Adobe Inc (ADBE) — Q4 2020 Earnings Call Transcript

Good morning and thank you for joining us. Welcome to the Adobe Q4 Earnings and 2020 Financial Analyst Meeting. I'm Jonathan Vaas, VP of Investor Relations for Adobe. You should have a copy of the press release we filed this morning as well as our investor relations datasheet. We've got a great program planned for you today, which is in many ways similar to what we've done in the past, and in a few ways different. This year marks my 10th analyst meeting at Adobe. The first was the year we had just launched Creative Cloud. And it's amazing to reflect on how that business has grown since then. For my first nine analyst meetings, I was one of the many employees helping behind the scenes. And this year, I have the privilege of introducing the executive speakers as the head of Adobe's Investor Relations program, a role I assumed earlier this year, just after we had made the shift to working remotely. I've really enjoyed all of the conversations with investors and analysts about Adobe's business this year, and I look forward to meeting many of you in person at some point. That leads to the other way today's program is a little bit different than what we've done in the past. This is our first virtual analyst meeting. I, for one, will really miss the opportunity to meet many of you and chat after the event, but we've also been learning this year about the power of communicating digitally and seeing that we are able to meet to reach a broader audience with a webcast than we might with an in-person event. Due to the format, we've streamlined the planned presentation today. But a long-form slide deck has been posted to Adobe's IR site that has all of the detailed information you're used to seeing. Let's take a look at the agenda. Shantanu will kick things off today by talking a bit about the quarter and fiscal year we just completed and then moving over to Adobe's vision and strategy for the future. Abhay will then talk about the company's vision from a technology lens. Scott will highlight our Creative Cloud strategy. Anil will go over our Experience Cloud strategy, and Gloria will talk about our strategy related to our people, as well as other Adobe stakeholders. Finally, John will provide a detailed financial summary and share Adobe's growth strategy. And then we'll go to live Q&A. Before we get started, as a reminder, some of the information we'll be providing today includes forward-looking statements that are subject to risk and uncertainty. Actual results may differ from these statements, and we encourage you to review the risk factors in our SEC filings for more information. Additionally, we'll be providing both GAAP and non-GAAP financial information. Reconciliations between the two can be found on Adobe's Investor Relations website. I will now pass it over to Adobe's President and CEO, Shantanu Narayen.

Thank you, Jonathan. I'd also like to add my welcome. Thank you for joining our annual financial analyst meeting. Today's format is a little different than what we are used to. But to make the most of this year's medium, we'll use the time today to cover strategy, business momentum, as well as our financial performance. We posted the complete deck similar to what we've done in prior years. But rather than speak to every slide, we'll have the management team share their highlights in their areas. And we’ve always saved some time for Q&A at the end of our presentations. First and most importantly, I hope you're all staying safe and healthy. It's really tragic to see the recent spate of casualties, but the progress in vaccines gives us all hope that the worst will soon be behind us. And clearly, none of us could have predicted how everything would change overnight, and the world as we know it would change so dramatically. Digital has even more become the primary way for people to connect, work, learn, and be entertained. This new reality has only increased the importance and relevance of our solutions and accelerated the tailwinds that benefit our business. This combined with our business fundamentals, unparalleled innovation, and world-class execution continues to drive our growth. 2020 was another momentous year for Adobe. And like all companies, our primary focus has been to protect the health and safety of our employees and continue to serve our customers. We took swift and decisive action to direct our employees to work from home, suspend travel and cancel in-person events. And we focused on helping our customers make their own transition to digital overnight. For example, we provisioned 30 million students with Creative Cloud, so that they could create from home. We implemented the government rapid response program to assist local governments. With our Honor Heroes campaign, we galvanized our community to create artwork honoring the true heroes – essential workers. And we set the bar high for digital events with Adobe Summit, as well as Adobe Max. In fact, Adobe Max garnered 21 million views. We continue to harness the trillions of transactions powered by the Adobe Experience cloud to provide a unique real-time perspective on the economy with the Adobe Digital Economy Index. And we pioneered new areas such as the Content Authenticity Initiative, which provides attribution functionality that creators can attach to their work to create more transparency around how content has been posted and edited. Our leadership extends to not only what we do, but how we do it. And we're proud of the continued industry recognition that we receive. We continue to be a top riser on the Interbrand Global Best Brands of the Year for the fifth year in a row. We're consistently named one of the best places to work by both Fortune and Glassdoor. And in an area that's becoming increasingly important to US investors, we're a leader whether it's in the Dow Jones Sustainability Index or the Bloomberg Equality Index. But it's a product company at our core. It is our innovation engine that I'm most proud of as we continue to fire on all cylinders. With Creative Cloud, we continue to remain the clear leader in a category that's exploding. We delivered significant product innovation that extended our applications to multiple surfaces. We added greater collaboration capabilities to all of our leading applications. And we continue to break ground in new categories while improving engagement as well as customer satisfaction. The Document Cloud continues to have huge demand in this digital environment, with PDF and Adobe Sign all being mission-critical across many businesses. We delivered more capabilities across desktop, web, mobile, and through our frictionless PDF services. And with Experience Cloud, we continue to build out the world's most comprehensive customer experience management portfolio. And the new capabilities in the Adobe Experience platform have now been expanded to include real-time customer profiles. We delivered new services, intelligence services to further the use of artificial intelligence and machine learning in organizations. We delivered new solutions like Customer Journey Analytics, which unifies cross-channel data. And I'm excited that we recently closed the acquisition of Workfront, which is a leading work management solution for marketers. On the financial side, after crossing the $10 billion mark in 2019, we haven't missed a beat. And as you can see from our targets, we expect to exceed the $15 billion mark in 2021. And we're incredibly pleased to drive both top and bottom-line growth while generating cash and continuing to return to shareholders. In fact, in 2020, we achieved $12.87 billion in revenue, which represents 15% year-over-year growth. In Q4, we surpassed $10 billion in digital media ARR, which is a significant milestone for us as a company. With the strong financial discipline that you've all been accustomed to, we continue to generate impressive cash flows from operations and generated over $5 billion in fiscal 2020. And we continue to focus on earnings per share with the earnings per share on a non-GAAP basis of $10.10, which represents 28% year-over-year growth. I truly believe that these financial accomplishments set us apart from all other software companies, and the best is yet to come. Adobe's mission is to change the world through digital experiences. And it has never been more relevant as people seek new ways to communicate, learn, and conduct businesses virtually. The benefits of our innovation help billions across the globe. And the impact is experienced across every aspect of society. It motivates our employees to focus on having more impact and to invent the future. When you think about the macro trends that we all experience, every industry is experiencing a tectonic shift towards all things digital. And I believe that the events of this year have only accelerated. The genie is not going to go back into the bottle. And even regulated industries that have traditionally been slower to embrace digital have certainly picked up the pace this year. We have industries like healthcare that are transforming, whether it's through personalized medicine, telehealth, and new ways, frankly, to engage patients. On the creative side, it continues to be the golden age of design and creativity, and design continues to be a key competitive advantage because everyone at their heart is a creator. They want to express themselves across new devices with new modalities. And creativity is so essential