Adobe Inc. (NASDAQ:ADBE) Q1 2018 Earnings Conference Call - Final Transcript

Mar 15, 2018 • 05:00 pm ET

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Adobe Inc. (NASDAQ:ADBE) Q1 2018 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

[Operator Instructions] Your first question comes from Adam Holt with MoffettNathanson.

Analyst
Adam Holt

Hi, guys. Thanks very much and congratulations on another spectacular quarter, 60% plus EPS growth, just amazing. I guess my question is for Shantanu. As we head into the Summit event, it's an interesting market. We've been seeing headlines about companies like Procter & Gamble cutting digital media spend. And it's been -- it sort of seems like a little bit more of a mixed environment, yet you all continue to do well.

And I wanted to, A, get your sense for how the end market feels to you? Whether things like cut on digital spend trickles down into your market? And, B, just thinking about the growth rates, do you feel like you're at steady state with sort of Digital Experience at 15%? Or can that -- can you do better as some of your products get more mature? That's it. Thanks.

Executive
Shantanu Narayen

Thanks, Adam. As it relates to digital transformation and what's happening in the Digital Experience business, it actually feels like the spending environment for digital within enterprises remains unaffected by what you're referring to as marketing spend. And the reason for that is that everybody is trying to engage with their customers digitally across touch points.

And as you know, our offering, which is the most comprehensive, actually has everything to do with not just the advertising spend aspect of marketing but also the delivery of the content, the multichannel campaign communication, the audience segmentation. And to give you maybe a little bit more color on that, Adam, it's really about -- the themes that we hear about are first, every business is trying to do customer segmentation.

Every business is trying to do -- ensuring that they can personalize the experience they're delivering for their customers, and running the business, frankly, by looking at real-time metrics, which correspond clearly to our Audience Manager product, our Analytics product and our Campaign product. So it feels like long term, the digital media spend is only going to increase. People are going to ask for more attribution associated with it. And so it feels really strong.

We had a strong revenue as well as a booking's quarter. The last thing I might say in that is if you look at the underlying business, I think we said in the prepared remarks that the revenue actually grew greater than 20%. And that's as a result of us focusing a lot more on subscription bookings and subscription revenue rather than focusing on services because we have an incredibly large ecosystem of partners. So feels really good, and we expect the momentum to continue.

Analyst
Adam Holt

That's great. Thank you.

Operator
Operator

Your next question comes from Ross MacMillan with RBC Capital Markets. Your line is open.

Analyst
Ross MacMillan

Thanks so much and my congratulations as well. Maybe just on actually on Digital Media. I'm curious on the comment on 86% attach of services on Creative Cloud. I'm just curious as to, is there any way to think