Adobe (ADBE) 10-K risk factor changes: FY2020 vs FY2019

The markets for our products and services are characterized by intense competition, new industry standards, evolving distribution models, limited barriers to entry, disruptive technology developments, short product life cycles, customer price [removed: sensitivity] [added: sensitivity, global market conditions] and frequent product introductions (including alternatives with limited functionality available at lower costs or free of charge).

Our future success will depend on our continued ability to enhance and integrate our existing products and services, introduce new products and services in a timely and cost-effective manner, meet changing customer expectations and needs, extend our core technology into new applications, and anticipate emerging standards, business models, software delivery methods and other [removed: technological developments.]

[removed: [*For] [added: *[For] additional information regarding our competition and the risks arising out of the competitive environment in which we operate, see the section entitled “Competition” contained in Part [removed: I.][added: I, Item 1 of this report.](#ib32ef6f531ec46d8a6555201235bf70f_25)*]

The introduction [removed: of] [added: of, or limitations on,] certain technologies may reduce the effectiveness of our products.

[removed: We use these cookies] [added: These technologies are used in our products] to help our customers more effectively advertise, gauge the performance of their advertisements and detect and prevent fraudulent activity.

Consumers can [removed: block or delete cookies] [added: control the use of these technologies] through their [removed: browsers] [added: browsers, device settings] or “ad-blocking” software or applications.

Increased use of [added: such] methods, software or applications that block cookies [added: or other identifiers] could harm our business.

[removed: Occasionally, we migrate data among data] centers and to third-party hosted environments.

Government officials and regulators, privacy advocates and class action attorneys [added: are increasingly scrutinizing how companies collect, process, use, store, share and transmit personal data.]

Globally, new and emerging laws, such as the General Data Protection Regulation (“GDPR”) and the Network and Information Systems Directive (“NISD”) in Europe, state laws in the U.S. on privacy, data and related technologies, such as the California Consumer Privacy [added: Act and the recently passed California Privacy Rights] Act, as well as industry self-regulatory codes create new compliance obligations and expand the scope of potential liability, either jointly or severally with our customers and suppliers.

[removed: Additionally, we collect and store] information on behalf of our business customers and if our customers fail to comply with contractual obligations or applicable laws, it could result in litigation or reputational harm to us.

For example, European data transfers outside the European Economic Area are highly [removed: regulated.][added: regulated and litigated.]

The mechanisms that we and many other companies rely upon for European data transfers (e.g., Privacy Shield and Model Clauses) are [removed: being contested in] the [added: subject of recent judicial decisions by the Court of Justice of the] European [removed: court system.][added: Union resulting in the invalidation of Privacy Shield.]

We are closely monitoring [added: the impact of the Privacy Shield invalidation and other] developments related to [removed: requirements] [added: the remaining valid transfer mechanisms available] for transferring personal data outside the European Union and other countries that have similar trans-border data flow [removed: requirements.][added: requirements and adjusting our practices accordingly.]

[removed: These requirements may result] [added: The invalidation of Privacy Shield and the open questions related to the validity of Model Clauses have resulted] in [removed: an increase] [added: some changes] in the obligations required to provide our services in the European Union [removed: or in] [added: and could expose us to potential] sanctions and fines for non-compliance.

Several other countries, including [removed: Australia] [added: Australia, New Zealand, Brazil,] and Japan, have also established specific legal requirements for cross-border transfers of personal information.

If [removed: the mechanisms for transferring personal information from certain countries or areas, including Europe to the United States, should be found invalid or if] other countries implement more restrictive regulations for cross-border data transfers (or [added: do] not permit data to leave the country of origin), such developments could [removed: harm] [added: impact] our business, financial condition and results of [removed: operations.][added: operations, in those jurisdictions.]

[removed: | • |] [added: -] the need for our sales representatives to educate customers about the use and benefit of large-scale deployments of our products and services, including technical capabilities, security features, potential cost savings and return on investment; [removed: |]

[removed: | • |] [added: -] the desire of organizations to undertake significant evaluation processes to determine their technology requirements prior to making information technology expenditures; [removed: |]

[removed: | • |] [added: -] the need for our representatives to spend a significant amount of time assisting potential customers in their testing and evaluation of our products and services; [removed: |]

[removed: | • |] [added: -] intensifying competition within the industry; [removed: |]

[removed: | • |] [added: -] the negotiation of large, complex, enterprise-wide contracts; [removed: |]

[removed: | • |] [added: -] the need for our customers to obtain requisition approvals from various decision makers within their organizations due to the complexity of our solutions touching multiple departments within customers’ organizations; and [removed: |]

[removed: | • |] [added: -] customer budget constraints, economic conditions and unplanned administrative delays. [removed: |]

[added: Moreover, under certain] circumstances, some of our customers have the right to cancel their agreements prior to the expiration of the terms.

Our customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their level of satisfaction with our services, our ability to continue enhancing features and functionality, the reliability (including uptime) of our subscription offerings, the prices of offerings and those offered by our competitors, the actual or perceived information security of our systems and services, decreases in the size of our customer base, reductions in our customers’ spending levels or declines in customer activity as a result of economic downturns or uncertainty in financial [removed: markets.][added: markets, including as a result of the COVID-19 pandemic.]

[removed: | • |] [added: -] foreign currency fluctuations and controls; [removed: |]

[removed: | • |] [added: -] international and regional economic, political and labor conditions, including any instability or security concerns [removed: abroad and] [added: abroad, including uncertainty caused by] the United Kingdom’s [removed: vote to] exit [added: from] the European Union [removed: (Brexit); |][added: (Brexit) on January 31, 2020, including the effects of the Trade and Cooperation Agreement between the European Union, the European Atomic Energy Community and the United Kingdom signed on December 30, 2020, as well as uncertainty caused by the evolving relations between the United States and China;]

[removed: | • |] [added: -] tax laws (including U.S. taxes on foreign subsidiaries); [removed: |]

[removed: | • |] [added: -] increased financial accounting and reporting burdens and complexities; [removed: |]

[removed: | • |] [added: -] changes in, or impositions of, legislative or regulatory requirements; [removed: |]

[removed: | • |] [added: -] changes in laws governing the free flow of data across international borders; [removed: |]

[removed: | • |] [added: -] failure of laws to protect our intellectual property rights adequately; [removed: |]

[removed: | • |] [added: -] inadequate local infrastructure and difficulties in managing and staffing international operations; [removed: |]

[removed: | • |] [added: -] delays resulting from difficulty in obtaining export licenses for certain technology, tariffs, quotas and other trade barriers; [removed: |]

[removed: | • |] [added: -] the imposition of governmental economic sanctions on countries in which we do business or where we plan to expand our business; [removed: |]

[removed: | • |] [added: -] costs and delays associated with developing products in multiple languages; [removed: |]

[removed: | • |] [added: -] operating in locations with a higher incidence of corruption and fraudulent business practices; and [removed: |]

[removed: If sales to any of our] customers outside of the Americas are reduced, delayed or canceled because of any of the above factors, our revenue may decline.

The failure of third parties to provide acceptable products and services or to update their [removed: technology] [added: technology, including during the COVID-19 pandemic,] may result in a disruption to our business operations and those of our customers, which may reduce our revenues and profits, cause us to lose customers and damage our reputation.

Risks Related to Our Ability to Grow Our Business

The effects of the COVID-19 pandemic have materially affected how we and our customers are operating our businesses, and the duration and extent to which this will impact our future results of operations and overall financial performance remains uncertain.

The COVID-19 pandemic and related public health measures have materially affected how we and our customers are operating our businesses, and have materially affected our operating results.

Due to our subscription-based business model, the effect of the pandemic may not be fully reflected in our results of operations until future periods.

If the pandemic has a substantial impact on our employees’, partners’ or customers’ businesses and productivity, our results of operations and overall financial performance may be harmed.

The global macroeconomic effects of the pandemic may persist for an indefinite period, even after the pandemic has subsided.

As a result of the pandemic, we have temporarily closed Adobe offices globally and have implemented certain travel restrictions.

This global work-from-home operating environment has caused strain for, and may adversely impact the productivity of, certain employees, and these conditions may persist and harm our business, including our future operating results.

Additionally, our efforts to re-open our offices safely may not be successful, could expose our employees, customers, and partners to health risks, and us to associated liability, and will involve additional financial burdens.

The pandemic may have long-term effects on the nature of the office environment and remote working, and this may present operational challenges that may adversely affect our business.

We have shifted all of our in-person customer events through July 2021 to virtual-only experiences and we may deem it advisable to similarly alter, postpone or cancel entirely additional customer, employee or industry events in the future.

Our virtual customer, employee and industry events may not be as successful as in-person events.

Moreover, the conditions caused by the pandemic have affected the rate of IT spending and may continue to adversely affect our customers’ ability or willingness to purchase our offerings.

We have seen and may continue to see these conditions delay prospective customers’ purchasing decisions, adversely impact our ability to provide on-site consulting services to our customers, result in extended payment terms, reduce the value or duration of their subscription contracts, or affect attrition rates, all of which could adversely affect our future sales, operating results and overall financial performance.

Our operations have also begun to be negatively affected by a range of external factors related to the pandemic that are not within our control.

Authorities throughout the world have implemented measures to contain or mitigate the spread of the virus, including physical distancing, travel bans and restrictions, closure of non-essential businesses, quarantines, work-from-home directives and shelter-in-place orders.

These measures have caused, and are continuing to cause, business slowdowns or shutdowns in affected areas, both regionally and worldwide, which have impacted our business and results of operations, and may also delay the provisioning of our offerings.

The extent of the impact from the pandemic depends on future developments that cannot be accurately predicted at this time, such as the duration and spread of the pandemic, the extent and effectiveness of containment actions and the impact of these and other factors on our employees, customers, partners and vendors.

If we are not able to respond to and manage the impact of such events effectively, our business will be harmed.

Finally, to the extent that the pandemic harms our business and results of operations, many of the other risks described in this “Risk Factors” section may be heightened.

technological developments.

For example, some of our products rely on third-party cookies or other identifiers where the permissions are managed through web browsers or mobile operating systems.

Our ability to acquire other businesses or technologies, make strategic investments or integrate acquired businesses effectively may also be impaired by the effects of the COVID-19 pandemic, government actions in light of the pandemic, trade tensions and increased global scrutiny of foreign investments.

For example, a number of countries, including the U.S. and countries in Europe and the Asia-Pacific region, are considering or have adopted restrictions on foreign investments.

Governments may continue to adopt or tighten restrictions of this nature, and such restrictions could negatively impact our business and financial results.

Social and ethical issues relating to the use of AI in our offerings may result in reputational harm and liability.

Social and ethical issues relating to the use of new and evolving technologies such as artificial intelligence (AI) in our offerings, may result in reputational harm and liability, and may cause us to incur additional research and development costs to resolve such issues.

We are increasingly building AI into many of our offerings.

As with many innovations, AI presents risks and challenges that could affect its adoption, and therefore our business.

AI presents emerging ethical issues and if we enable or offer solutions that draw controversy due to their perceived or actual impact on society, we may experience brand or reputational harm, competitive harm or legal liability.

Potential government regulation in the space of AI ethics may also increase the burden and cost of research and development in this area, subjecting us to brand or reputational harm, competitive harm or legal liability.

