交付超个性化体验。
我们建立了一个强大的全球合作伙伴生态系统。最近，我们宣布与ServiceNow和Software AG建立新的合作伙伴关系。我们将提供Adobe Experience Platform和ServiceNow平台以及Software AG的webMethods平台之间的集成。
Adobe和Marketo都被Gartner列为多渠道营销中心魔力象限的领导者。在评估的21家公司中，Adobe在Completeness of Vision中取得了最强的地位。最近，Adobe Experience Cloud被评为Gartner数字体验平台魔力象限的领导者。
Adobe Marketing Cloud，Advertising Cloud和Analytics Cloud经过TrustArc的审核和成功验证，使Adobe成为数字体验领域的第一家获得TRUSTe GDPR隐私实践合规性验证的公司。
Thanks, Shantanu. As with last quarter, we are reporting results based on our adoption of ASC 606 this fiscal year. As a reminder, our results in the year ago fiscal period were reported based on ASC 605. We have not adjusted our prior fiscal year reported numbers for comparison purposes under ASC 606.
In Q2 FY2019, Adobe achieved record revenue of $2.74 billion, which represents 25% year-over-year growth. GAAP diluted earnings per share in Q2 was $1.29 and non-GAAP diluted earnings per share was $1.83.
Business and financial highlights in Q2 included record Digital Media revenue of $1.89 billion, including Creative revenue of $1.59 billion and Adobe Document Cloud revenue of $296 million, strong net new Digital Media ARR of $406 million, record Digital Experience revenue of $784 million, Remaining Performance Obligation, or RPO, grew to $8.37 billion, cash flow from operations of $1.11 billion, repurchasing 2.5 million shares of our stock through stock buyback, and approximately 91% of our revenue in Q2 was from recurring sources.
In our Digital Media segment, we achieved record revenue with 22% year-over-year growth. The addition of $406 million net new Digital Media ARR during the quarter grew the total to $7.47 billion. Within Digital Media, we achieved another strong quarter with our Creative business. Creative revenue grew 22% year-over-year in Q2 and we increased Creative ARR by $341 million.
Notable growth drivers in Q2 across conversion, upsell and retention included new user growth driven by numerous global initiatives to generate demand, including targeted campaigns and promotions, leveraging the funnel of users coming to Creative Cloud through mobile apps and online engagement, and continued focus on new categories including immersive media and new segments such as social media creators, Creative Cloud Photography plan subscriptions, Adobe Premiere Pro single app subscriptions in the video category, Creative Cloud enterprise, including customer acquisition, seat expansion and services adoption, and adoption of Adobe Stock, where revenue and subscription growth rates remain strong.
We achieved record Document Cloud revenue of $296 million in Q2, which represents 22% year-over-year growth, and we added $65 million of net new Document Cloud ARR during the quarter.
The growth in the Document Cloud business was driven by strong demand on Adobe.com, the continued migration of Acrobat perpetual customers to subscriptions, enterprise services adoption, and monetization of mobile app use. In addition, Adobe Sign achieved another strong quarter of growth.
In our Digital Experience segment, we achieved record quarterly Experience Cloud revenue of $784 million, which represents 34% year-over-year growth. Experience Cloud subscription revenue was a record $654 million.
Business performance in Digital Experience during the quarter was driven by strength in Adobe Marketing Cloud, including Adobe Experience Manager, Adobe Target and Adobe Campaign, multi-solution digital transformation engagements, and traction with cross-selling Magento and Marketo in the enterprise.
谢谢，Shantanu。与上一季度一样，我们根据本财年采用ASC 606报告结果。提醒一下，我们在一年前的财政期间的结果是根据ASC 605报告的。我们没有调整我们之前的财政年度报告数据，以便在ASC 606下进行比较。
第二季度的商业和金融亮点包括创新数字媒体收入18.9亿美元，其中创意收入为15.9亿美元，Adobe Document Cloud收入为2.96亿美元，强劲净新数字媒体ARR为4.06亿美元，创纪录的数字体验收入为7.84亿美元，余下表现债务或RPO增长至83.7亿美元，运营现金流为11.1亿美元，通过股票回购回购250万股股票，第二季度约91％的收入来自经常性资金来源。
第二季度转化，追加销售和保留的显着增长动力包括新的用户增长，这是由众多全球性需求产生的，包括有针对性的活动和促销，利用通过移动应用和在线互动来到Creative Cloud的用户渠道，并继续关注新的类别，包括沉浸式媒体和新细分，如社交媒体创作者，Creative Cloud Photography计划订阅，视频类别中的Adobe Premiere Pro单一应用订阅，Creative Cloud企业，包括客户获取，座位扩展和服务采用，以及Adobe Stock的采用，收入和订阅增长率保持强劲。
本季度数字体验的业绩表现受到Adobe Marketing Cloud的强势推动，包括Adobe Experience Manager，Adobe Target和Adobe Campaign，多解决方案数字转型业务，以及在企业中交叉销售Magento和Marketo的牵引力。
During Q2, we continued to focus on driving Magento and Marketo synergies, including organizational, product and go-to-market alignment. Both Magento and Marketo were prominently featured at Summit events in the U.S. and Europe, and we also held Magento Imagine and Marketo Marketing Nation events during Q2.