to how we connect, how we cope, and how we learn. Education has also been reimagined because digital is central to how students learn today, whether it's through remote education, as well as by unlocking new forms of creative storytelling. And digital is also breaking longstanding barriers to access to education, which is something great because it's making it more accessible. The way we work will never be the same again. And it's great to see how the PC has experienced a tremendous revival as the computing workhorse. Documents are at the center of how work gets done. Paper to digital transformation is only accelerating, and every business process is going digital because every business is now a digital business. Digital has become the primary way for all businesses to engage with their customers. And it's true that customer expectations are also at an all-time high because e-commerce is exploding. In fact, an annual holiday report that's powered by Adobe Analytics predicts that online holiday spending will reach $189 billion, which represents 33% year-over-year growth. And underpinning all of this is a massive shift towards artificial intelligence and machine learning, which will only further these forces at play. At Adobe, our strategy is at the nexus of this digital revolution. And through technology, we believe we're transforming work, learning, and play. We're relentlessly focused on looking around the corner. How do we drive towards the next big market opportunity to solve customer pain points and anticipate their needs? We've pioneered and we're leading three massive growing categories – creativity, digital documents, and customer experience management. And we're relentless about expanding the customer segments we serve, adding more addressable market opportunity because we want to empower everyone, from the student to the small business owner to the largest enterprise in the world. And I believe we win by creating path-breaking technology platforms that will lead the industry for decades and today work across the entire computing paradigm from the largest clouds to the smallest devices and are built with a service-oriented architecture that also enables us to have new monetization models. In fact, our three industry-leading cloud offerings are more mission-critical than ever before across every geography and audience. With Creative Cloud, we're unleashing creativity for all, giving anyone anywhere the tools to express their creativity. With Document Cloud, we're accelerating document productivity, modernizing how people view, share and engage with digital documents. And with Experience Cloud, we're powering digital businesses of all sizes, giving them everything that they need to design and deliver great customer experiences. And underpinning our three clouds is the magic and power of Adobe Sensei, a significant differentiator for Adobe and an enabler to more rapid innovation. As it relates to the creative business, everywhere we look, whether it's entertainment, education, or the enterprise, content is fueling the digital economy. And that's driving an explosion of creators, tools, and assets that all represent tailwinds for our business. The reality is that creativity is for everyone, from the students submitting their next school assignment to the creative professional making an ad. Everybody has a story to tell. And when you look at the categories, whether it's web content or mobile application creation, imaging, video, animation, screen design, augmented reality, 3D, they’re all surging in this era of digital storytelling. Creativity is essential because more than ever before, this year has shown us the power of creativity in enabling people to express themselves, connect, and cope. We believe that creativity is one of the fundamental skills in the 21st century. And as machines get faster and smarter, skills that are uniquely human like creativity will become increasingly more essential. Creativity is also now multiplayer. Because whatever your skill level, today's creative process is becoming more iterative and collaborative. And all creative professionals must manage these multiple work streams across increasingly remote and dispersed teams, requiring seamless, cloud-based-enabled collaboration and workflows that drive this productivity. Social communities like Behance that we have and live tutorials are also providing new ways to learn and to be inspired. For us, Adobe Creative Cloud's vision is to be the one-stop shop from inspiration to monetization. You'll hear from Scott later, but let me expand a little bit on our strategy. First, we want to advance every creative category. And we're a category leader in core creative categories, including photography, design, video, illustration, and layout. And we're expanding our leadership in new and emerging categories, including screen design and immersive media like 3D, VR, and AR. And what this strategy has enabled us to do is to acquire new creators through single-lab offerings and then demonstrate the benefits of the entire Creative Cloud offering over time. We're focused on building multi-surface systems, building solutions for every surface and system because we want to enable anybody to create wherever and whenever inspiration strikes. We truly believe that these devices are no longer just consumption devices anymore; every device should also be a creation device. We're focused on adding collaboration services because we can ensure that content can be seamlessly managed in the cloud and accessed from any device. And what this enables us to do on the business side is to increase engagement, but also to acquire new stakeholders and expand our customer base with these new monetization opportunities. We want to engage and inspire the community. And our vibrant communities, which are a critical driver of both acquisition and engagement, are succeeding. In fact, we've grown to over 25 million members on Behance, which represents a huge opportunity for further upsell into the broader Creative Cloud ecosystem. And programs like Adobe Live enable us to provide forums for creators and to promote active use and learning. We've always maintained that retention is the new growth, and that is more relevant than ever before as we've crossed $10 billion in digital media annualized recurring revenue from our current subscribers. At the end of the day, we’re focused on democratizing creativity, enabling anyone from a student to a social media influencer, from a professional photographer, filmmaker, and designer to express their creativity. And we delivered on new applications like Photoshop and Illustrator on tablets, consumer apps like Photoshop Camera and easy-to-use storytelling apps like Premiere Rush and Spark, which are all attracting new users and expanding our base. But in addition to this tremendous product innovation, we have a data-driven operating model that is enabling our ability to capture this expansive opportunity because we have a tremendously sophisticated understanding of our customer and we're able to serve up personalized experiences and offers at every part of this digital funnel and journey. And what this enables us to do is unlock engagement, as well as provide us with new upsell opportunities. And when you put this all together, mapping the products and services that we're targeting across these expansive segments and adjusting for factors like non-genuine usage, the Creative Cloud total addressable market is projected to be approximately $41 billion in 2023. $20 billion of that addressable market is coming from creative professionals, which includes Creative Cloud apps, and new services like Adobe Stock. $21 billion of the addressable market opportunity is coming from the broader communicator and consumer segments, which includes products like Spark and Premiere Rush, as well as the non-pro users of Creative Cloud, as well as Stock. And our aspiration to unleash creativity will continue to be this north star that we will execute against for many years to come. Among the key growth drivers that I'd like to highlight for this business include the ability to acquire new customers through category single applications for screen design, video, and 3D, using mobile increasingly as a funnel through the creation of mobile IDs through mobile monetization services, as well as upselling to the multi-surface systems and new services such as Adobe Stock, as well as continued global acquisition and expansion. Turning to our second growth opportunity, it's clear and obvious that digital documents are now mission-critical in powering the modern business. And we have seen this massive acceleration as businesses all shifted to remote work overnight. The truth is that artificial intelligence and machine learning, the cloud, and mobile are all redefining the notion of productivity. It's reshaping how we work. It's enabling greater flexibility. And it's requiring more collaboration across globale dispersed teams. And artificial intelligence is only amplifying this productivity. We're seeing a massive adoption of paper-to-digital processes and workflows. And the paper-based tasks of the past are all now being moved digital. And the other aspect that's happening, the cloud ecosystems are driving a new business opportunity, what we call the API economy, which is revolutionizing how apps and services are both being built, as well as being monetized. What drives this is the fact that PDF