Failure to address AI ethics issues by us or others in our industry could undermine public confidence in AI and slow adoption of AI in our products and services.

Risks Related to the Operation of Our Business

In addition, the COVID-19 pandemic could potentially disrupt the supply chain of hardware needed to maintain these third-party systems and services or to run our business.

Occasionally, we migrate data among data

This existing risk is potentially compounded given the COVID-19 pandemic and the resulting shift to work-from-home arrangements for a large population of employees and contractors.

Further, restrictions in place for the COVID-19 pandemic have resulted and could continue to result in our inability to negotiate in person.

- other factors beyond our control, such as terrorism, war, natural disasters and pandemics, including fluctuations in the severity and duration of the COVID-19 pandemic and resulting restrictions on business activity which may vary significantly by region.

If sales to any of our

We increasingly utilize the distribution platforms of third parties like Apple’s App Store and Google’s Play Store for the distribution of certain of our product offerings.

Item 1 of this report.*](#sAB22ECD1F1DC5F9FA7B43EA4457C9ABC)

For example, some of our products rely on third-party cookies, which are placed on individual browsers when consumers visit websites that contain advertisements.

The most common Internet browsers allow consumers to modify their browser settings to prevent cookies from being accepted by their browsers, or are set to block third-party cookies by default.

are increasingly scrutinizing how companies collect, process, use, store, share and transmit personal data.

Transferring personal information across international borders is becoming increasingly complex.

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Moreover, under certain

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Discussion regarding our financial condition and results of operations for [removed: fiscal* *2018* *as] [added: fiscal 2019 as] compared to [removed: fiscal* *2017* *is] [added: fiscal 2018 is] included in Item 7 of our Annual Report on Form 10-K for the fiscal year [removed: ended* *November 30, 2018,] [added: ended November 29, 2019,] filed with the SEC [removed: on* *January 25,2019.*][added: on January 21, 2020.*]

During fiscal 2019, we acquired the remaining interest in Allegorithmic SAS (“Allegorithmic”), a privately held 3D editing and authoring software company for gaming and entertainment, for approximately [removed: $106.2] [added: $106] million in cash consideration, and integrated it into our Digital Media reportable segment.

During fiscal 2018, we completed our acquisitions of Marketo, a privately held marketing cloud platform company, for [added: approximately] $4.73 billion and Magento, a privately held commerce platform company, for [added: approximately] $1.64 billion, and integrated them into our Digital Experience reportable segment.

[removed: [See] [added: *[See] Note 3 of our Notes to Consolidated Financial Statements for further information regarding these acquisitions, including pro forma financial information related to the Marketo [removed: acquisition.](#s6C70149DB4C35AD0B3B726EAC4ED2923)] [added: acquisition.](#ib32ef6f531ec46d8a6555201235bf70f_139)*] Pro forma information has not been presented for our other acquisitions during the fiscal years presented as the impact to our Consolidated Financial Statements was not material.

[removed: On a regular basis, we] [added: We] evaluate our assumptions, judgments and [removed: estimates.][added: estimates on a regular basis.]

[removed: Cloud-based features that are integral to our Creative Cloud and Document Cloud offerings and that work together with the on-premise/on-device software include, but are not limited to: Creative Cloud Libraries, which enable customers to access their work, settings, preferences, and other assets seamlessly across desktop and mobile devices and collaborate across teams in] real time; shared reviews which enable simultaneous editing and commenting of PDFs across desktop, [removed: mobile,] [added: mobile] and web; automatic cloud rendering of a design which enables it to be worked on in multiple mediums; and Sensei, Adobe’s cloud-hosted artificial intelligence and machine learning framework, which enables features such as automated photo-editing, photograph content-awareness, natural language processing, optical character [removed: recognition,] [added: recognition] and automated document tagging.

[removed: | • |] [added: -] future expected cash flows from software license sales, subscriptions, support agreements, consulting contracts and acquired developed technologies and patents; [removed: |]

[removed: | • |] [added: -] historical and expected customer attrition rates and anticipated growth in revenue from acquired customers; [removed: |]

[removed: | • |] [added: -] the acquired company’s trade name and trademarks as well as assumptions about the period of time the acquired trade name and trademarks will continue to be used in the combined company’s product portfolio; [removed: |]

[removed: | • |] [added: -] the expected use of the acquired assets; and [removed: |]

[removed: | • |] [added: -] discount rates. [removed: |]

In addition, we are subject to the continual examination of our income tax returns by the U.S. Internal Revenue Service [removed: (“IRS”)] and other domestic and foreign tax authorities.

[removed: We expect future] [added: These tax] examinations [added: are expected] to focus on our intercompany transfer pricing [removed: practices as well as] [added: practices, application of tax rules, and] other matters.

We believe such estimates to be reasonable; however, [added: we cannot provide assurance that] the final determination of any of these examinations [removed: could significantly] [added: will not have a significant] impact [added: on] the amounts provided for income taxes in our Consolidated Financial Statements.

[removed: [*See] [added: *[See] Note 1 of our Notes to Consolidated Financial Statements for information regarding recent accounting pronouncements that are of significance, or potential significance to [removed: us.*](#s9DF0F31FE6B758A883F8146A178AF438)][added: us.](#ib32ef6f531ec46d8a6555201235bf70f_133)*]

We are also a market leader with our [removed: Adobe] Document Cloud offerings built around our Adobe Acrobat family of products, including Adobe Acrobat Reader DC, and a set of integrated [added: mobile apps and] cloud-based document services, including Adobe [added: Scan and Adobe] Sign.

Adobe Acrobat [removed: DC, with a touch-enabled user interface,] [added: DC] is offered both through subscription and perpetual licenses.

| Creative ARR | [added: | |] Annual Value of Creative Cloud Subscriptions and Services + Annual Creative ETLA Contract Value | | [added: | | | |]

| Document Cloud ARR | [added: | |] Annual Value of Document Cloud Subscriptions and Services + Annual Document Cloud ETLA Contract Value | | [added: | | | |]

| Digital Media ARR | [added: | |] Creative ARR + Document Cloud ARR | | [added: | | | |]

Creative ARR exiting fiscal [removed: 2019] [added: 2020] was [removed: $7.31] [added: $8.72] billion, up from [removed: $5.92] [added: $7.25] billion at the end of fiscal [removed: 2018.][added: 2019.]

Document Cloud ARR exiting fiscal [removed: 2019] [added: 2020] was [removed: $1.09] [added: $1.46] billion, up from [removed: $791 million] [added: $1.08 billion] at the end of fiscal [removed: 2018.][added: 2019.]

Total Digital Media ARR grew to [removed: $8.40] [added: $10.18] billion at the end of fiscal [removed: 2019,] [added: 2020,] up from [removed: $6.71] [added: $8.33] billion at the end of fiscal [removed: 2018.][added: 2019.]

Revaluing our ending ARR for fiscal [removed: 2019] [added: 2020] using currency rates at the beginning of fiscal [removed: 2019,] [added: 2021,] our Digital Media ARR at the end of fiscal [removed: 2019] [added: 2020] would be [removed: $8.33] [added: $10.26] billion or approximately [removed: $66] [added: $77] million [removed: lower] [added: higher] than the ARR reported above.

Creative revenue in fiscal [removed: 2019] [added: 2020] was [removed: $6.48] [added: $7.74] billion, up from [removed: $5.34] [added: $6.48] billion in fiscal [removed: 2018] [added: 2019] and representing [removed: 21%] [added: 19%] year-over-year growth.

Total Digital Media segment revenue grew to [removed: $7.71] [added: $9.23] billion in fiscal [removed: 2019,] [added: 2020,] up from [removed: $6.33] [added: $7.71] billion in fiscal [removed: 2018] [added: 2019] and representing [removed: 22%] [added: 20%] year-over-year growth.

[removed: By combining the creativity of our Digital Media business] with the science of our Digital Experience business, we help our customers to more efficiently and effectively make, manage, measure and monetize their content across every channel with an end-to-end workflow and feedback loop.

[removed: We achieved record] Digital Experience revenue [removed: of $3.21] [added: was $3.13] billion in fiscal [removed: 2019,] [added: 2020,] up from [removed: $2.44] [added: $2.80] billion in fiscal [removed: 2018] [added: 2019] which represents [removed: 31%] [added: 12%] year-over-year growth.

Driving this increase was the increase in subscription revenue across our offerings which grew to [removed: $2.67] [added: $2.66] billion in fiscal [removed: 2019] [added: 2020] from [removed: $1.95] [added: $2.28] billion in fiscal [removed: 2018,] [added: 2019,] representing [removed: 37%] [added: 17%] year-over-year growth.

Our financial results for fiscal [added: 2020 and] 2019 are presented in accordance with [removed: the new revenue standard that] [added: Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which] was adopted under the modified retrospective method at the beginning of fiscal 2019.

[removed: [*See] [added: *See] Note [removed: 2] [added: 3] of our Notes to Consolidated Financial Statements for [added: further] information regarding [removed: adoption of the new revenue standard.*](#s80FD33E1AADB525984016D9E277DCDDB)][added: this acquisition*.]

*Financial Performance Summary for [removed: Fiscal* *2019*][added: Fiscal 2020*]

[removed: | • | Total Digital Media ARR of approximately $8.40 billion as of November 29, 2019 increased by $1.69 billion, or 25%, from $6.71 billion as of November 30, 2018.] The [removed: change] [added: increase] in our Digital Media ARR was primarily due to [removed: stronger] new user adoption of our Creative Cloud and [removed: Adobe] Document Cloud offerings. [removed: |]

[removed: | • |] [added: -] Cost of revenue of [removed: $1.67] [added: $1.72] billion increased by [removed: $477.7] [added: $49] million, or [removed: 40%,] [added: 3%,] during fiscal [removed: 2019,] [added: 2020,] from [removed: $1.19] [added: $1.67] billion in fiscal [removed: 2018. The increase was] [added: 2019] primarily due to increases in [removed: amortization of intangibles from our acquisition of Magento and Marketo in the later part of fiscal 2018. To a lesser extent, increases in] hosting services and data center [removed: costs also contributed to the overall increase] [added: costs, offset] in [removed: cost of revenue. |][added: large part by decreases in Advertising Cloud media costs.]

[removed: | • |] [added: -] Net cash [removed: flow] [added: flows] from operations of [removed: $4.42] [added: $5.73] billion during fiscal [removed: 2019] [added: 2020] increased by [removed: $392.5 million,] [added: $1.31 billion,] or [removed: 10%,] [added: 30%,] from [removed: $4.03] [added: $4.42] billion during fiscal [removed: 2018] [added: 2019] primarily due to higher net income adjusted for the net effect of non-cash items. [removed: This increase was offset in part by comparatively lower increases in income taxes payable and higher increases in prepaid expenses and other assets. |]

| *(dollars in millions)* | | [added: | | | | 2020 | | | | | |] 2019 | | | | [added: | |] 2018 | | | | [removed: 2017] | | [added: % Change 2020-2019] | | [added: | | | |] % Change 2019-2018 | | [added: |]

| Percentage of total revenue | | [removed: 89] | | [added: | | 90 | |] % | | [removed: 88] | | [added: 86 | |] % | | [added: | |] 84 | | % | | | | [added: | | | | | | | | |]

| Percentage of total revenue | | [added: | | | | 4 | | % | | | |] 6 | | % | | [added: | |] 7 | | % | | [removed: 10] | | [removed: %] | | | | [added: | | | | |]

| Percentage of total revenue | | [removed: 5] | | [added: | | 6 | |] % | | [removed: 5] | | [added: 8 | |] % | | [removed: 6] | | [added: 9 | |] % | | | | [added: | | | | | | | | |]

Our subscription revenue is comprised primarily of fees we charge for our subscription and hosted service [removed: offerings] [added: offerings, and related support,] including Creative Cloud and certain of our [removed: Digital] [added: Adobe] Experience [added: Cloud] and Document Cloud services.