The depth and breadth of our enterprise partner ecosystem remains a competitive advantage contributing to pipeline generation, customer success as well as financial performance. We had another successful quarter of selling alongside Microsoft, where our combined value proposition is resonating with enterprise customers.
Our overall financial results were negatively affected by currency rate movements. Total Adobe Q2 year-over-year revenue growth would have been 27% if measured in constant currency, and year-to-date, total first half FY2019 year-over-year revenue growth would have been 26% if measured in constant currency.
More specifically in Q2, from a quarter-over-quarter currency perspective, FX decreased revenue by $4.9 million. We had $9 million in hedge gains in Q2 FY2019, versus $8.5 million in hedge gains in Q1 FY2019 thus, the net sequential currency decrease to revenue considering hedging gains was $4.4 million.
From a year-over-year currency perspective, FX decreased revenue by $45.3 million. The $9 million in hedge gains in Q2 FY2019 versus $0.3 million in hedge gains in Q2 FY2018 resulted in a net year-over-year currency decrease to revenue considering hedging gains of $36.6 million. In Q2, Adobe’s effective tax rate was 11% on a GAAP and non-GAAP basis.
Our trade DSO was 42 days, which compares to 44 days in the year-ago quarter, and 46 days last quarter. Remaining Performance Obligation, or RPO was approximately $8.37 billion exiting Q2, which compares to $8.13 billion exiting Q1.
Deferred revenue exiting Q2 was $3.13 billion. The sequential decline in deferred revenue was a result of timing rather than business performance due to fewer billing cycles in our second quarter. The impact was more than offset by an increase in unbilled backlog. Our ending cash and short-term investment position exiting Q2 was $3.48 billion, and cash flow from operations was $1.11 billion in the quarter.
In Q2, we repurchased approximately 2.5 million shares at a cost of $659 million. We currently have $6.6 billion remaining of our $8 billion repurchase authority granted in May 2018 which goes through 2021.
Now I will discuss our financial targets. As a reminder, our Q3 includes the summer months of June, July and August and we expect normal seasonality to influence our results during the quarter.
In Q3 FY2019, we are targeting revenue of approximately $2,800,000,000, Digital Media segment year-over-year revenue growth of approximately 20%, net new Digital Media ARR of approximately $360 million, Digital Experience segment year-over-year revenue growth of approximately 34%, other expense of approximately $22 million, tax rate of approximately 11% on a GAAP and non-GAAP basis, share count of approximately 491 million shares, GAAP earnings per share of approximately $1.40, and non-GAAP earnings per share of approximately $1.95.
在第二季度，我们继续专注于推动Magento和Marketo的协同效应，包括组织，产品和市场一致性。 Magento和Marketo都在美国和欧洲的Summit活动中占据突出地位，我们还在第二季度举办了Magento Imagine和Marketo Marketing Nation活动。
As usual, we are not updating annual targets at this time of the year. We are pleased with our first half performance and we expect our first half momentum to continue in the second half, with typical seasonality in Q3 and strength in Q4. We continue to expect sequential operating margin growth as we move through the second half of the year.
I’ll now turn the call back over to Mike.
像往常一样，我们不会在一年中的这个时候更新年度目标。 我们对上半场的表现感到满意，我们预计下半场将继续保持上半年的势头，第三季度的典型季节性和第四季度的强势。 随着我们进入下半年，我们继续预计连续经营利润率将会增长。
Thanks, John. Adobe MAX, our user conference focused on our Digital Media solutions, will occur during the first week of November this year in Los Angeles. On day one at MAX on Monday, November 4, we plan to host a financial analyst meeting. Invitations, including discounted registration information, will be sent to our analyst and investor email list later this summer. More information about the event can be found online at max.adobe.com.
If you wish to listen to a playback of today’s conference call, a webcast archive of the call will be available on our IR site later today. Alternatively, you can listen to a phone replay by calling 888-203-1112, use conference ID number 2843011. International callers should dial 719-457-0820. The phone playback service will be available beginning at 5:00 pm Pacific Time today and ending at 5:00 pm Pacific Time on June 25, 2019.
We would now be happy to take your questions, and we ask that you limit your questions to one per person. Operator?
谢谢，约翰。 Adobe MAX是我们专注于数字媒体解决方案的用户会议，将于今年11月的第一周在洛杉矶举行。 在11月4日星期一MAX的第一天，我们计划举办一次金融分析师会议。 邀请函，包括打折的注册信息，将在今年夏天晚些时候发送给我们的分析师和投资者电子邮件列表。 有关该活动的更多信息，请访问max.adobe.com。
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Thank you. [Operator Instructions] We'll take our first question from Brent Thill with Jefferies. Please go ahead.