continues to be the lingua franca for how things happen on the Internet. We have over 2 billion mobile and desktop devices that have had Reader or Acrobat installed. In fact, we have 300 billion PDFs that are opened in Document Cloud applications over the last 12 months. And so, strategically as we think about the opportunity, the first is to expand what we call our Sensei-powered Acrobat verbs and it's to enable all document actions, editing, sharing, scanning, and signing. It's to unlock the value that exists in trillions of PDFs that have been created by deciphering these unstructured PDFs and making them truly responsive on mobile devices. In fact, one of the innovations we're particularly proud of is called liquid mode in the Acrobat Reader, which both deciphers and automatically reformats text, images, and tables for quick navigation and consumption, and is powered by Adobe Sensei. We think mobile fuels this new business opportunity because PDF usage has absolutely exploded across mobile devices. Making this Acrobat experience more frictionless across mobile and web is truly leveraging the ubiquitous PDF format that we have. And we're expanding both the free and paid mobile customer base. We're also increasingly capturing the PDF demand with Acrobat Web because what we are doing is converting the massive demand for PDF web, such as creating and editing through search through our frictionless services. With every business going digital, the third aspect of the strategy is to enable the paper-to-digital transformation through services that we have like Acrobat and Adobe Sign, but also to leverage what we deliver through the Adobe Experience platform and the Adobe Experience Manager, as well as Adobe Experience Manager Forms. And we want to unleash an entirely new PDF ecosystem with document services, which provides APIs to third-party developers, and they will then find new and exciting ways to use PDF and we will be able to monetize those services. So, let me expand on just a few of these opportunities. There are about 50 million searches for PDF actions every month. And what we want to enable is, through a single click, best-in-class web experience, deliver quick access to actions that the customer wants, and allow them to deliver and discover a more comprehensive set of Acrobat offerings. This is similar to what we've done with the successful Reader upsell motion, which is to drive engagement around PDF, to enable people to complete their tasks, and then upsell people from the free product to Acrobat subscriptions. The other aspect of our Document Cloud strategy is to deliver a unified Document Cloud platform. This includes Acrobat, AEM Forms, and Adobe Sign, which are central to the way work is getting done today. And we have a tremendous go-to-market advantage because it's the sophistication of our data-driven operating model that gives us a really incredible understanding of our customers, how to reach them, how to serve them effectively, and we have the ability to truly optimize everything on the funnel from acquisition all the way through retention. We're continuing to expand the Sign scale and reach into fast-growing new verticals, with significant go-to-market partnerships, including with Microsoft, Workday, ServiceNow, and Notarize. And we will continue to invest in the brand equity associated with PDF as the lingua franca of the Internet. We're incredibly excited about the second growth pillar, the Document Cloud strategy and the broader addressable market that it represents. And we expect the addressable market to grow to $21 billion in 2023. We're benefiting from the move to subscriptions, we're benefiting from visitor acquisition, we're benefiting from mobile, and the PDF mobile opportunity itself represents approximately $11 billion of this addressable market. And on the document services platform, we're driving growth with electronic signatures and new embedded services, which we believe represents $10 billion in addressable opportunity. Our third growth initiative is all about customer experience management. And we continue to believe that it represents a massive opportunity with the acceleration that we all see in digital transformation. Because the reality is that today every business is a digital business. And the imperative for digital customer engagement has never been greater. Because every business has to understand their customers and deliver personalized experiences. Because all of us, as consumers, we buy experiences, not just products. The reality today is that customers are expecting this engaged personalized digital experience, and we want these interactions to feel easy and efficient. They need to be well designed, they need to be context-aware, and they need to be seamless across channels, secure, and delivered at the exact microsecond at which we expect it. And delivering a next-generation platform to deliver and drive this experience is easier said than done because it requires businesses to completely merge content, data, and artificial intelligence to deliver this compelling, relevant personalized experience in real time. And the truth is that companies must design for this brilliance, but wire for intelligence. Adobe created the digital marketing category. And we're now the leader in a much broader opportunity – the customer experience management category. Our strategy is to deliver a comprehensive set of applications and services grouped in solution areas such as content and commerce, customer journey management, customer data and insights. And now with the closing of our Workfront acquisition, work management. And Anil Chakravarthy will spend a little bit more time talking about our strategy. The second aspect is to deliver this next-generation technology platform, Adobe Experience platform, which provides the underlying infrastructure to make CXM a reality and is years ahead of anything that any competitor has provided. Because it truly brings together hundreds of data points to create this unified customer profile that companies can activate to deliver the personalized experience at scale. Our vision is also to deliver an industry-leading marketing system of record. With the Workfront acquisition now being closed, we have the leading growth management product for marketers. And while, unlike most companies, most of our growth is organic, we do use inorganic opportunities strategically, and we have an incredibly successful track record of acquiring, growing, and scaling these companies. We have a longstanding set of partners and an ecosystem with Workfront with over 1,000 joint customers. And Workfront is already equipped with APIs for not just Experience Cloud, but also Creative Cloud, which represents opportunities to further leverage and deliver synergies across our businesses. One of the key assets that we have is the ability to deliver a scaled go-to-market, cutting across the entire C-suite, given the affinity that both customer CIOs and CMOs have for Adobe. Because all businesses are now working to rearchitect their systems around the customer, which requires this strong partnership between the chief marketing officer and the chief information officer. And this enables us to scale our go-to-market across the entire C-suite, which is driving higher value contracts as well as services. And we continue to have an explosive partner ecosystem that believes in our vision and is delivering unique expertise to our joint customers. Our total addressable market, when we think about it for the Adobe Experience Cloud, is estimated to be approximately $85 billion in 2023. And that's comprised of customer data and insights, which continues to be a huge opportunity because intelligence is increasingly the lifeblood of every organization. So, this represents an approximately $26 billion addressable opportunity. The explosion of content and commerce where we're the absolute leader is driving a $44 billion opportunity. And customer journey management, which includes products like campaign and email marketing, as well as B2B marketing and demand generation, which includes account-based marketing and lead management, is expected to be a $15 billion opportunity. As we've said before, these are large and growing categories, which are top of mind for every business. To summarize, we believe that we have the right strategy that's being applied to an exceptional opportunity that is approximately $147 billion in 2023. We have a proven capability to both create and continuously lead these categories. We're thinking bigger about our businesses and the customers that we serve, from consumers and students to communicators and the creative professionals and the entire C-suite. We have leading products, services, and platforms to unleash creativity, accelerate document productivity, and to power digital businesses. Our secret sauce is the over 20,000 talented employees that we have that are all rallied around our mission and the impact that they can have. We have a revered brand all across the globe. We have world-class financial discipline that's driving both top and bottom-line growth with an impressive margin. This is truly an expansive opportunity. And we're well-positioned to capture it. I certainly believe that Adobe's best days are ahead of us. We expect to cross $15 billion in revenue next year. We have a huge addressable market, industry-leading applications, services, and platform, and an unparalleled innovation engine.