Subsequent to November 27, 2020, we completed our acquisition of Workfront, a privately held company that provides a work management platform for marketers, for approximately $1.5 billion in cash consideration.

Workfront will be integrated into our Digital Experience reportable segment for financial reporting purposes in the first quarter of fiscal 2021.

Cloud-based features that are integral to our Creative Cloud and Document Cloud offerings and that work together with the on-premise/on-device software include, but are not limited to: Creative Cloud Libraries, which enable customers to access their work, settings, preferences and other assets seamlessly across desktop and mobile devices and collaborate across teams in

During fiscal 2020, we completed intra-entity transfers of certain intellectual property rights (“IP rights”) which resulted in the establishment of deferred tax assets, net of valuation allowance, and related tax benefits of $224 million and $1.13 billion, based on the fair value of the IP rights transferred in April and November 2020, respectively.

The determination of the fair value involves significant judgment on future revenue growth, operating margins and discount rates.

Unanticipated events and circumstances may occur that could affect either the accuracy or validity of such assumptions, estimates or actual results.

The sustainability of our future tax benefits is dependent upon the acceptance of the valuation estimates and assumptions by the taxing authorities.

Overview of 2020

For our fiscal 2020, we experienced strong demand across our Digital Media offerings consistent with the continued execution of our long-term plans with respect to this segment.

In our Digital Experience segment, we continued to experience growth in software-based subscription revenue across our portfolio of offerings.

During the second quarter of fiscal 2020, we began to discontinue our transaction-driven Advertising Cloud offerings, allowing us to focus our investment on strategic growth initiatives.

In the fourth quarter of fiscal 2020, we moved our Advertising Cloud offerings from our Digital Experience segment into our new Publishing and Advertising segment, which combined Advertising Cloud with our previous Publishing segment.

This realignment is consistent with how we manage our Digital Experience segment to better reflect the strategic shift related to Advertising Cloud and to align with our overall core value proposition of delivering on customer experience management.

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Document Cloud revenue in fiscal 2020 was $1.50 billion, up from $1.22 billion in fiscal 2019 and representing 22% year-over-year revenue growth and reflecting an increase in demand driven by the shift to remote work as well as our continued efforts to transition Document Cloud to a subscription-based model.

These increases were driven by strong net new user growth, including those resulting from the current work-from-home environment reflecting expanded digital engagement.

The Adobe Experience Cloud applications, services and platform are designed to manage customer journeys, enable shoppable experiences and deliver intelligence for businesses of any size in any industry.

Our differentiation and competitive advantage is strengthened by our ability to use the Adobe Experience Platform to connect our comprehensive set of solutions.

Adobe Experience Cloud is focused on delivering solutions for our enterprise customers across the following strategic growth pillars:

- *Customer data and insights.* Our solutions deliver real-time customer profiles and intelligence across the customer journey.

Our offerings include Adobe Experience Platform, Adobe Analytics, Adobe Audience Manager, Customer Journey Analytics, Real-time Customer Data Platform and Intelligent Services.

- *Content and commerce.* Our solutions to help customers manage, deliver, test, target and optimize content delivery and enable shopping experiences that scale from mid-market to enterprise businesses.

Our offerings include Adobe Experience Manager, Adobe Target and Adobe Commerce.

- *Customer journey management.* Our solutions help businesses manage, personalize and orchestrate campaigns and customer journeys across B2E use cases.

Our offerings include Adobe Campaign, Marketo Engage and Journey Orchestration.

By combining the creativity of our Digital Media business

Digital Experience revenue for all fiscal years presented has been updated to reflect the Advertising Cloud segment move.

COVID-19 UPDATE

In March 2020, the World Health Organization declared the outbreak of a disease caused by a novel strain of the coronavirus (COVID-19) to be a pandemic.

This pandemic has had widespread, rapidly-evolving and unpredictable impacts on global societies, economies, financial markets and business practices.

Federal and state governments have implemented measures in an effort to contain the virus, including physical distancing, travel restrictions, border closures, limitations on public gatherings, work from home, supply chain logistical changes and closure of non-essential businesses.

Our focus remains on promoting employee health and safety, serving our customers and ensuring business continuity.

As a result, we have taken action to direct our teams to work from home, suspend travel and replace in-person events such as Adobe Summit and MAX, with digital events through July 2021.

During the pandemic, digital has become the primary way for people to connect, work, learn and be entertained, and for businesses to engage with customers.

This macro trend towards all things digital has increased the importance and relevance of our solutions and accelerated the tailwinds that benefit our business, which contributed to our continued growth year over year.

However, while our revenue and earnings are relatively predictable as a result of our subscription-based business model, the broader implications of the pandemic on our results of operations and overall financial performance remain uncertain.

*[See Risk Factors for further discussion of the possible impact of the pandemic on our business.](#ib32ef6f531ec46d8a6555201235bf70f_49)*

- Total Digital Media ARR of approximately $10.18 billion as of November 27, 2020 increased by $1.85 billion, or 22%, from $8.33 billion as of November 29, 2019.

- Creative revenue of $7.74 billion increased by $1.25 billion, or 19%, during fiscal 2020, from $6.48 billion in fiscal 2019.

During fiscal 2017, we completed our acquisition of TubeMogul, a publicly held video advertising platform company, for $560.8 million, and integrated it into our Digital Experience reportable segment.

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Overview of 2019

For fiscal 2019, we reported strong financial results consistent with the continued execution of our long-term plans for our two strategic growth areas, Digital Media and Digital Experience, while continuing to market and license a broad portfolio of products and solutions.

On December 1, 2018, the beginning of our fiscal year 2019, we adopted the requirements of the new revenue standard utilizing the modified retrospective method of transition, and began to report our financial results under the new revenue standard.

The impact of the adoption was not significant to our results of operations.

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Document Cloud revenue in fiscal 2019 was $1.22 billion, up from $981.8 million in fiscal 2018 and representing 25% year-over-year revenue growth.

Our Digital Experience business provides comprehensive solutions that include analytics, targeting, media optimization, digital experience management, cross-channel campaign management, marketing automation, audience management, commerce, premium video delivery and monetization.

These comprehensive solutions enable marketers to measure, personalize and optimize marketing campaigns and digital experiences across channels for optimal marketing performance.

During fiscal 2019, our hierarchy of solutions in the Digital Experience segment consisted of the following cloud offerings:

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| • | Adobe Advertising Cloud—delivers an end-to-end platform for managing advertising across traditional TV and digital formats, and simplifies the delivery of video, display and search advertising across channels and screens. |

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| • | Adobe Analytics Cloud—enables businesses to move from insights to actions in real time by uniquely integrating audiences as the core system of intelligence for the enterprise; makes data available across all Adobe clouds through the capture, aggregation, rationalization and understanding of vast amounts of disparate data and then translating that data into singular customer profiles; includes Adobe Analytics and Adobe Audience Manager. |

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| • | Adobe Marketing Cloud—provides an integrated set of solutions to help marketers differentiate their brands and engage their customers, helping businesses manage, personalize, and orchestrate campaigns and customer journeys; includes Adobe Experience Manager (“AEM”), Adobe Campaign, Adobe Target, Marketo Engage and Adobe Primetime. |

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| • | Adobe Commerce Cloud—provides digital commerce, order management and predictive intelligence based on a unified commerce platform enabling shopping experiences across a wide array of industries; includes Magento Commerce. |

Largely contributing to the increase in Digital Experience subscription revenue was revenue associated with Marketo Engage.

To a lesser extent, subscription revenue associated with Magento Commerce and Adobe Experience Manager also contributed to the overall increase.

We expect that continued demand across our portfolio of Adobe Experience Cloud solutions, including new offerings and enhancements to existing solutions, will drive revenue growth in future years.

Prior period results have not been restated which limits the comparability of our results of operations for fiscal 2019 when compared to the year-ago period.

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We may use foreign exchange [removed: purchased options] [added: option contracts] or forward contracts to hedge [added: a portion of] our [added: forecasted] foreign currency [added: denominated] revenue.

Additionally, we hedge our net recognized foreign currency monetary assets and liabilities with foreign exchange forward [removed: contracts.][added: contracts to reduce the risk that our earnings and cash flows will be adversely affected by changes in exchange rates.]

Our significant foreign currency revenue exposures for fiscal [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] were as follows :

As of November [removed: 29, 2019,] [added: 27, 2020,] the total [removed: absolute value] [added: notional amounts] of all outstanding foreign exchange contracts, including options and forwards, was [removed: $1.90] [added: $2.03] billion, which included the notional equivalent of [removed: $927.0] [added: $923] million in Euros, [removed: $431.0] [added: $385] million in [added: Japanese Yen, $321 million in] British Pounds, [removed: $341.3] [added: $212] million in [removed: Japanese Yen] [added: Australian Dollars] and [removed: $201.8] [added: $186] million in other foreign currencies.

As of November [removed: 29, 2019,] [added: 27, 2020,] all contracts were set to expire at various dates through June [removed: 2020.][added: 2021.]

The bank counterparties in these contracts could expose us to credit-related losses that would be largely mitigated with master netting arrangements with the same counterparty by permitting net settlement [added: transactions.]

[removed: In addition, we enter into collateral security agreements that] provide for collateral to be received or posted when the net fair value of these contracts fluctuates from contractually established thresholds.

A sensitivity analysis was performed on all of our foreign exchange derivatives as of November [removed: 29, 2019.][added: 27, 2020.]

A 10% increase in the value of the U.S. Dollar and a corresponding decrease in the value of the hedged foreign currency asset would lead to an increase in the fair value of our financial hedging instruments by [removed: $113.6] [added: $97] million.

Conversely, a 10% decrease in the value of the U.S. Dollar would result in a decrease in the fair value of these financial instruments by [removed: $33.4] [added: $9] million.

As of November [removed: 29, 2019] [added: 27, 2020] and November [removed: 30, 2018,] [added: 29, 2019,] this long-term investment exposure totaled an absolute notional equivalent of [removed: $385.2] [added: $598] million and [removed: $292.3] [added: $385] million, respectively, with the year-over-year increase primarily driven by earnings growth.

We may use foreign exchange purchased options or forward contracts to hedge foreign currency revenue denominated in Euros, British [removed: Pounds and] [added: Pounds,] Japanese [removed: Yen.][added: Yen and Australian Dollars.]

These foreign exchange contracts, carried at fair value, [removed: may] have maturities [removed: between one and] [added: of up to] twelve months.

We record changes in fair value of these cash flow hedges of foreign currency denominated revenue in accumulated other comprehensive income (loss) [added: in our Consolidated Balance Sheets,] until the forecasted transaction occurs.