谢谢。 [操作员说明]我们将与Jefferies一起讨论Brent Thill的第一个问题。 请继续。
Thanks. Good afternoon. Shantanu, just on Magento and Marketo, just curious if you could give us your updated thoughts on the integration? How you're doing in the field? And some of the customer traction on both those acquisitions, that would be helpful? Thank you.
谢谢。 下午好。 Shantanu，就在Magento和Marketo上，只是好奇你是否可以向我们提供关于集成的最新想法？ 你是如何在这个领域做的？ 而且这些收购的一些客户牵引力，这会有所帮助吗？ 谢谢。
Sure, Brent. Both of them are actually big picture going really well. We have, as you saw, started to integrate the products, the delivery of the Adobe Commerce Cloud that was based on Magento Commerce. We announced some good partnerships there as well as it relates to what we are doing with Amazon to allow multiple small and medium businesses to be able to deliver their storefronts based on this combined technology.
We did some good work as it related to integration between the Adobe Experience Manager as well as the Adobe Commerce Cloud, so you can now have in a single digital foundation the ability to do web content management, analytics as well as commerce. So product integration with Magento is going well.
I think on the go-to-market efforts, the enterprise motion that we have, which is clearly a strength of Adobe, we are putting the Magento solutions through that enterprise go-to-market motion. We've also done a good job, I think of integrating the mid-market, small and medium business, whatever you want to call it, the Magento and Marketo because the combination of both of them give us a little bit more heft in the marketplace.
And on Marketo as well, I mean, it's clearly a fabulous SaaS platform for engagement as it relates to B2B marketing, the focus there has been on both integration with Adobe Analytics as well as making sure that the combination of Campaign and Marketo will be the best B2E, which is what we call sort of the business to everyone engagement platform.
So pleased with it, results are good, continued focus and I think that's one of the reasons why we are aligning the organizations more rapidly to make sure that we get the appropriate alignment.
当然，布伦特。他们两个实际上都是非常好的。正如您所见，我们已经开始整合产品，即基于Magento Commerce的Adobe Commerce Cloud的交付。我们在那里宣布了一些良好的合作伙伴关系，以及它与我们在亚马逊上做的事情有关，允许多家中小型企业能够基于这种组合技术提供他们的店面。
我们做了一些很好的工作，因为它涉及Adobe Experience Manager和Adobe Commerce Cloud之间的集成，因此您现在可以在单个数字基础中拥有进行Web内容管理，分析和商务的能力。所以与Magento的产品整合进展顺利。
And we'll take our next question from Jennifer Lowe with UBS. Please go ahead.
我们将接受Jennifer Lowe与UBS的下一个问题。 请继续。
Great. Thank you. It was nice to see the net new ARR outperformance this quarter. So it sounds like it was a few different things there, but just any more color on what drove the upside would be great. In particular, I know last quarter there were some unusual items in there. I just want to check was there anything unusual this quarter. And maybe just around it out, as we think about seasonality into Q3, it looks like the guide implies a bit more seasonality than what we saw last year, anything to keep in mind there as well? Thanks.
非常好。 谢谢。 很高兴看到本季度净新ARR表现优异。 所以这听起来像是一些不同的东西，但只是推动上行的更多颜色将是伟大的。 特别是，我知道上个季度有一些不寻常的项目。 我只是想检查这个季度有什么不寻常之处。 也许只是围绕它，当我们考虑季节性进入第三季度时，看起来指导意味着比我们去年看到的更多季节性，还有什么值得记住的？ 谢谢。
Yes. I think big picture, Jennifer, Digital Media, we continue to do really well. We had, as you point out a great Q2 achieving I think $406 million in net new ARR, which is a record for Q2. Certainly, I think in terms of the different offerings, as John mentioned in his prepared remarks, we are seeing traction on the video offerings, we're seeing traction with enterprise adoption, services, both Stock and Sign are continuing to perform quite well, international expansion continues to be an area of opportunity as well as new customer acquisition through the marketing campaigns that we have.
And if you think about, as you pointed out again, the $360 million target that we're putting for Q3, which would be a record for a Q3 and then you add to that what the $750 million plus in ARR for the first half, I mean it's clear that the momentum continues in the business, I think to your question around seasonality and color.
I think it's our expectation that net new DM ARR in Q4 would be similar to what we had last year in Q4. And so, if you add that all up, it implies that we will have record new ARR again in 2019. And I think underlying all of that, as we've outlined to you is the DDOM model that we have, it allows us to optimize our marketing spend, it allows us to engage better with customers, and MAX should be another great show for that business. One thing I should also mention, sorry, is that, Acrobat continues to, as you clearly saw from the results, do really well.
Great. Thank you.
And we'll take our next question from Keith Weiss with Morgan Stanley. Please go ahead. Hi, Keith, your line is open. You may be on mute.
我们将从摩根士丹利的Keith Weiss那里得到我们的下一个问题。 请继续。 嗨，基思，你的线是敞开的。 你可能在静音。
Sorry about that, I was on mute. Thank you for taking the question and very nice quarter. I wanted to touch based on kind of leadership on the Digital Experience side of the equation. I'm kind of – what the current thought process is, I'm sure Shantanu, you're doing a great job sort of with leadership there, but are we planning on replacing Brad and kind of what's the sort of the game plan for rolling out new leadership and how sort of the new assets are going to sit under that new leadership plan?