Thanks, Shantanu. Good morning, everyone. It's great to talk to all of you again. Shantanu talked about the broader opportunity and strategic imperatives for Adobe. I would like to take the next few minutes to talk about our technology vision and share my excitement for the road ahead. Being a product company at our core, we have always taken a long-term view of building deep technology platforms that are highly defensible and drive industry breakthroughs. With everything going on this year, I’m especially proud of the sheer breadth and depth of innovations our teams have delivered. Illustrator on iPad and Neural Filters in Photoshop, liquid mode and Acrobat Web in Document Cloud, and AEM cloud and real-time CDP and Experience Cloud are just a few examples of innovations we have delivered. And this incredible pace of innovation is only exceeded by the massive scale at which we operate today. With trillions of activations served from Experience Cloud to hundreds of millions of mobile app downloads and more than 2 billion devices running Reader and Acrobat software today, we truly have unmatched scale from cloud to the edge. Now, a key aspect of our technology strategy is to develop a consistent architectural viewpoint across all of our products. We think of this unified architecture at three levels. Multi-service experiences for our apps, a rich portfolio of services and APIs, and our Sensei AI stack built on shared content and data platforms. Everything we do across our three clouds is guided by this unified technology vision and gives us a significant strategic advantage. Increasingly, we are thinking beyond discrete app silos to delivering new modalities and fluid multi-surface experiences across desktop, mobile, and web. For example, in Creative Cloud, we are adding modern web and collaboration technologies to core imaging and video workflows in applications like Photoshop and Premiere, evolving them into complete creative systems. Similarly, in Document Cloud, we are taking the best-in-class PDF runtimes on PCs and bringing them to both web and mobile platforms for a consistent multi-surface PDF experience. And in Experience Cloud, we are uniquely focused on a new kind of customer experience, one that's real-time and hyper-personalized across every single touchpoint. At the services tier, we are not only building an increasingly rich portfolio of services, but we are focused on three cross-cutting themes. First, we are embedding collaboration deeply at the core of all our applications, converting our best-in-class single-user apps like Photoshop or Acrobat to multi-user collaborative solutions. And because we uniquely understand our file types and workflows, we can enable a much richer contextual collaboration for users, as opposed to a generic file sharing or communication platform. Second, using the shared content and data platforms, we are enabling unique cross-cloud use cases, going from creators to knowledge workers to marketers. This is something that only Adobe can deliver. Lastly, we are increasingly focused on the API economy opportunity by exposing our services via open APIs to developers and ISVs in the ecosystem. You will see us aggressively focus on this new vector. Last, but not the least, I've talked to all of you about Adobe Sensei, our generational bet on AI. Sensei is already having a profound impact with our teams delivering hundreds of Sensei-powered features across our three clouds. We started Sensei with AI features delivered within existing apps. But by leveraging our unique understanding of our users' workflows and usage patterns, we have built a specialized Sensei platform, one that's focused on creativity, documents, and customer experience domains. With this platform in place, we are now positioned to push the limits with completely new kinds of AI-first apps. Liquid Mode in Document Cloud is one great example of this. This was a multi-year journey and required us to solve some unique and hard problems. Using the latest techniques in AI, machine learning, and computer vision, we trained Sensei to deeply understand the trillions of PDFs that exist in the world. And then using that intelligence, we are able to generate structure out of unstructured PDFs that are across the world. Initially, we are using this to create a delightful experience on mobile devices, but the possibilities ahead are truly exciting, with document intelligence breakthroughs in areas like semantic understanding and document summarization. And like Liquid Mode in Doc Cloud, we are also working on unique Sensei services for creative intelligence and experience intelligence. Sensei is a key R&D priority with long-term strategic advantage, one that's letting us build truly differentiated capabilities and delight customers with Sensei-powered Adobe magic. As our customers rely on Adobe for ever-more mission-critical needs, we are laser-focused on engineering excellence and getting the basics right every single day. We are one of the first SaaS companies that has built a multi-cloud foundation, enabling us to deliver across various public, private, and hybrid cloud environments. And doing so with high levels of operational excellence as well as cost efficacy. Also, with Adobe's Common Controls framework, we are able to meet enterprise expectations for security, compliance, and privacy requirements, as well as the global regulatory landscape. Lastly, we continue to play a thought leadership role in the industry with various standards and other efforts like our Content Authenticity Initiative and Open Data Initiative. In closing, the opportunity ahead for Adobe is truly exciting. From the future of creativity to reimagining documents to the opportunity to completely rewire customer experience. We have a world-class engineering team with a deep culture of innovation and investments in foundational technology platforms that enable us to deliver with speed and scale. I have never been more confident about Adobe’s technology agenda, and I'm super excited about our ability to go invent the future.

Thanks, Abhay. So, while I've outlined more details of our Creative Cloud strategy in the deck, I'm excited to share a quick summary right now. Big picture, we are seeing tremendous growth momentum in Creative Cloud because creativity has never been more important than it is now. And we saw this at our most recent Max conference, which has become the premier global creativity conference. That's blew away all previous records with over 21 million views worldwide. Why is creativity so critical right now? Well, for starters, everyone wants to stand out – at work, at school, on social and even in their family projects. And creative expression is how they do it. Within the enterprise, companies more and more recognize that creativity is this competitive advantage. And employees want to stand out, whether it is with their presentations, how they visualize data, or become more active stakeholders in their own product and marketing experiences. In the workplace of the future, creativity is how people will thrive, and frankly, keep their jobs as AI takes over more and more of these productivity-focused roles. All of these shifts up-level the role of creativity and create a tremendous opportunity for Creative Cloud and a responsibility for us to evolve our offerings to meet the needs of new creators. So, let's take a look at the five pillars of our strategy for Creative Cloud. First, we are innovating to advance every creative category. Our professional customers want to push the boundaries of their fields and achieve more in less time. One way we're enabling this is through Adobe Sensei, which Abhay talked about, our artificial intelligence engine. In Photoshop, for instance, we recently launched Neural Filters, a new platform powered by Sensei that allows customers to make sweeping changes with just a scroll of a slider. These Neural Filters are truly magical. You can turn night into day and literally turn a frown into a smile. And neural filters are just one example of our Sensei-powered breakthroughs. At Max, we launched dozens of new Sensei features across our creative categories, and we're helping customers explore new mediums, like 3D and immersive, with tools such as Substance, Dimension, and Arrow. The pandemic has forced many teams to turn to 3D tools as they can render an image or video rather than have an in-person shoot. One great example is Ben & Jerry's, who levered our 3D and immersive products to execute a critical campaign about getting ice cream delivered during the pandemic. They found what many companies are finding that 3D rendered images are indistinguishable from traditional photos and they’re far more efficient and actually less expensive to produce. So, we expect a surging interest in that field to continue, especially as new mediums like augmented reality go mainstream. These innovations add value for creative professionals and help ensure that Creative Cloud remains the logical choice for modern teams struggling with content velocity, our way of talking about the insatiable need for more formats and more platforms and just more content, more personalized every day. And we're committed to extending their creativity in new directions. The next pillar of our strategy for Creative Cloud is a continued transformation of our category-leading products to become cloud-based multi-surface systems. Creativity is no longer confined to the desktop. And we made a lot of progress in extending our flagship products across more surfaces. Over the last year, we've brought Photoshop and Illustrator to the iPad, and we launched Adobe Fresco, the industry's most powerful drawing and painting app on Windows and Apple tablets last year, and brought it to the phone this year. Customers tell us that the portability of iPad apps unlocks huge advantages. Designers for Japanese theme parks, for instance, use Illustrator on the iPad to sketch out new features while they're actually inside the park. It really lets them see how the design will actually fit in in person in place. So, here's what we've learned from this evolution from product to service to multi-system platform expansion. We know that customers who use our products across multiple devices have higher satisfaction and better retention, and we know that offering a more modern interface on mobile devices is inviting for new customers and is an effective way to bring new customers into