For the fiscal year ended November [removed: 29, 2019,] [added: 27, 2020,] there were no net gains or losses recognized in revenue relating to hedges of forecasted transactions that did not occur.

These foreign exchange contracts are carried at fair value with changes in fair value of these contracts recorded to [removed: interest and] other income (expense), net in our Consolidated Statements of Income.

At November [removed: 29, 2019,] [added: 27, 2020,] the outstanding balance sheet hedging derivatives had maturities of 180 days or less.

[removed: [*See] [added: *[See] Note 6 of our Notes to Consolidated Financial Statements for information regarding our derivative financial [removed: instruments.*](#s48D05FC2E657524EB1075099749F78E7)][added: instruments.](#ib32ef6f531ec46d8a6555201235bf70f_148)*]

At November [removed: 29, 2019,] [added: 27, 2020,] we had debt securities classified as short-term investments of [removed: $1.53] [added: $1.51] billion.

A sensitivity analysis was performed on our investment portfolio as of November [removed: 29, 2019.][added: 27, 2020.]

The analysis is shown as of November [removed: 29, 2019] [added: 27, 2020] and November [removed: 30, 2018:][added: 29, 2019:]

| *(dollars in millions)* | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | |]

| \-150 BPS | | | | [added: | |] \-100 BPS | | | | [added: | |] \-50 BPS | | | | [added: | |] Fair Value [removed: 11/29/19] [added: 11/27/20] | | | | [added: | |] +50 BPS | | | | [added: | |] +100 BPS | | | | [added: | |] +150 BPS | | |

| \-150 BPS | | | | [added: | |] \-100 BPS | | | | [added: | |] \-50 BPS | | | | [added: | |] Fair Value [removed: 11/30/18] [added: 11/29/19] | | | | [added: | |] +50 BPS | | | | [added: | |] +100 BPS | | | | [added: | |] +150 BPS | | |

As of November [removed: 29, 2019,] [added: 27, 2020,] the total carrying amount of [removed: the] [added: our] Notes was [removed: $1.89] [added: $4.12] billion and the related fair value based on observable market prices in less active markets was [removed: $1.96] [added: $4.48] billion.

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| *(in millions)* | | | 2020 | | | | | | 2019 | | | | | | 2018 | | |

| Euro | | | € | 1,887 | | | | | € | 1,603 | | | | | € | 1,310 | |

| Japanese Yen | | | ¥ | 88,640 | | | | | ¥ | 73,158 | | | | | ¥ | 60,791 | |

| British Pounds | | | £ | 562 | | | | | £ | 503 | | | | | £ | 423 | |

| Australian Dollars | | | $ | 645 | | | | | $ | 538 | | | | | $ | 441 | |

In addition, we enter into collateral security agreements that

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| $ | 1,521 | | | | | $ | 1,520 | | | | | $ | 1,519 | | | | | $ | 1,514 | | | | | $ | 1,507 | | | | | $ | 1,500 | | | | | $ | 1,493 | |

| $ | 1,545 | | | | | $ | 1,539 | | | | | $ | 1,533 | | | | | $ | 1,527 | | | | | $ | 1,521 | | | | | $ | 1,515 | | | | | $ | 1,509 | |

Following our debt refinancing in February 2020, our outstanding Notes have fixed interest rates.

*[See Note 17 of our Notes to Consolidated Financial Statements for information regarding our senior notes.](#ib32ef6f531ec46d8a6555201235bf70f_193)*

We hedge these exposures to reduce the risk that our earnings and cash flows will be adversely affected by changes in exchange rates.

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| *(in millions, except Japanese Yen)* | 2019 | | | | 2018 | | | | 2017 | | |

| Euro | € | 1,603.2 | | | € | 1,309.9 | | | € | 1,044.7 | |

| Japanese Yen (in billions) | ¥ | 73.2 | | | ¥ | 60.8 | | | ¥ | 51.0 | |

| British Pounds | £ | 503.3 | | | £ | 423.1 | | | £ | 338.4 | |

transactions.

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| $ | 1,544.8 | | | $ | 1,538.8 | | | $ | 1,532.8 | | | $ | 1,526.8 | | | $ | 1,520.7 | | | $ | 1,514.7 | | | $ | 1,508.7 | |

| $ | 1,617.5 | | | $ | 1,607.1 | | | $ | 1,596.6 | | | $ | 1,586.2 | | | $ | 1,575.7 | | | $ | 1,565.3 | | | $ | 1,554.8 | |

*Term Loan*

As of November 29, 2019, our Term Loan’s carrying value was $2.25 billion.

At our election, the Term Loan will bear interest at either (i) LIBOR plus a margin, based on our debt ratings, ranging from 0.500% to 1.000% or (ii) a base rate plus a margin, based on our debt ratings, ranging from 0.040% to 0.110%.

Interest is payable periodically, in arrears, at the end of each interest period we elect.

An immediate hypothetical 50 basis points increase or decrease in market interest rates would not have a significant impact on our results of operations.

As of November 29, 2019, the amount outstanding under our Notes was $1.9 billion.

In June 2014, we entered into interest rate swaps that effectively converted the fixed interest rate on our 2020 Notes to a floating interest rate based on LIBOR plus a fixed number of basis points through February 1, 2020.

Accordingly, our exposure to fluctuations in market interest rates is on the hedged fixed-rate debt of $900 million.

An immediate hypothetical 50 basis points increase or decrease in market interest rates would not have a significant impact on our results of operations.

*Cash Flow Hedges of Interest Rate Risk*

In June 2019, in anticipation of refinancing our $2.25 billion Term Loan due April 30, 2020 and $900 million notes payable due February 1, 2020, we entered into Treasury lock agreements with large financial institutions which fixed benchmark U.S. Treasury rates for an aggregate notional amount of $1 billion of our future debt issuance.

These derivative instruments hedge the impact of changes in the benchmark interest rate to future interest payments and will be terminated upon closing of our anticipated refinancing.

We record changes in the fair value of these cash flow hedges of interest rate risk in accumulated other comprehensive income (loss) until the anticipated refinancing.

Upon refinancing and termination of the derivative instruments, their fair value will be amortized over the term of our new debt to interest expense.

We offer a line of products and services used by creative [removed: professionals, marketers, knowledge workers,] [added: professionals including photographers, video editors, designers and developers; communicators including content creators,] students, [removed: application developers, enterprises] [added: marketers] and [added: knowledge workers; businesses of all sizes; and] consumers for creating, managing, delivering, measuring, optimizing, engaging and transacting with compelling content and experiences across personal computers, devices and media.

We have operations in the [removed: Americas,] [added: Americas;] Europe, Middle East and Africa [removed: (“EMEA”),] [added: (“EMEA”);] and Asia-Pacific (“APAC”).

We help our customers create and deliver the most compelling experiences in [removed: a] streamlined [removed: workflow] [added: workflows] and optimize those experiences for greater return on investment.

Digital Media – providing products, services and solutions that enable individuals, teams and enterprises to create, publish and promote their content [removed: anywhere.][added: anywhere and accelerate their productivity by modernizing how they view, share and engage with documents and creative content.]

Our customers include creative professionals like photographers, video editors, graphic and experience designers, and [removed: application] [added: app] and game developers; communicators like content creators, students, marketers and knowledge workers who create, collaborate on and distribute documents and creative content; and consumers.

[removed: This is the core of what we have delivered for decades, and we have evolved our business model to provide our customers with a range of] flexible solutions that allow them to reach their full creative potential anytime, anywhere, on any [removed: device] [added: device, and] on projects of all types.

Digital Experience – providing a comprehensive and integrated platform and set of applications and services through Adobe Experience Cloud that [removed: enables businesses and] [added: enable] brands [added: and businesses of all sizes] to create, manage, execute, measure, monetize and optimize customer [added: experiences that span from analytics to commerce.]

Underpinning Adobe Experience Cloud is our Adobe Experience Platform, which provides businesses and brands with an open and extensible platform for customer experience management [removed: with] [added: that transforms customer data into] real-time [added: robust] customer profiles [removed: that enable deep customer insights] and [added: uses insights driven by artificial intelligence (“AI”) to enable] the delivery of personalized digital experiences in milliseconds.

We believe we are uniquely positioned to be a leader in both the Digital Media and Digital Experience markets, where our mission [removed: is] to change the world through digital [removed: experiences.][added: experiences has never been more relevant, as people seek new ways to communicate, learn and conduct business virtually.]

Our business is organized into three reportable segments: Digital Media, Digital Experience and [removed: Publishing.][added: Publishing and Advertising.]

Our segments are aligned around our two strategic growth opportunities [added: further] described [removed: above,] [added: below,] placing our Publishing [added: and Advertising] business in a third segment that contains some of our [removed: mature] [added: legacy] products and solutions.

This overview provides an explanation of our markets and a discussion of strategic opportunities in fiscal [removed: 2020] [added: 2021] and beyond for each of our segments.

Everyone has a story to tell — from creative professionals, to [removed: students and knowledge workers,] [added: communicators,] to [removed: immersive content and experience designers] [added: consumers] — and [added: with content creation and consumption exploding across every type of device,] they need [added: the tools] to tell those stories on an ever-increasing number of canvasses.

Creative Cloud members can download and access the latest versions of our creative products such as Photoshop, Illustrator, [added: Adobe] Premiere Pro, Lightroom, InDesign, Adobe XD and many more creative applications.

To expand our reach and improve the way we serve the needs of our customers, we create different combinations of these services, including our applications with free and paid tiers such as Adobe [removed: Lightroom Mobile] [added: XD and Adobe Fresco,] that have brought new customers into our [removed: franchise and increased our footprint on mobile devices.][added: franchise.]

Adobe continues to redefine the creative process with [removed: Adobe] Creative Cloud so that our customers can obtain everything they need to create, collaborate and be inspired.

Adobe Sensei leverages Adobe’s massive content and data assets, as well as its deep domain expertise in the creative, marketing and document segments, within a unified [removed: artificial intelligence (“AI”)] [added: AI] and machine learning framework to help customers discover hidden opportunities, reduce tedious processes and offer relevant experiences to every customer.

[removed: Adobe] Creative Cloud addresses the needs of creative professionals such as artists, designers, developers, students and administrators, as well as knowledge workers, marketers, educators, [removed: hobbyists] [added: hobbyists, communicators] and consumers, [removed: who also] [added: all of whom] use our products to create and deliver content.

Our customers rely on our products for content creation, design, video and animation production, mobile app and gaming [removed: development] [added: development,] and document creation and collaboration.

Moreover, our creative products are used to create much of the printed and online information people see, read and [removed: interact with every day, including video, animation, mobile and advertising content.]

We have introduced new products, features and services to address emerging categories of content [removed: creation across devices and platforms,] [added: creation,] such as voice-based prototyping, refined content creation tools, 3D, augmented [removed: reality,] [added: reality (“AR”),] virtual reality and user experience [removed: design.][added: design across devices and platforms.]

Adobe’s Digital Media segment includes our [removed: Adobe] Document Cloud business, built around our Acrobat family of [removed: products, including Adobe Acrobat and Adobe Acrobat Reader,] [added: products] and a [removed: set of integrated,] [added: unified,] cloud-based document [removed: services, including] [added: services platform, which includes Acrobat,] Adobe Sign and Adobe Scan.