对不起，我在静音。 谢谢你提出问题和非常好的季度。 我想根据数字体验方面的领导力来触摸。 我有点 - 目前的思维过程是什么，我敢肯定Shantanu，你在那里做领导做得很好，但我们是否计划取代布拉德以及那种类似于什么样的游戏计划呢？ 推出新的领导层以及新资产将如何处于新的领导计划之下？
Thanks, Keith, for the question. It's such a large opportunity that we're completely convinced, I am that the focus on the aligned organization was the right choice. It's been great. I focus a lot of time on the customer, just I think over the last 10 days three Fortune 100 CEOs have come in to talk to us about our view and our vision for digital transformation, spent a lot of time on the product to make sure that we get great alignment.
You've seen the general availability of the Adobe Experience Platform, the Artificial Intelligence features that we're now in beta attribution and customer journey. We've signed some great partnerships with Software AG and ServiceNow. And really, I've been trying to focus also the organization on a lot more with respect to customer centricity.
I think as we've aligned the two acquisitions of Magento and Marketo, which we've outlined to you, Keith, was a priority. We brought the same rigor that we have in DDOM for creating that cadence and customer centricity for pipeline progression, for marketing demand generation, as well as for the software delivery lifecycle. And so, I'm really also pleased with how the current management team, which is extremely strong and has stepped up and is executing an alignment.
So, while the search continues, we haven't missed a beat and I've been spending a lot of time, which just continues to give me a lot of faith in the long-term opportunity associated with the business and it's not hampering the progress at all in terms of what we need to do.
您已经看到Adobe Experience Platform的普遍可用性，人工智能功能，我们现在处于测试归因和客户旅程。我们与Software AG和ServiceNow签署了一些很好的合作伙伴关系。实际上，我一直在努力将组织重点放在以客户为中心的更多方面。
Excellent. Sounds great.
And we'll take our next question from Brad Zelnick with Credit Suisse. Please go ahead.
我们将接受Brad Zelnick与瑞士信贷的下一个问题。 请继续。
Excellent. Thanks so much, and congrats as well on a great quarter. Shantanu, on customer data platforms, there's been a lot of recent news from Adobe as well as some of your competitors launching their own CDP offerings. How will Adobe Experience Platform differentiate from peers? And why is your product going to be better and wining the market?
优秀。 非常感谢，并祝贺一个伟大的季度。 Shantanu，在客户数据平台上，最近有很多来自Adobe的新闻以及一些竞争对手推出自己的CDP产品。 Adobe Experience Platform如何与同行区别开来？ 为什么您的产品会变得更好并赢得市场？
It's a good question, Brad. And I think fundamentally it stems from the fact that when you have the leading content management platform, we have the data and I think that continues to differentiate us in terms of the customer interaction across different channel points.
We've been talking to you for a couple of years of the investment that we've made in the Adobe Experience Platform, the vision there has always been not only to integrate all of our existing solutions, so we have a platform across content and data to win it, but to frankly stitch together all that customer profile in real-time.
And when you have all that customer interaction that's happening as a result of mobile access to the website or website access or as customers are giving us access to the other channel data, that's just as unique differentiator that no other company has. So we start off from that being a huge advantage.
I think the effort that we've put into an ecosystem of partnerships there in terms of ingesting that data, the common taxonomy that we've agreed to the partnership with SAP and Microsoft on ODI, and, frankly, the credibility that we just continue to get associated with the fact that when you're processing these hundreds of trillions of transactions on an annual basis that we have more insight to be able to activate it, I think all of that gives us hope.
I think with the whole Experience Cloud, I will continue to reinforce that when we talk about it being north of a $70 billion addressable market, you should look at this as it's not a win/loss kind of situation, there's just so much opportunity. But starting with what we had with Audience Manager and DMP that we had with Demdex combined with what we are doing in CDP and making sure that that all operates in real-time, I think that is just a unique combination for Adobe.
Very helpful. Thank you.
And we'll take our next question from Saket Kalia with Barclays Capital. Please go ahead.
我们将接受来自巴克莱资本的Saket Kalia的下一个问题。 请继续。
Hey, thanks for taking my question here. Maybe for you, Shantanu, just to dig into one of the prior questions on Creative, Adobe Spark seems to be doing very well. So can you just talk a little bit about why you think that's doing so well? And maybe more specifically talk about what you've seen in the last couple of years that Spark has been available? What you've seen in terms of lifetime value and customer acquisition cost qualitatively?
嘿，谢谢你在这里提出我的问题。 也许对你来说，Shantanu，只是为了深入研究Creative之前的一个问题，Adobe Spark似乎做得很好。 所以你能谈谈为什么你认为这样做很好吗？ 也许更具体地谈谈你在过去几年中看到Spark已经可用的内容？ 您在生命周期价值和客户获取方面的成本有何定论？
Yes, Saket, I mean I think it stems from this fundamental assertion and hypothesis that we have – beliefs that we have that everyone has a story to tell. And when you have K-12 student all the way to the largest enterprises in the world wanting to use social media, wanting a quick template-based approach to start to be able to express themselves and then grow that expertise into using our products, it's just a fantastic on-ramp.