Creative Cloud from the mobile app stores. So, we're continuing to extend our applications onto new surfaces, including the web, which will engage an even broader set of customers and unlock another level of possibility for Creative Cloud. Another major part of our strategy is the development and seamless integration of powerful services that enable collaboration. No doubt we've entered a new era of creativity that is deeply, deeply collaborative. The next generation of our customers grew up in the age of Google Docs. They expect everything to be collaborative by default. And we've enabled this through our investments in Creative Cloud services over the last few years. We launched Creative Cloud Libraries, which helps teams share creative ingredients from fonts and colors to vectors and images. We rolled out Cloud Documents, which allows customers to easily share their work with collaborators and stakeholders. And with services like Stock and Fonts integrated at the point of need within our products, we're ensuring that teams have all the content they need to start a project without ever leaving Creative Cloud. Finally, we're making it much easier for stakeholders to review and share comments directly in our desktop products. All of these collaborative features make Creative Cloud the single source of truth for creative assets, ensuring greater lifetime value. These services also unlock new business opportunities and expand our footprint by engaging stakeholders beyond the traditional creative team, whether it be for review purposes, copywriting, or leveraging templates for social media marketing. Another area of focus is engagement and community inspiration. We're bringing many kinds of new customers into Creative Cloud these days. But to keep them, we have to ensure that they are engaged, that they're learning new skills, and that they're continuously inspired to try new tools and techniques. We're improving engagement by reimagining the new user journey, providing a more personalized experience for every customer that is infused with community and educational content. And we become very, very data-driven as we optimize these flows. We're providing many more ways for people to learn new skills. Traffic to Adobe Live, our rich offering of live streams by Behance members using our products and tutorials has doubled this year. And we have doubled our content in response. And the engagement with these live streams is truly remarkable. Over the last year, the average watch time is more than an hour and 20 minutes. We've also enabled live streaming in our iPad apps, so that any customer can easily go live from within the product and share the URL on social networks. Others can click the link and learn by looking over the shoulder of an experienced creator and download the app to give it a try as well. And we personalize learning experiences within our products. And as the more we personalize, the better we meet each customer exactly where they are. And because the greatest inspiration, of course, comes from seeing what others are creating, we're doing more to convene a global community of creatives. We've built a new community set of features in products like Lightroom. And Behance, our global creative community near and dear to my heart, has grown to 25 million members with over 1 million people visiting the site every single day. All of these efforts not only grow the top of the funnel but also make it more likely that these new customers will be successful, inspired, and engaged. Finally, let’s talk about democratizing creativity, which Shantanu mentioned in the beginning. We want to empower the world to create with a new generation of web and mobile products that are freemium and easy to use, and that leverage Adobe's core technology. When anyone searches the web, to edit a photo or make a flyer, we will present easy-to-use web apps that help them complete their project and encourage them to go further to take it to the next level. On mobile, Photoshop Express, Premiere Rush, and Adobe Spark empower everyday consumers to create content that stands out on social media. In the year ahead, we're bringing these products closer together to enable customers to work across them and to extend their work to the web. And we're doing this in a way only Adobe can. We're bringing powerful time-saving features, many powered by Sensei to these mobile and web apps. We're also prioritizing interoperability with the rest of Creative Cloud, so that more casual creators can work together with creative professionals, and so that they can take their work to the next level in an app like Photoshop or Illustrator when they're ready to do so. I'm excited to share more on these product investments in the year ahead. So, to sum it up, our view of our market is expanding to $41 billion in TAM in 2023 because the importance of creativity is growing fast and the number of creators worldwide is exploding. Our work over the next few years will ensure that Creative Cloud stays at the cutting edge of creativity in new mediums, that it supports the growth of collaborative creativity, and that it welcomes new generations of creators, with a new generation of tools and with the learning, inspiration, and community that will keep people engaged and successful. Thank you. And now, I'll turn it over to my colleague Anil, who oversees the digital experience business to talk about Experience Cloud.

I want to provide some insight into the Experience Cloud strategy that Shantanu discussed. You should have access to the full presentation we shared. In the first half of 2020, as COVID emerged, businesses prioritized employee safety and business continuity. We adapted and collaborated with our customers to navigate this new landscape. By the second half, businesses intensified their focus on customer experience management due to increased customer expectations. Customers are now digital-first and demand engaging, personalized experiences. This has put significant pressure on businesses to speed up their digital engagement. It has also highlighted the challenges businesses face in delivering exceptional experiences across various touchpoints. In today's environment, this is no small task. Companies must consider external factors like privacy regulations and data sovereignty while also dealing with internal issues like fragmented customer data and inefficient manual processes. Consequently, it is clear that businesses require a next-generation technology platform for customer experience management. This has created an enormous $85 billion market opportunity for customer experience management, and Adobe is in a prime position to capitalize on this. Our mission has never been more relevant, and our strategy to empower digital businesses is resonating with brands across different industries worldwide. We clearly saw this in 2020. A remarkable 93% of our top 100 customers utilize three or more Experience Cloud solutions, and our average annual recurring revenue from them has risen to $8 million, almost triple the amount from 2015. A notable example is Verizon, which has standardized on Adobe for customer experience management across its consumer, business, and media divisions over the past five years. The Adobe Experience platform provides real-time responses in 250 milliseconds at cloud scale across billions of profiles. Verizon is using AEP to deliver personalized communications, optimize customer journeys, boost conversions, and foster customer loyalty. Consequently, our annual recurring revenue from Verizon has surged by 700% over the past five years. This is an excellent illustration of the growth trends we observe within our customer base. Regarding our Experience Cloud strategy, it is rooted in Adobe's successful transformation journey. We have taken the principles and insights from our data-driven operational model and developed a customizable playbook that any customer can utilize to advance their digital business with next-generation customer experience management. Our strategy consists of five pillars, as Shantanu noted. Firstly, it includes a comprehensive suite of applications and services for customer data, insights, content, commerce, and customer journey management. These applications and services are integrated on a unified Adobe Experience platform. AEP is a next-gen platform designed to provide real-time personalization at scale, processing nearly 17 trillion segment evaluations daily, utilizing first-party data and cloud scale, powered by Adobe Sensei, and enhanced by our open ecosystem of partners and developers. We strive to deliver the best of both worlds to our customers: comprehensive apps and services integrated onto a common cloud scale platform. Having extensive experience in the data sector, I recognize that AEP is significantly ahead of our competitors in terms of capabilities and production deployments. We are also thrilled about our recent acquisition of Workfront, and we have received positive feedback from customers and partners. We are building a strong foundation for a marketing system of record that will enable our customers to improve efficiency and agility in executing their campaigns, optimizing them with real-time insights. Another key aspect of our strategy is that we have been a reliable partner to Chief Marketing Officers since we pioneered the digital marketing field, and now we also serve as trustworthy partners to Chief Information Officers. In mid-2020, we merged our global field operations and digital experience into a single organization under my leadership, which has allowed us to effectively scale our market strategy to meet the needs of enterprises from mid-market clients to the largest brands worldwide. Finally, we collaborate closely with our extensive ecosystem of over 2,800 systems integrators and technology partners to create business value and sustained growth. In conclusion, I am genuinely excited about the opportunities that lie ahead. Experience Cloud is a growth engine for us, and we will integrate our market and product organizations to be well-prepared to excel in all areas. When considering our products, platform, innovation powered by Adobe Sensei, customer relationships, brand strength, and our ongoing investments, Adobe stands out as the clear leader in customer experience management. We are ideally positioned to assist businesses in delivering personalized, engaging digital experiences to all their customers.