Across industries and across the world, business processes from contracting to invoicing to employee onboarding are making the change from paper to [removed: electronic documents.][added: digital documents, a trend that has accelerated as businesses of all sizes shifted to remote work as a result of the pandemic.]

For over 25 years, Acrobat has provided for the reliable creation and exchange of [removed: electronic] [added: digital] documents, regardless of platform or application source type.

Users can collaborate on documents with [removed: electronic] comments and tailor the security of a file in order to distribute reliable Adobe PDF documents that can be viewed, printed or filled out utilizing our free Acrobat Reader [added: app] on any device.

Acrobat provides essential [removed: electronic] [added: digital] document capabilities and services across desktop, mobile devices and the web to help knowledge workers [added: and communicators] accomplish a wide variety of tasks ranging from simple publications and forms to mission-critical engineering documentation and architectural plans.

With our Acrobat product [added: family] and its innovative cloud services, we have extended the capabilities of our [added: Sensei-powered] document [removed: solutions,] [added: actions,] from view and create, to edit, secure, scan, review, embed, share and sign.

Users can create a PDF with just the camera on their phone with Adobe Scan, [added: easily read and] edit PDFs on [removed: the go] [added: tablets and mobile devices] with [added: the] Acrobat [added: Reader app] on iOS and Android, and turn slow, manual signing processes into automated experiences [removed: and collect] [added: by collecting] signatures with Adobe Sign.

Our goal is to be the leading platform for creativity where we offer a range of products and services that allow individuals, [removed: teams] [added: small] and [removed: enterprises,] [added: medium businesses, enterprises] and [added: government institutions, and] both professionals and enthusiasts, to design and deliver amazing digital content.

We believe there is significant opportunity for growth across all customer segments and expect Adobe Creative Cloud will drive sustained long-term revenue growth through a continued expansion of our customer base by using our products to enable everyone to create and tell their [removed: stories,] [added: stories on a variety of surfaces and platforms,] expanding into new categories and technologies like immersive 3D and [removed: augmented reality,] [added: AR,] making the creative process more [removed: productive] [added: iterative and collaborative] with [added: seamless] cloud-enabled collaboration and workflows, delivering intelligent, time-saving features with Adobe Sensei’s artificial intelligence and machine learning capabilities, and acquiring new users by engaging with the creative [removed: community.][added: community with live tutorials and our social communities like Behance.]

We will continue to deepen our relationship with existing users through [added: data-driven customer engagement,] meeting their needs holistically and delivering additional features and increased value, [removed: including through data-driven customer engagement,] [added: by offering products and features powered by] AI and machine learning through Adobe [removed: Sensei, and offering a true “multi-surface platform” that provides our customers with the ability to use our tools for creation wherever inspiration strikes, by enabling them to seamlessly access their assets in the cloud and work across mobile, tablet and desktop with new applications like Adobe Fresco and Photoshop for iPad.][added: Sensei.]

We are embracing new frontiers in technology and creativity such as immersive 3D and [removed: augmented reality (“AR”)] [added: AR] experiences with Adobe Aero and our Substance suite of products.

We are pursuing new ways to [added: engage and inspire our community and] help our customers develop creative skills such as allowing creators to live-stream their creative process on Behance [added: directly from native Creative Cloud applications] and allowing users to learn with step-by-step, in-app, interactive tutorials from experienced creators.

As appropriate, we plan to optimize our pricing strategy and move our customers to [removed: higher priced] [added: higher-priced] and [removed: better value] [added: better-value] offerings and continue to employ targeted promotions that attract past customers and potential users to try out and ultimately subscribe to Adobe Creative Cloud.

[removed: We] [added: With our Adobe Stock and Adobe Fonts services, we] offer [removed: a marketplace] [added: marketplaces that are built into our Creative Cloud products] for Creative Cloud subscribers to [removed: enable the delivery and] purchase [removed: of] stock content [removed: in our Adobe Stock service.][added: and fonts.]

Overall, our strategy with Creative Cloud is designed to enable us to increase our revenue with users, attract more new [removed: customers] [added: customers,] and grow a recurring and predictable revenue stream that is recognized ratably.

As part of our [removed: Adobe] Creative Cloud strategy, we utilize a data-driven operating model and our Adobe Experience Cloud solutions to drive and optimize customer awareness, engagement and licensing of our creative products and services at every stop of the customer journey through our website and across other channels.

Adobe.com is [removed: increasingly becoming] the [added: central] destination [removed: site] where we engage individual and small business customers to sign up for and renew Creative Cloud subscriptions.

We offer free apps and [removed: trials] [added: trials, as well as our mobile and tablet apps,] to attract new customers and [removed: through a] [added: use our] data-driven [removed: model, we] [added: operating model to] optimize conversion of these [removed: trialists] [added: customers] to paid subscribers.

We offer many of the products included in [removed: Adobe] Creative Cloud on a standalone basis, including subscriptions to the Creative Cloud version of certain point products.

This is the core of what we have delivered for decades, and we have evolved our business model to provide our customers with a range of

In the fourth quarter of fiscal 2020, we moved our Adobe Advertising Cloud offerings from our Digital Experience segment into our Publishing and Advertising segment in order to more closely align our Digital Experience business with our strategic growth priorities.

interact with every day, including video, animation, mobile and advertising content.

Digital content creation has transcended the desktop and so we continue to expand our footprint on tablets and mobile devices with touch-first and stylus-first apps like Photoshop for iPad, Illustrator for iPad, Adobe Fresco, Adobe Spark, Adobe Aero, Premiere Rush, Photoshop Express and Photoshop Camera.

New projects announced and solutions offered include Illustrator on iPad and Adobe Fresco on iPhone, both of which will enable a seamless content creation experience across devices and help us continue to attract a tablet- and mobile-centric audience.

Digital documents have a mission-critical role in powering modern businesses with tens of millions of communicators worldwide interacting with documents every day.

Cloud services and mobile devices are reshaping how we work, enabling greater flexibility and collaboration across global, dispersed teams.

We continue to develop more applications and features like Creative Cloud Libraries that enable collaboration and allow our customers to seamlessly share and access their assets in the cloud.

With solutions like

Adobe Fresco for iPhone, Illustrator for iPad, and “Liquid Mode”, a breakthrough reading experience for PDFs on Acrobat for mobile devices, our customers can use our tools wherever inspiration strikes, whether on mobile, tablet, desktop or web.

Our collaboration services also help us expand our universe of business customers beyond creative professionals, as other stakeholders use our products for review purposes, copywriting or leveraging templates for social media marketing.

As digital documents and processes become central to business continuity in today’s remote work environment, the paper-to-digital transformation is accelerating and we’re accelerating document productivity in turn with Adobe Document Cloud, enabling individuals and businesses to operate successfully.

Acrobat Reader on mobile devices can be used to create, edit, export, combine, collaborate on and share PDFs on the go and the new “Liquid Mode” feature automatically reformats text, images and tables for quick navigation and consumption on smaller screens.

capabilities in the pocket of every person with a mobile device.

We continue to believe that addressing the challenges of customer experience management is a large and growing opportunity and we are in position to help our customers digitally transform their businesses.

Our solutions deliver real-time customer profiles and intelligence across the customer journey.

Adobe Analytics provides an experience system of intelligence for real-time cross-channel data, insights and activations across every channel.

Adobe Audience Manager, our data management platform, helps digital publishers build unique audience profiles to identify the most valuable segments and use them across any digital

channel.

Adobe Experience Platform ingests, processes and stitches data across sources, channels and customer interactions in real time to create robust unified customer profiles.

Adobe’s Real-time Customer Data Platform service, built on Adobe Experience Platform, delivers real-time personalization at scale to enable brands to bring together known and unknown customer data to activate customer profiles across channels and leverage intelligent decision making throughout the customer journey.

- *Content and commerce*.

We offer solutions to help customers manage, deliver, test, target and optimize content delivery and enable shopping experiences that scale from mid-market to enterprise businesses.

Our leading digital experience management solution, Adobe Experience Manager, helps customers organize, create, manage and deliver creative assets and other content across digital marketing channels, including web, mobile, email, communities and video, enabling customers to improve their market and brand perception and provide a personalized experience to their consumers.

- *Customer journey management*.

Our solutions help businesses manage, personalize and orchestrate campaigns and customer journeys across B2E use cases.

- *Work management*.

Our work management solution is powered by Workfront, a leading work management platform for marketers.

Workfront helps customers orchestrate content creation and campaign workflows across marketing and creative teams.

Adobe acquired Workfront, Inc. on December 7, 2020 and began integrating its work management platform into the Adobe Experience Cloud.

Workfront is a configurable cloud platform for enterprise work management that gives teams one central platform to share ideas, create content and manage complex processes.

During the second quarter of fiscal 2020, we began to discontinue our transaction-driven Advertising Cloud offerings, allowing us to focus our investment on strategic growth initiatives.

We continue to offer our Advertising Cloud software solutions, but they are not expected to be areas of revenue growth.

In the fourth quarter of fiscal 2020, we moved our Advertising Cloud offerings from our Digital Experience segment into our Publishing and Advertising segment, in order to more closely align our Digital Experience business with the strategic growth opportunity.

This open architecture offers scalability with a wide variety of supporting products and

Publishing and Advertising

Our software also faces competition from free or low-cost storage and synchronization products that encourage consumers to use their integrated image and video editing solutions.

We believe competitive factors in our markets include the proven performance, security, scalability, flexibility and reliability of services;

Publishing and Advertising

Our Advertising Cloud offerings face competition from other advertising platforms and networks, including Google, Facebook and The Trade Desk.

experiences that span from advertising to commerce.

New projects announced and solutions offered include: Substance, a suite of applications for creating, mixing and applying textures and materials for 3D creations; Adobe Fresco, a mobile drawing and painting application, featuring live brushes that mimic natural media like oil paint and watercolors in amazingly lifelike ways; Adobe Aero, a free iOS application for viewing, building and sharing immersive and interactive augmented reality experiences; Photoshop Camera, an AI-driven mobile camera application launching in 2020 powered by Adobe Sensei featuring unique Photoshop lenses and camera effects right inside the camera; and both Illustrator on iPad, which will be available in 2020, and Photoshop on iPad to enable a seamless content creation experience across devices and attract a new, mobile-centric audience.

Tens of millions of knowledge workers worldwide interact with documents daily.

Cloud services and mobile devices are reshaping how we work in ways that are more ad hoc, collaborative, unstructured and on the go.

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Publishing

In fiscal 2019, we maintained a relatively consistent annual revenue run-rate with the mature products we market and license in our Publishing business.

Online storage and synchronization are becoming free and ubiquitous.

Consumers will be encouraged to use the image and video editing software offered by those storage products, thus competing with our software.

Publishing

We also offer Photoshop Elements, which is targeted at consumers who desire the brand and power of Photoshop through an easy-to-use interface.

Users can also utilize mobile apps such as Illustrator Draw to gain access to Illustrator capabilities on their tablets and mobile devices, and seamlessly sync their work across apps and devices through Adobe CreativeSync technology, including for use with Illustrator on their desktop.

Illustrator will also be available on iPad starting in 2020.

