+ Demand for Creative Cloud remains resilient. Creative Cloud revenue was US$2.8bn, up 8% YoY (13% YoY in constant currency). Creative Cloud annualized recurring revenue (ARR) grew by 8% YoY to US$11.3bn, adding US$307mn during the quarter. The growth was primarily driven by continued demand for its photography, imaging and video applications due to the surge in digital content creation. Key customer wins in 1Q23 include Accenture, Disney, BBC, and Nintendo.
+ Document Cloud strength continues. Document Cloud sales grew 13% YoY to US$634mn (16% YoY in constant currency) – the fastest growth of any segment in the quarter. Net new Document Cloud ARR was US$103mn, exiting the quarter with Document Cloud ARR of US$2.4bn. The growth was mainly due to its PDF capabilities and growth in e-signature transactions within Acrobat. Management noted that Acrobat is now the default PDF viewer in Microsoft Edge, which has an estimated 1bn users. Key customer wins in 1Q23 include HP, JPMorgan Chase, Samsung, and Verizon.
– Pressure from foreign exchange rates. Adobe’s revenue was negatively impacted due to the strengthening of the dollar against several key foreign currencies, including the Euro, British pound, and Japanese yen. In 1Q23, the unfavorable foreign exchange rate movement negatively impacted revenue by approximately US$200mn (or ~16% of PATMI).