And so the millions of customers that we have, the penetration in the education segment is both an opportunity in itself, but frankly great brand building and awareness of what the Adobe Solutions can do across the spectrum. And so, I think it really – we've been talking about this for a while, but it's the golden age of creativity and design and it doesn't matter whether you're studying history or geography, I mean, the ability to express yourself visually and graphically and to do that across social channels is just such an intrinsic part of what it is and I think we've really struck a chord with the great, great product across both mobile.
I think the fact that we're exploring different platforms and previously we used to look at print and web as a platform, now we look at even channels like YouTube as a platform. It's just a great in addition to mobile, way to attract new customers. So I think that's why it really resonates with customers and while it'll continue to be both from an ARR perspective of growth as well as from overall brand and awareness, just a significant ability for us to continue to keep Digital Media ARR momentum going.
是的，Saket，我的意思是我认为它源于我们所拥有的这一基本断言和假设 - 相信我们每个人都有一个故事要讲述。当你有K-12学生一直到世界上最大的想要使用社交媒体的企业时，想要一个快速的基于模板的方法开始能够表达自己，然后将这些专业知识发展到使用我们的产品，它是只是一个梦幻般的入口。
因此，我们拥有的数百万客户，在教育领域的渗透本身就是一个机会，但坦诚地说，品牌建设和对Adobe解决方案在整个范围内可以做什么的认识。所以，我认为它确实 - 我们已经讨论了一段时间了，但这是创造力和设计的黄金时代，无论你是在研究历史还是地理，我的意思是表达的能力都无关紧要你可以通过视觉和图形方式在社交渠道中做到这一点，这就是它的内在组成部分，我认为我们真的与这两款手机中的优质产品达成了共鸣。
We'll take our next question from Sterling Auty with JPMorgan. Please go ahead.
我们将接受Sterling Auty与JPMorgan的下一个问题。 请继续。
Yes, thanks. Hi guys. Maybe I can bring John into the conversation here, kind of curious, as you look at the growth in Creative Cloud for the quarter? Is there a way to disaggregate how much of that growth has actually come from, the price changes that you've made over X number of quarters versus how much that growth is actually coming from pure volume?
对了谢谢。 嗨，大家好。 也许我可以带John进入这里的谈话，有点好奇，当你看看本季度Creative Cloud的增长情况时？ 有没有办法分解实际增长的实际来源，你在X数季度所做的价格变化与实际增长实际来自纯数量的变化有多大？
Yes, sure. It's really coming from both. And when you think about the North America price increase that we did last year in Q2 that as we said was going to be accretive and certainly through the year as we now anniversary that price increase.
And then earlier this year, in February, we did a price increase for a Dark Cloud and also in EMEA for Creative. So all these things are accretive, but one of the things that we've talked about for a long time now is, attracting new users to the platform is really our biggest growth opportunity and we're able to do that through the various new products that are attracting folks to our platform because some of these newer products are easier to use and then as they get comfortable with those, they end up – we're able to upsell them into full suite of products for multiple applications.
So we had this opportunity to really kind of tack load from many different ways. And we've been successful now in growing the number of users across the platform and also leveraging the mobile app on ramp.
然后在今年早些时候，2月份，我们为Dark Cloud和EMEA for Creative进行了价格上涨。所有这些都是增长的，但我们长期以来谈到的事情之一是，吸引新用户加入平台真的是我们最大的增长机会，我们能够通过各种新产品做到这一点这些新产品更易于使用，然后随着他们对这些产品感到满意，他们最终 - 我们能够将它们追加到多个应用程序的全套产品中。
But if you think of it in terms of material, it's primarily new user growth and new subscriptions, Sterling, is how you should think about it. I think the value that we're providing enables us to keep driving at the anniversary of people moving over to the new pricing, keep them as loyal customers and improve their engagement. But as it relates to the photography and video, it's primarily new user growth that's driving the Digital Media ARR.
但是如果从材料的角度考虑它，主要是新的用户增长和新的订阅，Sterling，你应该如何考虑它。 我认为我们所提供的价值使我们能够在人们转向新定价的周年纪念日继续推动，让他们成为忠诚的客户并提高他们的参与度。 但是，由于它与摄影和视频有关，它主要是新的用户增长，正在推动数字媒体ARR。
Sounds good. Thank you.
And we'll take our next question from Kash Rangan with Bank of America. Please go ahead.
我们将接受Kash Rangan与美国银行的下一个问题。 请继续。
Hi. Thank you very much. Congratulations. I'm curious given the strength in the quarter. You had a very nice quarter on net new ARR, and on the Experience Cloud side, you had very good bookings as well. But when I look at the guidance, you didn't change the guidance for the year. But Q3 numbers look a little bit right relative for the Street, it's just a function of conservatism given, maybe a questionable macro environment, or is it just that the seasonality of the business?