From

Users can

On January 23, 2019, Adobe acquired Allegorithmic, a privately held 3D editing and authoring software company for gaming and entertainment, and began integrating it into Adobe Creative Cloud as Substance by Adobe.

Office software, graphics applications and more.

are customized to their needs.

*Magento Commerce*

Magento Commerce also

Advertising

Adobe Advertising Cloud is an end-to-end, independent platform for managing advertising that unifies and automates all media, screens, data and creativity at scale.

With Adobe Advertising Cloud and its use of Adobe Sensei AI and data integrations, customers can identify and amplify their high-value audiences for more personal and accurate targeting; seamlessly unite creative, data and media buying across all screens and formats; protect their brand by preventing their campaigns from mixing with content and properties that do not align with their image; scale bidding and optimization strategies; implement programmatic creative management using automated advertisement creation for both prospecting and retargeting customers; generate advertisements at scale using Adobe Creative Cloud apps; and use data insights that reveal customers’ interests and past behaviors to create relevant, targeted ads.

Adobe Advertising Cloud includes Adobe Advertising Cloud Demand Side Platform, Adobe Advertising Cloud Search, Adobe Advertising Cloud TV and Adobe Advertising Cloud Creative offerings.

Adobe Advertising Cloud DSP is the first independent, omnichannel demand-side platform that brings cross-screen and cross-channel integrations for planning, buying, measurement and optimization and supports all forms of TV (linear, addressable and connected), video, display, native, audio, social and search campaigns.

It builds identities, finds optimal mixes to reach audiences and manages tactics that span multiple sites simultaneously, effortlessly and nearly instantly.

Adobe Advertising Cloud Search brings customers the most comprehensive search management through the automation of search, shopping and retargeting campaigns by offering model transparency and accuracy reports that give insight into actual performance rather than just forecasts for clicks, cost and revenue.

With intuitive navigation and time-saving workflows, it delivers powerful, real-time integration with

Adobe Analytics, Adobe Audience Manager and Adobe Campaign and connects users’ data, audience segments and other marketing channels to get a bird’s-eye view of their performance.

Adobe Advertising Cloud TV uses data and automation to help customers make smarter TV buying decisions, deliver precision against their audiences and increase the impact of their TV advertising with access to over 30,000 audience data attributes.

As part of the Adobe Advertising Cloud DSP, Adobe Advertising Cloud Creative uniquely brings together designers and marketing professionals in a self-serve, intuitive interface with direct integration with Adobe Creative Cloud apps that enhances collaboration between customers’ ad production and media teams and enables users to automatically create thousands of ads at scale.

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We consider all claims on a quarterly basis in accordance with GAAP and, based on known facts, assess whether potential losses are considered reasonably [removed: possible,] [added: possible or] probable and estimable.

This determination is then reviewed and discussed with the Audit Committee of the Board of [removed: Directors and our independent registered public accounting firm.][added: Directors.]

[removed: FORM 10-K][added: FORM 10-K]

| ☒ | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year [removed: ended November 29, 2019][added: ended November 27, 2020]

| ☐ | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

Commission File [removed: Number: 0-15175][added: Number: 0-15175]

| Delaware | [added: | |] 77-0019522 | [added: | |]

| (State or other jurisdiction of incorporation or organization) | [added: | |] (I.R.S. Employer Identification No.) | [added: | |]

345 Park [removed: Avenue, San Jose, California 95110-2704][added: Avenue, San Jose, California 95110-2704]

[removed: (408) 536-6000][added: (408) 536-6000]

| Title of Each Class | [added: | |] Trading Symbol | [added: | |] Name of Each Exchange on Which Registered | [added: | |]

| Common Stock, $0.0001 par value per share | [added: | |] ADBE | [added: | |] NASDAQ | [added: | |]

| Large accelerated filer | [added: | |] ☒ | | [added: | | | |] Accelerated filer | [added: | |] ☐ | | [added: | | | |] Non-accelerated filer | [added: | |] ☐ | | [added: | | | |] Smaller reporting company | [added: | |] ☐ | | [added: | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

The aggregate market value of the registrant’s common stock, $0.0001 par value per share, held by non-affiliates of the registrant on May [removed: 31, 2019,] [added: 29, 2020,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $102.25] [added: $143.27] billion (based on the closing sales price of the registrant’s common stock on that date).

As of January [removed: 10, 2020, 482,130,975] [added: 8, 2021, 478.7 million] shares of the registrant’s common stock, $0.0001 par value per share, were issued and outstanding.

Portions of the Proxy Statement for the registrant’s [removed: 2020] [added: 2021] Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the end of the fiscal year ended November [removed: 29, 2019,] [added: 27, 2020,] are incorporated by reference in Part III hereof.

| | | [added: | | | |] Page No. | [added: | |]

| PART I | | | [added: | | | | | |]

| Item 1. | [removed: [Business](#sE45DA874AF3A5E41A6B8C5CF7FF0E2A5)] | [removed: [3](#sE45DA874AF3A5E41A6B8C5CF7FF0E2A5)] | [added: [Business](#ib32ef6f531ec46d8a6555201235bf70f_13) | | | [3](#ib32ef6f531ec46d8a6555201235bf70f_13) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#sECBD039767435874B10088C5736A9648)] [added: Factors](#ib32ef6f531ec46d8a6555201235bf70f_49)] | [removed: [22](#sECBD039767435874B10088C5736A9648)] | [added: | [24](#ib32ef6f531ec46d8a6555201235bf70f_49) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#s3ED32455B90F5AF0A3AF635F2B6910B4)] [added: Comments](#ib32ef6f531ec46d8a6555201235bf70f_52)] | [removed: [34](#s3ED32455B90F5AF0A3AF635F2B6910B4)] | [added: | [38](#ib32ef6f531ec46d8a6555201235bf70f_52) | | |]

| Item 2. | [removed: [Properties](#sA43D2A1FC2AC512FAC5247B16964B800)] | [removed: [34](#sA43D2A1FC2AC512FAC5247B16964B800)] | [added: [Properties](#ib32ef6f531ec46d8a6555201235bf70f_55) | | | [38](#ib32ef6f531ec46d8a6555201235bf70f_55) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#sBDF642018A1C5B228C4F156504AFBEED)] [added: Proceedings](#ib32ef6f531ec46d8a6555201235bf70f_58)] | [removed: [35](#sBDF642018A1C5B228C4F156504AFBEED)] | [added: | [39](#ib32ef6f531ec46d8a6555201235bf70f_58) | | |]

| Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#s51D0710CB29F571A84D0CE49046F4617)] [added: Disclosures](#ib32ef6f531ec46d8a6555201235bf70f_61)] | [removed: [35](#s51D0710CB29F571A84D0CE49046F4617)] | [added: | [39](#ib32ef6f531ec46d8a6555201235bf70f_61) | | |]

| PART II | | | [added: | | | | | |]

| Item 5. | [added: | |] [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#sEE6A9CD1F7AA5FA79479D0AE798A9429)] [added: Securities](#ib32ef6f531ec46d8a6555201235bf70f_67)] | [removed: [36](#sEE6A9CD1F7AA5FA79479D0AE798A9429)] | [added: | [40](#ib32ef6f531ec46d8a6555201235bf70f_67) | | |]

| Item 6 | [added: | |] [Selected Financial [removed: Data](#s773B8FFF0C1357C7A23357ED163FEE9A)] [added: Data](#ib32ef6f531ec46d8a6555201235bf70f_70)] | [removed: [37](#s773B8FFF0C1357C7A23357ED163FEE9A)] | [added: | [41](#ib32ef6f531ec46d8a6555201235bf70f_70) | | |]

| Item 7. | [added: | |] [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s4EB42C13DE495C1AA4354BCC1E5F67A8)] [added: Operations](#ib32ef6f531ec46d8a6555201235bf70f_73)] | [removed: [38](#s4EB42C13DE495C1AA4354BCC1E5F67A8)] | [added: | [42](#ib32ef6f531ec46d8a6555201235bf70f_73) | | |]

| Item 7A. | [added: | |] [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sE8057815BB7E593ABCCBAC938FBF708F)] [added: Risk](#ib32ef6f531ec46d8a6555201235bf70f_106)] | [removed: [53](#sE8057815BB7E593ABCCBAC938FBF708F)] | [added: | [58](#ib32ef6f531ec46d8a6555201235bf70f_106) | | |]

| Item 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#sE19A1192B2AB5F619287CAA8F783CC13)] [added: Data](#ib32ef6f531ec46d8a6555201235bf70f_109)] | [removed: [56](#sE19A1192B2AB5F619287CAA8F783CC13)] | [added: | [61](#ib32ef6f531ec46d8a6555201235bf70f_109) | | |]

| Item 9. | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s073FE218EA6757CEBAAB2B8B4F35B2D7)] [added: Disclosure](#ib32ef6f531ec46d8a6555201235bf70f_208)] | [removed: [106](#s073FE218EA6757CEBAAB2B8B4F35B2D7)] | [added: | [110](#ib32ef6f531ec46d8a6555201235bf70f_208) | | |]

| Item 9A. | [added: | |] [Controls and [removed: Procedures](#sA7522E6A989E54568340C5E87852DAF4)] [added: Procedures](#ib32ef6f531ec46d8a6555201235bf70f_211)] | [removed: [106](#sA7522E6A989E54568340C5E87852DAF4)] | [added: | [110](#ib32ef6f531ec46d8a6555201235bf70f_211) | | |]

| Item 9B. | [added: | |] [Other [removed: Information](#sF0606E8CE335559E995BACB48A52591E)] [added: Information](#ib32ef6f531ec46d8a6555201235bf70f_214)] | [removed: [106](#sF0606E8CE335559E995BACB48A52591E)] | [added: | [110](#ib32ef6f531ec46d8a6555201235bf70f_214) | | |]

| PART III | | | [added: | | | | | |]

| Item 10. | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s16E2B6BF9F465B45B05A6C2F4CFD5C00)] [added: Governance](#ib32ef6f531ec46d8a6555201235bf70f_220)] | [removed: [106](#s16E2B6BF9F465B45B05A6C2F4CFD5C00)] | [added: | [111](#ib32ef6f531ec46d8a6555201235bf70f_220) | | |]

| Item 11. | [added: | |] [Executive [removed: Compensation](#sFA47EDC7650E5D6CA3681BE525C35983)] [added: Compensation](#ib32ef6f531ec46d8a6555201235bf70f_223)] | [removed: [106](#sFA47EDC7650E5D6CA3681BE525C35983)] | [added: | [111](#ib32ef6f531ec46d8a6555201235bf70f_223) | | |]

| Item 12. | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#sD26D82F7D69E5E42AE1B530B021F4E5E)] [added: Matters](#ib32ef6f531ec46d8a6555201235bf70f_226)] | [removed: [107](#sD26D82F7D69E5E42AE1B530B021F4E5E)] | [added: | [111](#ib32ef6f531ec46d8a6555201235bf70f_226) | | |]

| Item 13. | [added: | |] [Certain Relationships and Related Transactions, and Director [removed: Independence](#sDB9B897084C655EBB78C18B2C8BC021D)] [added: Independence](#ib32ef6f531ec46d8a6555201235bf70f_229)] | [removed: [107](#sDB9B897084C655EBB78C18B2C8BC021D)] | [added: | [111](#ib32ef6f531ec46d8a6555201235bf70f_229) | | |]

| Item 14. | [added: | |] [Principal Accounting Fees and [removed: Services](#sE08DD11B1074525AAEEC509C2274FBAB)] [added: Services](#ib32ef6f531ec46d8a6555201235bf70f_232)] | [removed: [107](#sE08DD11B1074525AAEEC509C2274FBAB)] | [added: | [111](#ib32ef6f531ec46d8a6555201235bf70f_232) | | |]

| PART IV | | | [added: | | | | | |]

| Item 15. | [added: | |] [Exhibits, Financial Statement [removed: Schedules](#sB293AFB332FD5D1C8440EC1A02785AD5)] [added: Schedules](#ib32ef6f531ec46d8a6555201235bf70f_238)] | [removed: [107](#sB293AFB332FD5D1C8440EC1A02785AD5)] | [added: | [111](#ib32ef6f531ec46d8a6555201235bf70f_238) | | |]

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| [Signatures](#ib32ef6f531ec46d8a6555201235bf70f_247) | | | | | | [115](#ib32ef6f531ec46d8a6555201235bf70f_247) | | |

| [Summary of Trademarks](#ib32ef6f531ec46d8a6555201235bf70f_250) | | | | | | [117](#ib32ef6f531ec46d8a6555201235bf70f_250) | | |

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| [Signatures](#s6C8B2B7E987A506B85C4453309DB99B7) | | [111](#s6C8B2B7E987A506B85C4453309DB99B7) |

| [Summary of Trademarks](#sCCDABE66E956569F89740478A673DA71) | | [113](#sCCDABE66E956569F89740478A673DA71) |

Our corporate headquarters is located in San Jose, California where we occupy approximately 1.1 million square feet of office space.