Thanks, Anil. And hello, everyone. A year ago, as Chief Strategy Officer, I spoke to you about Adobe's growth story, our total addressable market, and the tremendous opportunities across our business. As you've heard today, our strategy is more expansive than ever. And I'm confident in our ability to succeed because of our proven track record of transformation, something I've seen firsthand multiple times in my 20 plus years at the company. And I believe our secret sauce has been the combination of a winning strategy, great people, and an exceptional purpose-driven culture. My pivot from corporate strategy to employee strategy earlier this year was a natural move. People are our greatest asset. And as Chief People Officer, I'm excited to be carrying the torch for our values, our history of progressive people-centered benefits and programs and our commitment to the growth and development of over 22,000 employees around the world, now including Workfront, who joined us earlier this week. Increasingly, companies are viewed by employees, customers, and stakeholders as an extension of their identity, values, and community. In 2020, our core values were on full display, being genuine, exceptional, innovative, and involved. As we responded to COVID, we put the health and safety of our people first. We increased communications, rolled out work-from-home benefits, and encouraged scheduling flexibility. We took care of our communities, providing customers with flexibility and students with free Creative Cloud licenses. And our employees really stepped up this year, with 70% engaging in volunteerism online. Our employees have responded with gratitude and pride in our approach and are more engaged and productive than ever. As a people-centered company, we've always focused on fostering an inclusive culture, what we call Adobe For All. Because we believe that when employees can be their authentic selves, they do their best work. And when we have diverse teams, we're more innovative and reflective of the customers we serve. For employees to feel supported in and outside of work, we invest in learning and development programs, community networks, and family-friendly benefits. We're a leader in pay parity across gender and ethnicity and we're examining opportunity parity for fairness in promotions and horizontal movement. We're building current and future talent pipeline, investing in young artists in underserved communities, university partnerships, and mid-career rescaling and apprenticeships. This year's events made it clear that while we've made progress, there's more that we can do. As a company, we're about action, not words. And together with our Black Employee Network, we've launched the Taking Action Initiative focused on community, advocacy, and growth. And during our global Adobe For All week, we outlined aspirational goals to increase representation. Across our recruiting and development programs, our campaign celebrating women and Black creators and our efforts to ensure that our products are inclusive, we are driving change aligned to our core values. Another topic that's been top of mind for everyone is the future of work after the pandemic. So, let's talk briefly about that. This year, we learned that there's so much that we're able to do effectively while we work from home. We've launched new products, produced global customer events, and onboarded hundreds of interns and employees around the world. Digital transformation is here. And we'll continue to reimagine customer and employee experiences as a company. At the same time, we continue to believe that in-person experiences are critical to nurturing culture and trust, learning and development, and innovation. Each team will need to strike the right balance for them, but in general, we will be giving most employees the flexibility to work from home part of the time and making this the default as opposed to the exception. As for fully remote workers, this is something we already have today, especially amongst sales and consulting staff. Broadly expanding remote work is a significant decision that is not just about individual preference, but also has implications for collaboration, cohesion, and culture. We have more to learn here, and so we'll be starting by updating our criteria for remote work in the coming months and iterating thoughtfully, as we always do. This is clearly a journey, one that we expect will continue to evolve. As I reflect on the year, it's been a privilege for me to contribute to Adobe in this new capacity. Our employees achieved this record year through their dedication, camaraderie, and resilience. 2020 has shown us the power of Adobe's values in action, and I'm confident that Adobe's best days are ahead of us. And now, I'd like to turn it over to our CFO, John Murphy.

Thanks, Gloria. Based on what has been shared this morning, it's clear there are tremendous opportunities for Adobe. Now, I'd like to give you a view of our business momentum and how we drive our growth going forward. Today's presentation will cover both Q4 and fiscal year 2020 results. Before we jump into the numbers, in Q4, we made a change to our segment reporting to align with the way we manage our digital experience business in light of the Advertising Cloud shift we made earlier this year. We created a new segment called Publishing and Advertising, combining Advertising Cloud with the existing Publishing segment. As a result of this change, our digital experience subscription book of business now aligns exactly to the components that make up our Digital Experience subscription revenue. And it's great to have those aligned as that's where we're strategically driving segment growth. This reporting change is reflected in the numbers we will show for Q4 and FY 2020. And we've revised our financial information from FY 2018 to present day to maintain compatibility. Now, let's turn to our Q4 performance. Adobe achieved record revenue of $3.42 billion, which represents 14% year-over-year growth. GAAP diluted earnings per share in Q4 was $4.64. And non-GAAP diluted earnings per share was $2.81. Business and financial highlights in Q4 include Digital Media revenue of $2.5 billion, which represents 20% year-over-year growth, record net new Digital Media ARR of $548 million, Digital Experience revenue of $819 million, which represents 10% year-over-year growth. Digital Experience subscription revenue grew 14% year-over-year. We had record cash flow from operations of $1.78 billion, and we exited with remaining performance obligation or RPO of $11.34 billion. And we repurchased 1.6 million shares of our stock during the quarter. Overall, this is a really strong performance in Q4. Now for some Q4 financial highlights and growth drivers for each of our strategic businesses. In Q4, Adobe achieved $2.08 billion in Creative revenue, representing 20% year-over-year growth and added $425 million of net new Creative ARR. We exited the year with $8.72 billion in Creative ARR, which is also 20% growth year-over-year. Creative ARR growth drivers include acquisition of new users across all geographies and segments, single app and CC complete subscriptions, and strong performance in the imaging, video, and stock categories. Adobe Document Cloud achieved $411 million in Q4 revenue, growing 21% year-over-year. We added a record $123 million of Document Cloud ARR in the quarter, and Document Cloud ARR exiting the year was $1.46 billion, growing 35% year-over-year. Document Cloud ARR growth drivers include strong demand for Acrobat subscriptions, as well as demand coming through the Reader funnel and on mobile, and significant momentum in Sign. In Q4, we also benefitted from greater-than-expected perpetual revenue in our Document Cloud offering. Digital Experience achieved segment revenue of $819 million in Q4, representing 10% year-over-year growth, and subscription revenue of $696 million, representing 14% year-over-year growth. The growth drivers for Experience Cloud in Q4 included accelerating adoption of Adobe Experience Cloud platform and app services, content and commerce momentum, particularly with our AEM cloud service offering and continued recovery in the mid-market segment, as well as success signing up deals of greater than $1 million in annual deal value. For the full 2020 fiscal year, Adobe achieved record revenue of $12.87 billion, which represents 15% year-over-year growth. GAAP EPS for the year was $10.83 and non-GAAP EPS was $10.10. Contributing to our strong execution in FY 2020 was Digital Media segment revenue of $9.23 billion, representing 20% year-over-year growth; Creative revenue of $7.74 billion, representing 19% year-over-year growth; Adobe Document Cloud revenue of $1.5 billion, representing 22% year-over-year growth, exiting the year with $10.18 billion of Digital Media ARR, an annual increase of $1.85 billion; Digital Experience segment revenue of $3.13 billion, following the segment reporting change, representing 12% year-over-year growth; Digital Experience subscription revenue of $2.66 billion represents 17% year-over-year growth. We generated $5.73 billion in operating cash flows during the year, and we grew RPO by $1.52 billion and returned $3 billion in cash to our stockholders through our stock repurchase program. Next, let me provide more information around our strategic cloud businesses. We'll begin with our Digital Media segment, starting with Creative Cloud. We've highlighted a number of areas where we drove tremendous momentum in the Creative business. We continue attracting new customers with approximately 75% of our subscribers in fiscal 2020 being new to our Creative Cloud franchise. Over 45 million students have access to Adobe Spark, nearly doubling since last year, showing how we're developing creative skills for the next generation. Mobile continues to be an important funnel for us, with over 300 million mobile IDs created cumulatively, and over 80% year-over-year growth in mobile units as mobile monetization has become an important driver of ARR growth. Premiere Pro, Adobe Stock service growth and new media types are an important customer acquisition vehicle for us. Turning to revenue and ARR. We've seen another record year with our Creative Cloud. The Creative Cloud view shows an incredibly healthy business at scale, with sustained revenue growth over the last several years. We continue to see significant user acquisition across creative professionals, communicators, and consumers and revenue growth from services such