We've had the firsthand chance to model the seasonality of the business, including the acquisitions and that we may have been a little off relative to what is the new seasonality of Adobe? Just wondering what your thoughts are there? Thank you so much, and congrats.
你好。 非常感谢你。恭喜。 考虑到本季度的实力，我很好奇。 净新ARR上你有一个非常好的季度，而在体验云方面，你也有非常好的预订。 但是当我查看指导时，你没有改变今年的指导。 但是Q3的数字看起来与街道有点相对，它只是保守主义的一个功能，可能是一个可疑的宏观环境，还是仅仅是业务的季节性？
我们有第一手机会模拟业务的季节性，包括收购，我们可能与Adobe的新季节性相比有点偏差？ 只是想知道你的想法是什么？ 非常感谢你，恭喜。
Yes, I think, Kash, thanks first. I mean, big picture, it's clear. We're having another record year and great execution against both growth opportunities across all of the three marketing clouds, Creative, Document and Experience. And as you point out, the results, revenue growth of 25%, the significant cash flow as well as the strong EPS, while we're increasing margins.
I think on Digital Media, I gave some color as it related to what will certainly be a record Digital Media ARR year and I think we factor in seasonality, and so that's I think part of how you should be thinking about Q3 versus Q4.
And in DX as well, I mean the subscription revenue growth, if you look at that, when you see the revenue growth of 34%, the subscription revenue growth certainly has exceeded that and it's closer to 39%. And so I think that also reflects the success that we continue to have and the fact that we have the leading SaaS enterprise platform for enterprises to engage digitally with their customers.
And so, I think big picture, the two opportunities continue to be significant tailwinds. We're executing well against it. I think we'll give you more color as it relates to Q4 in September as well as 2020 at MAX. But continue to be really optimistic. And I think where we are in the quarter, just updating annual numbers for a year is akin to giving Q3 and Q4 targets and that's why, as you know, typically we don't do that. But that should not change the fact that we have momentum in the business and optimism for the future.
Congrats, Shantanu and team. Thank you.
We'll take our next question from Mark Moerdler with Bernstein Research. Please go ahead.
我们将接受Mark Moerdler与Bernstein Research的下一个问题。 请继续。
Thank you so much. I really appreciate, and congrats also on the quarter. So you've guided to 34% digital marketing growth for the back half of the year. What's the more difficult set of compares as you lap Magento's acquisition and lap a bit of the Marketo? Can you give us a bit more color on what's driving that strength? I appreciate.
非常感谢。 我非常感谢，并祝贺本季度。 所以你在今年下半年引导了34％的数字营销增长。 当你完成Magento的收购和一些Marketo的比较时，比较困难的比较是什么？ 你能不能给我们更多的颜色来驱动这种力量？ 我很感激。
Yes. I think as it relates to the Digital Experience business, we've always outlined, Mark, that the focus has been on driving subscription bookings. I think as the deferred revenue also starts to taper off, that's certainly going to factor into what happens. But it's just a large addressable opportunity. We have the market leading products and we continue to be excited about how we execute against that. So that's how I would think about that particular business.
是。 我认为，由于它与数字体验业务有关，我们总是概述Mark，重点是推动订阅预订。 我认为随着递延收入也开始减少，这肯定会影响到发生的事情。 但这只是一个很大的可寻址机会。 我们拥有市场领先的产品，我们仍然对我们如何执行这些产品感到兴奋。 这就是我对这个特定业务的看法。
Appreciate it. Thank you.
And we'll take our next question from Jay Vleeschhouwer with Griffin Securities. Please go ahead.
我们将接受Jay Vleeschhouwer与格里芬证券的下一个问题。 请继续。
Yes. Thank you, good evening. Shantanu, a technology strategy question, I was hoping we could parse through with plethora of three-letter acronyms that Adobe has been sharing with us at Summit and on other occasions. We now have CDP, CXM, CXP, XPM and so forth.
The question is, ultimately does Adobe have a single underlying data model that is the Adobe Data Model, or could you foresee two or more principal data models, particularly in DX? I ask in part because at Summit in EMEA last month, there was some mention in one of the sessions about you are having a new purpose built B2B data model, and so maybe you could put this in the context of the complexity of the architecture or the technology as it might relate to any implications for R&D and sales efficiency?
是。 谢谢，晚上好。 Shantanu，一个技术战略问题，我希望我们可以解决Adobe在Summit和其他场合与我们分享的过多的三字母缩略词。 我们现在有CDP，CXM，CXP，XPM等。
问题是，Adobe最终是否有单一的基础数据模型，即Adobe数据模型，还是可以预见两种或更多主要数据模型，特别是在DX中？ 我问的部分是因为上个月在欧洲，中东和非洲地区首脑会议上，有一次会议提到你有一个新的专用B2B数据模型，所以也许你可以把它放在架构的复杂性或 技术可能与研发和销售效率的影响有关吗？
Yes. You forgot ODI and maybe a couple of other TLAs, Jay, but it's a good question. And I think as it relates to how we think about the technology underpinnings, we think about it from two strategic points of view. The first is, are we able in our own products to have a common way in which people can really provide integration for our existing applications better than any other individual point product vendor can provide?