We own a substantial portion of our San Jose, California properties which we use for research, product development, sales, marketing, and administrative purposes.

We own and lease properties in various locations throughout the United States which we also use for research, product development, sales, marketing, and administrative purposes, and data centers.

Outside of the United States, we own and lease properties throughout EMEA and APAC for research, product development, sales, and administrative purposes.

The largest properties we occupy outside of the United States are the Bangalore, India and Noida, India offices which are approximately 0.4 million and 0.6 million square feet, respectively.

We own and lease these properties in India.

Additionally, we have ongoing building construction in San Jose, California and Bangalore, India which are currently targeted for completion in fiscal 2023.

Beginning in March 2020, our employees across all geographic regions have shifted to working from home due to the pandemic.

Our focus remains on promoting employee health and safety as we carefully evaluate reopening plans and timelines.

As of November 27, 2020, we have not terminated any significant lease arrangements.

We believe our facilities, with an average overall operating capacity of approximately 89% prior to our shift to working from home, are suitable for the conduct of our business should we decide to reopen our facilities in the next twelve months.

*See Note 18 of Part II, Item 8 titled “Notes to Consolidated Financial Statements” for further information regarding our lease obligations.*

The following table sets forth the location, approximate square footage and use of our material properties during fiscal 2019:

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| Location | Owned / Leased | Approximate Square Footage | | | Use |

| *Americas:* | | | | | |

| San Jose, California | Owned & leased | 1,081,000 | | (1) | Research, product development, sales, marketing and administration |

| San Francisco, California | Owned & leased | 657,000 | | (2) | Research, product development, sales, marketing and administration |

| *APAC:* | | | | | |

| Bangalore, India | Owned & leased | 422,000 | | (3) | Research, product development, sales and administration |

| Noida, India | Owned & leased | 554,000 | | (4) | Research, product development, sales and administration |

| *EMEA:* | | | | | |

| Greater London Area, United Kingdom | Leased | 92,000 | | | Product development, sales, marketing and administration |

_________________________________________

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| (1) | We own approximately 989,000 square feet of our San Jose properties where our headquarters is located. |

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| (2) | We own approximately 346,000 square feet of our San Francisco properties |

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| (3) | We own approximately 250,000 square feet of our Bangalore properties. |

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| (4) | We own our Noida properties except for a land lease for one of our buildings. The term for the land lease is until 2091. |

We lease or sublease the properties we occupy under operating leases.

Such leases expire at various times through 2031, with the exception of our ground lease in Noida.

In general, all facilities are in good condition, suitable for the conduct of our business and are operating at an average capacity of approximately 95%.

According to the records of our transfer agent, there were [removed: 993] [added: 974] holders of record of our common stock on January [removed: 10, 2020.][added: 8, 2021.]

Below is a summary of stock repurchases for the three months ended November [removed: 29, 2019.][added: 27, 2020.]

[removed: [*See] [added: *[See] Note 14 of our Notes to Consolidated Financial Statements for information regarding our stock repurchase [removed: programs.*](#sC0E9A77D12685B118BFADE23B956A302)][added: programs.](#ib32ef6f531ec46d8a6555201235bf70f_184)*]

| Period | | [added: | | | |] Total Number of [removed: Shares Repurchased] [added: Shares Repurchased] | | | [removed: Average Price Paid Per Share] | | | [added: Average Price Paid Per Share] | [removed: Total Number of Shares Purchased as] [added: | | | | | Total Number of Shares Purchased as] Part [removed: of Publicly Announced Plans] [added: of Publicly Announced Plans] | | | [added: | | |] Approximate Dollar Value that May Yet be Purchased Under the [removed: Plan(1)] [added: Plans] | | | | [added: | |]

| | | [added: | | | |] (in [removed: thousands,] [added: millions,] except average price per share) | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Beginning repurchase [removed: authority] [added: authority(1)] | | | | | | | | | | | | [added: | | | | | | | | | | | |] $ | [removed: 6,100,054] [added: 3,066] | | | [added: | |]

| August [removed: 31] [added: 29] — September [removed: 27, 2019] [added: 25, 2020] | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| September [removed: 28] [added: 26] — October [removed: 25, 2019] [added: 23, 2020] | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| October [removed: 26] [added: 24] — November [removed: 29, 2019] [added: 27, 2020] | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

[removed: | (1) | In] [added: (1)In] May 2018, the Board of Directors granted authority to repurchase up to $8 billion in common stock through the end of fiscal 2021. [removed: |]

[removed: | (2) | In] [added: (2)In] September [removed: 2019,] [added: 2020,] we entered into a structured stock repurchase agreement with a large financial institution whereupon we provided them with a prepayment of [removed: $750] [added: $850] million. [removed: As of November 29, 2019, approximately $229.2 million of the prepayment remained under this agreement. |]

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| Shares repurchased | | | | | | 0.3 | | | | | | $ | 490.89 | | | | | 0.3 | | | | | | $ | (167) | | | | |

| Shares repurchased | | | | | | 0.7 | | | | | | $ | 484.50 | | | | | 0.7 | | | | | | $ | (311) | | (2) | | |

| Shares repurchased | | | | | | 0.6 | | | | | | $ | 471.53 | | | | | 0.6 | | | | | | $ | (283) | | (2) | | |

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| Total | | | | | | 1.6 | | | | | | | | | | | | 1.6 | | | | | | $ | 2,305 | | | | |

As of November 27, 2020, approximately $255 million of the prepayment remained under this agreement.

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| Shares repurchased | | 885 | | | $ | 282.43 | | | 885 | | | $ | (250,054 | ) | |

| Shares repurchased | | 927 | | | $ | 274.12 | | | 927 | | | $ | (254,032 | ) | (2) |

| Shares repurchased | | 954 | | | $ | 279.52 | | | 954 | | | $ | (266,779 | ) | (2) |

| Total | | 2,766 | | | | | | | 2,766 | | | $ | 5,329,189 | | |

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| *(in [removed: thousands,] [added: millions,] except per share amounts and employee data)* | [added: | |] Fiscal Years | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| | [removed: 2019(1)] | | [added: 2020] | | [added: | | | | 2019 | | | | | |] 2018 | | | | [removed: 2017] | | [added: 2017] | | [removed: 2016(3)] | | | | [removed: 2015] [added: 2016(2)] | | |

| Operations: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Net income per share: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Basic | [added: | |] $ | [removed: 6.07] [added: 10.94] | | | [added: | |] $ | [removed: 5.28] [added: 6.07] | | | [added: | |] $ | [removed: 3.43] [added: 5.28] | | | [added: | |] $ | [removed: 2.35] [added: 3.43] | | | [added: | |] $ | [removed: 1.26] [added: 2.35] | |

| Diluted | [added: | |] $ | [removed: 6.00] [added: 10.83] | | | [added: | |] $ | [removed: 5.20] [added: 6.00] | | | [added: | |] $ | [removed: 3.38] [added: 5.20] | | | [added: | |] $ | [removed: 2.32] [added: 3.38] | | | [added: | |] $ | [removed: 1.24] [added: 2.32] | |

| Shares used to compute basic net income per share | [removed: 486,291] | | [added: 481] | | [removed: 490,564] | | | | [removed: 493,632] [added: 486] | | | | [removed: 498,345] | | [added: 491] | | [removed: 498,764] | | | [added: | 494 | | | | | | 498 | | |]

| Shares used to compute diluted net income per share | [removed: 491,572] | | [added: 485] | | [removed: 497,843] | | | | [removed: 501,123] [added: 492] | | | | [removed: 504,299] | | [added: 498] | | [removed: 507,164] | | | [added: | 501 | | | | | | 504 | | |]

| Financial position: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Debt, current | [added: | |] $ | [removed: 3,149,343] [added: —] | | | [added: | |] $ | [removed: —] [added: 3,149] | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | — | |

| Additional data: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | |]

| Worldwide employees | [added: | | 22,516 | | | | | |] 22,634 | | | | [added: | |] 21,357 | | | | [removed: 17,973] | | [added: 17,973] | | [removed: 15,706] | | | | [removed: 13,893] [added: 15,706] | | |

[removed: | (1) | On] [added: Similarly, on] December 1, 2018, the beginning of our fiscal year 2019, we adopted the [removed: requirements of the Financial Accounting Standards Board’s Accounting Standards Update] [added: FASB’s ASU] No. 2014-09, Revenue from Contracts with [removed: Customers, Topic 606, utilizing] [added: Customers (Topic 606), using] the modified retrospective method of transition. [removed: Prior period information has not been restated and continues to be reported under the accounting standard in effect for those periods. |]

[removed: | (2) | As] [added: (1)As] of November 29, 2019, working capital was in a deficit primarily due to the reclassification of our $2.25 billion term loan due April 30, 2020 and $900 million 4.75% senior notes due February 1, 2020 to current liabilities. [removed: We intend to refinance our Term Loan and 2020 Notes on or before the due dates. |]

[removed: | (3) | Our fiscal year is a 52- or 53-week year that ends on the Friday closest to November 30.] Fiscal 2016 was a 53-week fiscal year compared with the other periods presented which were 52-week fiscal years. [removed: |]

On November 30, 2019, the beginning of our fiscal year 2020, we adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), using the alternative modified retrospective transition method provided in ASU 2018-11, Leases (Topic 842): Targeted Improvements.