as Adobe Stock continues to be strong. Key creative growth drivers exiting fiscal 2020 include new user growth fueled by organic traffic which remains elevated, as well as targeted campaigns and promotions. Demand for single apps, particularly our video and photography offerings, strong retention and engagement, which held at pre-COVID levels exiting the year, expansion into emerging markets, the gradual recovery in the SMB segment driving demand for our team offering including through the reseller channel; and ETLAs with educational institutions. This is such a great slide because it shows a mix of our Creative revenue in FY 2017 and FY 2020. Today, over 97% of our Creative revenue is subscription-based revenue, while the business has grown 85%. Much of our success here comes from a deep understanding of our customers, which continues to drive higher retention for us. As Scott and Abhay shared, this growth is also driven by our vast innovation engine across products and services as we expand into new markets. When you look at the makeup of ARR, a majority of the revenue continues to come from all-app subscriptions across individual team and enterprise, while a growing portion comes from single-app subscriptions consistent with our strategy of expanding our market opportunity as we attract new users in the consumer and communicator categories. With the most comprehensive set of creative offerings against every design category and service, we're using single app offerings as a proven on-ramp for new subscribers while we continue to grow our all-app business across all segments and as an upsell opportunity for single app and mobile users. The strength of Creative Cloud is derived from our diversified and resilient business, with offerings tailored for everyone from individuals to small businesses, education, and enterprises. We also have a deep understanding of how our customers want to engage with us. And you can see here the slight mix shift towards individual offerings through Adobe.com, while we continue to grow our team and ETLA offerings. Next, we're going to move on to Document Cloud. This business is thriving and has contributed significantly to the company's success this year, with over 70% of our channel units now being subscriptions and over 75% of subscribers in fiscal 2020 being new to the Acrobat franchise. As with the Creative business, our mobile strategy is driving Adobe ID creation at the top of the funnel. While mobile monetization is contributing to ARR growth, our focus on acquiring new customers coupled with our shift from perpetual base to subscriptions is working. The Document Cloud strategy of accelerating document productivity, going from paper to digital is really resonating in remote work environment. The Adobe Sign business has seen a growth inflection this year. In fact, we saw this inflection point before the pandemic hit, and we expect this trend to continue into FY 2021. As Gloria shared, we envision businesses with people working in flexible ways. Things will not default back to the way they were. To borrow Shantanu's phrase, the genie will not go back in the bottle. There's just an explosive opportunity for new user growth as we continue to capitalize on work from home or flexible work. We have multiple growth initiatives, including web-based PDF, Sign as a service, and the API economy that gives this business more legs. Turning to revenue and ARR. Document Cloud is another Adobe business that has powered past the billion-dollar mark, approaching $1.5 billion in both revenue and ARR. It's just a tremendous opportunity ahead for us. The key Document Cloud growth drivers exiting fiscal 2020 include new user acquisition of Acrobat subscriptions across all customer segments, monetization of our Reader install base on mobile, demand for our subscription offerings across all geographies and enterprise adoption, including strength in Adobe Sign. Keep in mind that we also offer Acrobat and PDF services through CC individual and all app subscriptions, which is another driver of growth in this business. Here you can see the phenomenal growth we're driven on subscriptions. While the non-recurring perpetual revenue accounts for a small portion of our revenue, it's in line with our strategy. This represents a continuing opportunity to transition that install base over to subscriptions. And you can see that the total business has nearly doubled in the last three years as we transitioned more of the business to recurring revenue sources. Unlike Creative Cloud, for Document Cloud, we continue to offer perpetual as a vehicle to have people come to the franchise. We have the flexibility of our offerings, given the breadth of our customer base, which has switched primarily to subscriptions. Looking at Digital Media as a whole, including both Creative and Document Cloud ARR, you have a view that any CFO would love to see. It's showing the stacking effects of recurring subscription revenue up into the right, ending the year with over $10 billion of annualized recurring revenue. When you think of the revenue base when we launched Creative Cloud less than a decade ago, it's amazing to see how we have expanded the market opportunity while transitioning nearly all the revenue from perpetual to recurring. This shows you the power and durability of our subscription model. Numbers like this don't happen without an extremely sophisticated system, our data-driven operating model, which is purpose-built to acquire more customers across geographies and to engage and drive higher retention. DDON, as we call it, is our weapon for finding and understanding the personalized offerings for our customers. The best part about DDON is that we use our own software, Adobe Experience platform, to drive this. Which brings me to the Digital Experience segment. Let's take a deeper look at Adobe's Digital Experience business. First of all, we're very excited to close the Workfront acquisition earlier this week, and we welcome the Workfront team to Adobe. When it comes to M&A at Adobe, we look at the technology and the people. Adobe has a great track record and history of acquiring companies, driving synergies, and accelerating growth. With Workfront, we're focused on our ability to accelerate growth through the marketing use case. As Anil shared, what's particularly exciting for us is that we have the opportunity to create an industry-leading marketing system of record. We're confident that our shareholders and customers will get maximum value, and this is a huge opportunity to accelerate subscription revenue growth for years to come. Workfront represents a sizable addressable market for Digital Experience. The targets we're providing for FY 2021 and Q1 are inclusive of Workfront. And we are looking forward to hitting the ground running integrating the business into our Digital Experience segment and expanding our opportunity with customer experience management. Digital Experience is a category we created a little over a decade ago, bridging from content creation all the way to marketing, execution, measurement, optimization, and monetization. This year, we achieved $3.13 billion in segment revenue. But more importantly, we have seen digital transformation and customer experience management resonating with our enterprise customers. More than ever before, for enterprises to succeed and provide the sort of personalized real-time experiences our customers expect, they require a technology partner that can help them transform their businesses the way we've reinvented our own digital media business with our data-driven operating model and focus on customer experience management. In my conversations with my peers across the C-suite, it's clear no matter their industry, they recognize the value in the digital transformation investment. And you can see the momentum here when you look at the makeup of our top 100 customers and accounts, where, in 2020, approximately 93% of those customers are using three or more of our solutions and the average ARR has more than doubled over the last five years. We've talked a lot about our focus on growing subscription SaaS revenue in this business. And you can see here how our focus on driving subscription revenue has driven segment growth over a multi-year period. The growth in our Digital Experience business has been driven across subscription offerings, with particular strength in enterprise adoption of content and commerce offerings, including AEM cloud service. Our Adobe Experience platform is gaining tremendous traction with a number of referenceable customers, such as Verizon, creating momentum. And we're also seeing continued recovery in the mid-market following the macroeconomic challenges we saw there early in the pandemic. Looking at the business by revenue type. Since 2018, we've held the services and other categories relatively flat, as we said we would, as we have focused on growing the recurring subscription SaaS revenue, which has grown at a 29% CAGR since 2018. In order to accomplish this, we've continued our strategy of leveraging the partner ecosystem that Anil talked about earlier, relying on those partners to implement our solutions and provide services to help our enterprise customers realize the value we are delivering. Here's a view of the revenue mix by category across our three strategic growth pillars of customer journey management, content and commerce, and data and insights. These are all market-leading solutions that are fundamental to customer experience management, which we built on a common data and content platform. The growth of these businesses is driven by customer demands to help maintain a digital presence and transact online, deliver personalized experiences to their customers, and unify and activate their data. With an $85 billion market opportunity, we are investing to drive long-term growth in these categories. And our comprehensive set of solutions and innovations in the platform puts us years ahead of the competition in solving these challenges for the enterprise. Now, let's focus a little more on the income statement and cash flow and our capital allocation strategy. There's another slide most of you folks would love to see, which is revenue growth and margin expansion, both on a GAAP and non-GAAP basis, with non-GAAP operating margin well over 40% for the year. Contributing to our margin expansion has been the sustainable revenue growth that we have worked on for decades, the operating leverage in our subscription model, and