And I think our track record, as you know better than most in terms of what we have done on the Digital Media side of having colors and types and font faces work well, that is the reason why the underlying data model allows us to have things like campaigns or segments or audiences work better across our applications than anybody else. And so, we did that heavy lifting associated with having a common way to define the taxonomy, the customer journey across our products.
We clearly saw that that was not going to be adequate in terms of the aspirations we had to actually being the underlying sort of infrastructure for how all companies deal with digital transformation and the reasons for the partnership with both Microsoft as well as with SAP is to actually through ODI and make that true not just for customer behavioral data where we clearly have access to all of that data, but also to extend that to financial data, to transactional data over time to IoT data.
And so, the way I would think about it is, it's a common taxonomy, it's a common way for people to extend it, but we don't have to do the heavy lifting of defining everything. The beauty of the model is that actually we defined the framework, we defined the API, we defined the services and other people can actually extend and augment that, and so it enables the entire ecosystem to partner. So it's exciting.
We delivered that through the Adobe Experience Platform. I talked in the prepared remarks about how we have early beta customers who are starting to see it. Certainly, Adobe is using it in our own offering. But I think it's really going to be the underlying infrastructure for our next generation enterprise who wants to engage with their customers. So we're excited about that.
我们通过Adobe Experience Platform提供了这些功能。我在准备好的评论中谈到了我们如何让早期的测试用户开始看到它。当然，Adobe正在我们自己的产品中使用它。但我认为它真的将成为我们想要与客户互动的下一代企业的基础架构。所以我们对此感到很兴奋。
And we'll take our next question from Kirk Materne with Evercore ISI. Please go ahead.
我们将接受来自Kirk Materne和Evercore ISI的下一个问题。 请继续。
Thanks very much. Shantanu, I want to ask a little bit about Sensei in the context of, is that coming up at all and it's under conversations on the Experience Cloud side. I know there's a lot of factors that go into those decisions from a product portfolio perspective. I was just kind of curious, if Sensei is adding to the conversation if you view that as sort of a needle mover for you all at this point? Thanks.
非常感谢。 Shantanu，我想问一下Sensei在上下文中的问题，是否会出现，并且正在体验云端的谈话中。 我知道从产品组合的角度来看，有很多因素会影响这些决策。 我只是有点好奇，如果Sensei正在加入谈话，如果你认为这对你们所有人来说都是针对你们的那种针？ 谢谢。
I'm really glad you asked that question, because we talk a lot about the Adobe magic that we've had in the Digital Media products and we certainly touched on what we've done with Content-Aware Fill, which is magic as it relates to being able to do that across frames and reduce a whole bunch of complexity for the video products.
We are investing very heavily in the same technology Sensei in the Experience Cloud. Let me maybe give you a couple of examples to make it more tangible. I mean, the first is when you're doing search, the way you do search when you're doing it in Digital Media trying to find an object in Stock where we have the best technology is still substantially different from the way you would do search, in Commerce where you're looking for an object maybe based on a color or based on a type of preference.
So I think in Commerce, that's one area where Sensei and the ability to do search and find the right shopping good that you're interested in. That's a game changer in targeting and in what we can do around how we can optimize targets and recommendations, that's another area where AI is certainly beneficial. When you're talking about a subscription model and customer preference and a prediction score of who's likely to churn and what are the best way to engage with them across channels, that's another area where we have AI technology.
But in addition to that, as part of the experience platform, we actually now have modules. I talked a little bit about attribution.AI and things like that, which are AI modules and frameworks for people to actually augment the Experience Cloud. So I think, unlike other companies, we believe that the AI is best built in into each of the existing solutions and through frameworks, but our track record of delivering against that has been strong and it's only getting better.
Perfect. Thanks very much.
And we'll take our next question from Tom Roderick with Stifel. Please go ahead.
我们将从Tom Roderick和Stifel接下来的问题。 请继续。
Hi. Good afternoon. Thanks for taking my question. John, let me throw this one at you, just looking at the Digital Experience segment itself, we saw a nice bounce back in the segment gross margins and part of that, of course came into scale and some of the deferred revenue write-downs rolling off.
But the other part, of course, is realizing some of the integrations between the components. And I was hoping you could speak to what you're seeing with some of the leverage between the properties of Magento and Marketo, and the core of Digital Experience, in particular on the COGS side, are there elements of architectural leverage that are starting to show up and then even below that line are you seeing much sales leverage between the acquired properties? Thank you.
