Adobe Inc. (NASDAQ:ADBE) Q3 2019 Earnings Conference Call - Final Transcript

Sep 17, 2019 • 05:00 pm ET


Adobe Inc. (NASDAQ:ADBE) Q3 2019 Earnings Conference Call - Final Transcript


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Q & A

Thank you. [Operator Instructions] Our first question today from Keith Weiss with Morgan Stanley.

Keith Weiss

Thank you guys for taking the question. And very nice quarter, particularly on the Digital Media side of the equation. It does sound like you guys are having some sort of go-to-market and disruption impacts on the Digital Experience side of equation. I was hoping you could dig in a little bit further to help us explain exactly what's going on that side of the business. What does it take to fix that? Because definitely something like you were much more optimistic about that business a quarter ago.

And then maybe one for John. Is there any margin impact in terms of the increased investment and inside sales and some of the go-to-market stuff that is going to take to get Experience Cloud back up to the growth rates you guys are expecting?

Shantanu Narayen

Great. Keith, as you pointed out it was a strong quarter. We were pleased with the growth across the businesses. Since I suspect that there'll be a couple of people asking about Digital Experience. Let me go into a little bit more color on that particular opportunity. And let me clarify that there wasn't any impact associated with macro. The interest from enterprises, all sizes, different verticals in our comprehensive solutions remains incredibly strong. And even if you look at the targets that we've provided, it's clear that we are delivering strong revenue growth while actually accelerating the subscription bookings year-over-year on what is a much larger book of business because we do an apples-to-apples comparison.

I think as you think about Q3, it's clear we have leading solutions in the first mile and the last mile. So Adobe Experience Manager campaign and Magento had strong growth. The Magento acquisitions being viewed exceedingly well by customers. It's clearly very strategic and we grew the book of business greater than 40% in Q3 and actually have done a really good job of taking Magento into the enterprise.

The other part that we are absolutely clear about is that there is a new generation of enterprise software that's going to emerge, which will be required to digitally engage with customers across all these multiple channels. What it has to do is deliver first mile content experiences. That's the content and commerce fees. It has to segment audiences now in real time across multiple channels. You have to do customer journey management and orchestration and you have to provide data and insights to enable these AI services. We've been focused on this opportunity, just like we created the Digital Marketing category. We believe this is absolutely crucial for the Experience business and so we build the Adobe Experience Platform from scratch to deliver. what we call dome [Phonetic] in terms of how we run our own digital business. Customers are really excited. It's the first software actually that exist that's designed to specifically integrate the needs of the CMO, the Chief Revenue Officer, and the CIO.