our strategic decision to exit the transactional Advertising Cloud business, as well as actions taken in response to the COVID pandemic and related cost savings associated with travel and reduced facilities operations. When we get to our FY 2021 targets, I'll provide some color on how you should think about those savings in those categories specifically going forward. Here you can see the balance of RPO, which were 15% year-over-year exiting fiscal 2020. This represents contracted business that is committed to flow into revenue in the future, making our revenue sources extremely predictable. The components of RPO are deferred revenue and unbilled backlog. And as we noted earlier this year, we've seen a mix shift from deferred revenue to unbilled backlog in fiscal 2020 as more of our digital media business has come through Adobe.com, where subscriptions are billed monthly rather than invoiced annually in advance, meaning they don't hit deferred revenue the way a lot of our channel and enterprise business would. As a result, the strength in the acquisition of adobe.com continues to drive the mix shift from deferred revenue to unbilled backlog. Moving to cash flow. In fiscal 2020, we saw an acceleration of our operating cash flow growth, achieving a record $5.73 billion for the year. In terms of uses of cash, we continue to prioritize investment in growing the business, both organically as well as through inorganic opportunities like the acquisition of Workfront. And, as always, we focus on returning capital to shareholders through our stock repurchase program. Exiting FY 2020, we had approximately $6 billion of cash and short-term investments as well as an unused billion-dollar credit facility. This is a healthy liquidity position with an investment-grade credit rating and plenty of debt capacity. And as I mentioned, we have a long track record of making sure we return excess cash to our shareholders through structured repurchases. On that point, you can see how we've continued increasing our investment in stock repurchases, reducing the share count over time. Today, we're announcing a new $15 billion repurchase authority in addition to the amount remaining under our current authority, which will run through the end of fiscal 2024, demonstrating our commitment to accelerating return of capital to investors. Now, I'd like to cover how you should think about financial strategy and our addressable markets, which underpin our preliminary targets for FY 2021. Let's start with our strategy. I'm going to touch on a few things on this slide. Adobe has a unique financial profile that we've discussed that drives our strategy. We invest for top-line growth and our operational discipline drives margin expansion and earnings growth over the long term. With a diversified portfolio of leading products and services, we are investing to drive continued top-line growth and expand into new categories with a massive market opportunity that's in front of us. What accelerates our growth are going to be investments that we've made in new businesses such as Adobe Stock, Sign and our mobile applications, which have contributed over $500 million of ARR growth since 2017. With data-driven dynamic planning capabilities, we exercise disciplined spend management principles, we focus on margin expansion and long-term earnings growth. We focus on integrating acquisitions quickly to ensure the same organic operating discipline is embedded in newly acquired businesses. And strict management of our balance sheet, prudent use of debt financing and cash has driven exceptional operating cash flow growth for many years, affording Adobe the opportunity to continue to invest in our existing businesses and capture promising inorganic growth opportunities and return capital to shareholders. As you've heard earlier in today's presentations, we have updated our addressable markets. And you can see that we are excited to capture the opportunity ahead through the extensive list of growth drivers and product innovations across Creative Cloud, Document Cloud, and Experience Cloud. With Creative Cloud, we're driving continued growth through broader customer segments by reaching beyond creative professionals to communicators and consumers and by engaging and inspiring our creative community to drive customer lifetime value. With Document Cloud, we see growth inflection through acquiring and monetizing new customers across desktop, mobile, and web. And finally, we continue to leverage and build upon our data-driven operating model to manage the business in real-time. All this leads to a $62 billion addressable market for digital media in 2023. Likewise, with the most comprehensive set of solutions for customer experience management applications and services and the addition of Workfront, our addressable market for Digital Experience has grown. We expect to drive multi-year growth of the data and insights category with our scaled next-generation customer data platform. The segment change we made in Q4 reflects the way we manage our business and our strategic focus. The Digital Experience organization is optimized to drive subscription and SaaS revenue growth, while gaining share of an $85 billion addressable market for Digital Experience. Before getting into our fiscal 2021 targets, I'm going to walk through some of the assumptions we've built in. We expect to see continued gradual macroeconomic improvement during the year. And as such, we're modeling continued recovery for the small and medium businesses into FY 2021, which was a segment that was hit particularly hard earlier in the pandemic and then showed signs of improvement during Q3 and Q4. We anticipate an increase in our effective tax rate due to additional taxes on our foreign operations following the changes we made to our international trading structure in FY 2020. Our FY 2020 tax rate included one-time benefits to recognize deferred tax assets resulting from these changes. These deductible assets will be amortized over a multi-year period, lowering our cash tax rate over that time. Targets include initial estimates associated with our acquisition of Workfront. These estimates involve numerous assumptions given the purchase accounting process has not been completed. The purchase accounting is expected to result in an increased amortization of intangible assets and significant deferred revenue haircut, resulting in an expected contribution of about $25 million to Q1 revenue. And as you know, we measure ARR on a constant currency basis during the fiscal year and revalue ARR at year-end for current currency rates. FX changes between December of 2019 and this year have resulted in a $77 million increase in Digital Media ARR. The effect of this revision is reflected in our updated investor datasheet. ARR results this year will be measured against this amount during FY 2021. The cost savings associated with the current remote work environment will continue into the first half of FY 2021. In terms of OpEx growth, we will be investing in top-line growth opportunities and our hiring is expected to return to an ordinary pace, particularly for R&D and sales and marketing roles. And we expect T&E and facilities expenses to ramp in the second half as things open back up. Lastly, FY 2021 is a 53-week fiscal year for us, with the additional week falling in Q1. As we noted in the press release, we estimate the extra week will benefit Q1 with approximately $240 million in additional revenue over a 13-week quarter, as well as an additional $25 million in net new Digital Media ARR.

Thanks, John. We are now going to move to live Q&A with all six of our executive speakers. For those of you who wish to ask a question, please go ahead and queue up now with our conference call operator, if you haven't done so already. And when you ask a question, please remember to mute your webcast to avoid any feedback. And due to the format, there may be a few seconds of latency. So please keep any interjections to a minimum. With that, operator, we'll take the first question.

Thank you for the great overview today. Shantanu, there have been some investor questions just on the current quarter around Digital Media and the percentage of upside relative to plan was a little lower than some had thought. And many are asking, is there anything to consider in the Digital Media business for the quarter? And then, maybe more importantly, looking into next year in Digital Experience, it seems like you're seeing some great momentum. Maybe Anil can talk about what is driving that increased confidence, momentum in that business? Thank you.

I'm happy to answer both questions and give you some color. First, as it related to Digital Media, we had record Q4 performance in Digital Media, $548 million in net new ARR, which is just phenomenal performance. I would say both Q3 and Q4 were very strong. And certainly, I think when you look at the back half of the year, as it relates to Digital Media, it was incredible performance. And when you look at our Q1 targets, as well as when you look at the targets for the entire fiscal 2021, as you know, these are the highest targets that we have given at the beginning of the year. And so, the growth drivers that we see in digital media just continue unabated. Everything from acquiring customers, upselling them, I think we tried, therefore, to give you real color between the individual apps and the full apps. And our data-driven operating model allows us to be pretty sophisticated. And so, relative even to our targets for Q4, as far as we're concerned, it was a beat, which showed the momentum that we had in the business. So, Digital Media ARR, nothing. We continue to believe in the expansion of the total addressable market and really pleased with our performance. As it relates to Digital Experience as well, I think the momentum there, what happened was, clearly in Q2 and Q3, as all companies were dealing with the pandemic, what was top of mind was customer continuity and safety of the employees. As soon as that pivoted, everybody was talking about digital as the only way out of the pandemic. And so, they started to look at who were the clear leaders in customer experience management and the conversations really accelerated for us. That was the momentum. The Adobe Experience platform being a clear leader, which is why as you look at our expectations for 2021 and what we believe will continue to be accelerating beyond that, we're pleased. And net-net, we're really excited about our 2021 targets.