你好。 下午好。 谢谢你提出我的问题。 约翰，让我把这个扔给你，只看数字体验部门本身，我们看到了细分市场毛利率的一个很好的反弹，其中一部分当然是规模化和一些递延收入减记滚动关闭。
但是，另一方面当然是实现了组件之间的一些集成。 而且我希望你可以通过Magento和Marketo的属性之间的某些杠杆作用谈论你所看到的东西，而数字体验的核心，特别是在COGS方面，是否有建筑杠杆的元素开始 出现，然后甚至低于那条线，您是否在获得的房产之间看到了很多销售杠杆？ 谢谢。
Yes. No, absolutely. For sure, we're seeing the ability in both properties that we acquired for us to be able to unify development across the platform and that in of itself provides us some efficiencies. In addition, from the go-to-market perspective, as we've talked about, we've unified and aligned our go-to-market strategy with the existing Adobe Enterprise sales organization under Matt and so that's been able to bring a lot more efficiency as we cross-sell not only the existing Digital Experience products, but also Magento and Marketo.
Not to mention then our partner ecosystem where we are selling alongside Microsoft, for example, and being successful in having multi-solution sales with them as well. So it's been something that through scale and through continued focus on the integration that we're able to get some leverage out of that.
是。 不，绝对。 当然，我们看到我们获得的两种属性的能力能够统一整个平台的开发，而这本身就为我们提供了一些效率。 此外，从上市的角度来看，正如我们所讨论的那样，我们已经将我们的市场战略统一并与Matt现有的Adobe Enterprise销售组织保持一致，因此能够带来很多 我们不仅交叉销售现有的数字体验产品，还有Magento和Marketo，因此效率更高。
Excellent. Thank you.
The one thing, maybe, I'd like to add to that, I know there was some question around seasonality and while this question was specifically around operating margins, I think cash Adobe, so maybe we'd give you color on how we think about our investment as well as what's happening as it relates to margins.
I think it's clear that despite the revenue growth and investment that the operating margin of the company has improved throughout the year and I think we remain very focused on profitability. If you look at seasonally how that should play out over the second half of the year, our guide for Q3 shows EPS increasing by approximately, I think $0.12 despite seasonality. And we certainly expect Q4 to be a strong seasonally finish to the year.
And I think to give you some color on that while we are not updating our annual targets, we would expect that sequential EPS growth from Q3 to Q4 to be about 3x the growth from Q2 to Q3. So hopefully, that gives you some color on how we think about the investments. We certainly continue to believe in investing for the revenue growth that we're seeing and it also clearly gets us back to north of 40% margin. So hopefully, that gives you some color on seasonality as well as while the question was on gross margins how we think about operating margins and expenses.
Really helpful, Shantanu. Thank you.
Operator, I think we'll take one more question, please.
Thank you. We'll take our final question from Walter Pritchard with Citi. Please go ahead.
谢谢。 我们将从花旗的Walter Pritchard那里得到最后一个问题。 请继续。
Hi. Thanks. Question on the Digital Experience side, you've been talked in the past about a 25% growth in the book of business, including the two acquisitions. I'm wondering, sort of how things are tracking so far this year and what you've learned in terms of first half growth as that trend progresses into the second half?
你好。 谢谢。 关于数字体验方面的问题，过去你曾经谈过商业书籍增长25％，包括两次收购。 我想知道，今年到目前为止的事情是如何追踪的，以及你在上半年增长的过程中学到了什么，随着这一趋势进展到下半年？
Yes. As you know, Walter, we don't update how we're doing against the bookings during the year as we think about the underlying dynamics of the industry and the need for Digital Experience solution. Nothing diminishes the belief that we have that that continues to be a large growth opportunity.
I think as you could see from the subscription revenue growth that we see, we continue to focus on executing against that. And so we'll certainly provide more color as we've said on that on an annual basis. But I just big picture the – available opportunity, I think continues to be large.
And given Mike said that that was the last question, maybe just as a quick summary again, it's clear that we have the right strategy and the focus on delivering great customer value. We're pleased with the first half financial results, so we expect that momentum to continue in the second half. The strategy of empowering people to create and helping businesses transform. We believe that continues to be a north of 100 billion addressable market opportunity.
And we're really pleased with the attendance that we saw at the customer events in the DX, and whether it was the Summits in the U.S. and Europe, whether it was Marketo Marketing Nation, whether it was a Magento Imagine. I think that just reflects both the leadership that we have in product strategy and vision as well as the strength of the customer and partner community. And FY2019 is shaping up again and we expect it to be another record year for revenue and I think the innovation roadmap and opportunity positions us really well for future growth.
We appreciate all of you joining us today. Thank you.
我认为，正如您从我们看到的订阅收入增长中看到的那样，我们将继续专注于针对此进行执行。所以我们肯定会提供更多颜色，正如我们每年所说的那样。但我只是大局观 - 可用的机会，我认为仍然很大。
我们对在DX的客户活动中看到的参加者感到非常满意，无论是在美国和欧洲举办的峰会，是否是Marketo Marketing Nation，是否是Magento Imagine。我认为这只反映了我们在产品战略和愿景方面的领导地位以及客户和合作伙伴社区的实力。而且，2014财年再次形成，我们预计这将是收入的又一个创纪录的一年，我认为创新路线图和机会非常适合未来的增长。
And this concludes our call. Thanks everybody for joining us.
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