Financial information prior to the respective periods of adoption has not been restated and continues to be reported under the accounting standards in effect for those periods.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Revenue | | | $ | 12,868 | | | | | $ | 11,171 | | | | | $ | 9,030 | | | | | $ | 7,302 | | | | | $ | 5,854 | |

| Gross profit | | | $ | 11,146 | | | | | $ | 9,498 | | | | | $ | 7,835 | | | | | $ | 6,291 | | | | | $ | 5,035 | |

| Income before income taxes | | | $ | 4,176 | | | | | $ | 3,205 | | | | | $ | 2,794 | | | | | $ | 2,138 | | | | | $ | 1,435 | |

| Net income | | | $ | 5,260 | | | | | $ | 2,951 | | | | | $ | 2,591 | | | | | $ | 1,694 | | | | | $ | 1,169 | |

| Cash, cash equivalents and short-term investments | | | $ | 5,992 | | | | | $ | 4,177 | | | | | $ | 3,229 | | | | | $ | 5,820 | | | | | $ | 4,761 | |

| Working capital(1) | | | $ | 2,634 | | | | | $ | (1,696) | | | | | $ | 556 | | | | | $ | 3,720 | | | | | $ | 3,028 | |

| Total assets | | | $ | 24,284 | | | | | $ | 20,762 | | | | | $ | 18,769 | | | | | $ | 14,536 | | | | | $ | 12,697 | |

| Debt, non-current | | | $ | 4,117 | | | | | $ | 989 | | | | | $ | 4,125 | | | | | $ | 1,881 | | | | | $ | 1,892 | |

| Stockholders’ equity | | | $ | 13,264 | | | | | $ | 10,530 | | | | | $ | 9,362 | | | | | $ | 8,460 | | | | | $ | 7,425 | |

We subsequently refinanced our Term Loan and 2020 Notes in February 2020, before the respective due dates.

(2)Our fiscal year is a 52- or 53-week year that ends on the Friday closest to November 30.

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | |

| Revenue: | $ | 11,171,297 | | | $ | 9,030,008 | | | $ | 7,301,505 | | | $ | 5,854,430 | | | $ | 4,795,511 | |

| Gross profit | $ | 9,498,577 | | | $ | 7,835,009 | | | $ | 6,291,014 | | | $ | 5,034,522 | | | $ | 4,051,194 | |

| Income before income taxes | $ | 3,204,741 | | | $ | 2,793,876 | | | $ | 2,137,641 | | | $ | 1,435,138 | | | $ | 873,781 | |

| Net income | $ | 2,951,458 | | | $ | 2,590,774 | | | $ | 1,693,954 | | | $ | 1,168,782 | | | $ | 629,551 | |

| Cash, cash equivalents and short-term investments | $ | 4,176,976 | | | $ | 3,228,962 | | | $ | 5,819,774 | | | $ | 4,761,300 | | | $ | 3,988,084 | |

| Working capital(2) | $ | (1,696,013 | ) | | $ | 555,913 | | | $ | 3,720,356 | | | $ | 3,028,139 | | | $ | 2,608,336 | |

| Total assets | $ | 20,762,400 | | | $ | 18,768,682 | | | $ | 14,535,556 | | | $ | 12,697,246 | | | $ | 11,714,500 | |

| Debt, non-current | $ | 988,924 | | | $ | 4,124,800 | | | $ | 1,881,421 | | | $ | 1,892,200 | | | $ | 1,895,259 | |

| Stockholders’ equity | $ | 10,530,155 | | | $ | 9,362,114 | | | $ | 8,459,869 | | | $ | 7,424,835 | | | $ | 7,001,580 | |

| | |

| --- | --- |

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| --- | --- |

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| --- | --- |

| | [added: | |] Page No. | [added: | |]

| [Consolidated Balance [removed: Sheets](#sA4F2365FA4425EC38C47A305B5089DE4)] [added: Sheets](#ib32ef6f531ec46d8a6555201235bf70f_112)] | [removed: [57](#sA4F2365FA4425EC38C47A305B5089DE4)] | [added: | [62](#ib32ef6f531ec46d8a6555201235bf70f_112) | | |]

| [Consolidated Statements of [removed: Income](#sD0D1A555C86E5DB8A8957BF35381F911)] [added: Income](#ib32ef6f531ec46d8a6555201235bf70f_118)] | [removed: [58](#sD0D1A555C86E5DB8A8957BF35381F911)] | [added: | [63](#ib32ef6f531ec46d8a6555201235bf70f_118) | | |]

| [Consolidated Statements of Comprehensive [removed: Income](#s43EA9B080E6E5F59A2AE125F57915B10)] [added: Income](#ib32ef6f531ec46d8a6555201235bf70f_121)] | [removed: [59](#s43EA9B080E6E5F59A2AE125F57915B10)] | [added: | [64](#ib32ef6f531ec46d8a6555201235bf70f_121) | | |]

| [Consolidated Statements of Stockholders' [removed: Equity](#s1063F56105B55D939EA5D0EBC01C2C0F)] [added: Equity](#ib32ef6f531ec46d8a6555201235bf70f_124)] | [removed: [60](#s1063F56105B55D939EA5D0EBC01C2C0F)] | [added: | [65](#ib32ef6f531ec46d8a6555201235bf70f_124) | | |]

| [Consolidated Statements of Cash [removed: Flows](#s1112D6533DDA517DBF99552C6352E19B)] [added: Flows](#ib32ef6f531ec46d8a6555201235bf70f_127)] | [removed: [61](#s1112D6533DDA517DBF99552C6352E19B)] | [added: | [66](#ib32ef6f531ec46d8a6555201235bf70f_127) | | |]

| [Notes to Consolidated Financial [removed: Statements](#s1B1F918660765E37B3A4064A85EDAF48)] [added: Statements](#ib32ef6f531ec46d8a6555201235bf70f_130)] | [removed: [62](#s1B1F918660765E37B3A4064A85EDAF48)] | [added: | [67](#ib32ef6f531ec46d8a6555201235bf70f_130) | | |]

| [Report of KPMG LLP, Independent Registered Public Accounting [removed: Firm](#s3B0DEAAB9D8E596CB7B84D4A7A5153CB)] [added: Firm](#ib32ef6f531ec46d8a6555201235bf70f_205)] | [removed: [104](#s3B0DEAAB9D8E596CB7B84D4A7A5153CB)] | [added: | [107](#ib32ef6f531ec46d8a6555201235bf70f_205) | | |]

(In [removed: thousands,] [added: millions,] except par value)

| | [added: | |] November [added: 27, 2020 | | | | | | November] 29, 2019 | | | | [added: | |] November 30, 2018 | | |

| ASSETS | | | | | | | | [added: | | | |]

| Current assets: | | | | | | | | [added: | | | |]

| Cash and cash equivalents | [added: | |] $ | [removed: 2,650,221] [added: 4,478] | | | [added: | |] $ | [removed: 1,642,775] [added: 2,650] | |

| Short-term [removed: investments] [added: investments:] | [removed: 1,526,755] | | | | [removed: 1,586,187] | | | [added: | | | | | | | | | | | | | | | |]

| Trade receivables, net of allowances for doubtful accounts of [removed: $9,650] [added: $21] and of [removed: $14,981,] [added: $10,] respectively | [removed: 1,534,809] | | [added: 1,398] | | [removed: 1,315,578] | | | [added: | 1,535 | | |]

| Prepaid expenses and other current assets | [removed: 783,140] | | [added: 756] | | [removed: 312,499] | | | [added: | 783 | | |]

| Property and equipment, net | [removed: 1,293,015] | | [added: 1,517] | | [removed: 1,075,072] | | | [added: | 1,293 | | |]

| Goodwill | [removed: 10,691,199] | | | | [removed: 10,581,048] | [added: $] | [added: 10,581] | [added: | | | | $ | 126 | | | | | $ | (16) | | | | | $ | 10,691 | | | | | $ | — | | | | | $ | 51 | | | | | $ | 10,742 | |]

| Other assets | [removed: 562,696] | | [added: 663] | | [removed: 186,522] | | | [added: | 562 | | |]

| Total assets | [added: | |] $ | [removed: 20,762,400] [added: 24,284] | | | [added: | |] $ | [removed: 18,768,682] [added: 20,762] | |

| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | [added: | | | |]

| Current liabilities: | | | | | | | | [added: | | | |]

| Trade payables | [added: | |] $ | [removed: 209,499] [added: 306] | | | [added: | |] $ | [removed: 186,258] [added: 209] | |

| Debt | [removed: 3,149,343] | | [added: —] | | [removed: —] | | | [added: | 3,149 | | |]

| Income taxes payable | [removed: 55,562] | | [added: 63] | | [removed: 35,709] | | | [added: | 56 | | |]

| Long-term liabilities: | | | | | | | | [added: | | | |]

| Income taxes payable | [removed: 616,102] | | [added: 529] | | [removed: 644,101] | | | [added: | 616 | | |]

| Deferred income taxes | [removed: 140,498] | | [added: 10] | | [removed: 46,702] | | | [added: | 140 | | |]

| Other liabilities | [removed: 173,056] | | [added: 223] | | [removed: 152,209] | | | [added: | 173 | | |]

| Total [removed: liabilities] | [removed: 10,232,245] | | [added: $] | [added: 232] | [removed: 9,406,568] | | | [added: | $ | — | | | | | $ | 245 | | | | | $ | 51 | |]

| Commitments and contingencies | | | | | | | | [added: | | | |]

| Stockholders’ equity: | | | | | | | | [added: | | | |]

| Preferred stock, $0.0001 par value; [removed: 2,000] [added: 2] shares authorized; none issued | [added: | |] — | | | | [added: | |] — | | |

| Common stock, $0.0001 par value; [removed: 900,000] [added: 900] shares authorized; [removed: 600,834] [added: 601] shares issued; [removed: 482,339] [added: 479] and [removed: 487,663] [added: 483] shares outstanding, respectively | [removed: 61] | | [added: —] | | [removed: 61] | | | [added: | — | | |]

| Additional paid-in-capital | [removed: 6,504,800] | | [added: 7,357] | | [removed: 5,685,337] | | | [added: | 6,504 | | |]

| Accumulated other comprehensive income (loss) | [removed: (188,034] | | [removed: )] [added: (158)] | | [removed: (148,130] | | [removed: )] | [added: | (188) | | |]

| Treasury stock, at cost [removed: (118,495] [added: (122] and [removed: 113,171] [added: 118] shares, [removed: respectively), net of re-issuances] [added: respectively)] | [removed: (10,615,234] | | [removed: )] [added: (13,546)] | | [removed: (7,990,751] | | [removed: )] | [added: | (10,615) | | |]

| Total stockholders’ equity | [removed: 10,530,155] | | [added: 13,264] | | [removed: 9,362,114] | | | [added: | 10,530 | | |]

| Total liabilities and stockholders’ equity | [added: | |] $ | [removed: 20,762,400] [added: 24,284] | | | [added: | |] $ | [removed: 18,768,682] [added: 20,762] | |

(In [removed: thousands,] [added: millions,] except per share data)

| | | | November 27, 2020 | | | | | | November 29, 2019 | | |

| Total current assets | | | 8,146 | | | | | | 6,495 | | |

| Operating lease right-of-use assets, net | | | 487 | | | | | | — | | |

| Goodwill | | | 10,742 | | | | | | 10,691 | | |

| Other intangibles, net | | | 1,359 | | | | | | 1,721 | | |

| Deferred income taxes | | | 1,370 | | | | | | — | | |

| Accrued expenses | | | 1,422 | | | | | | 1,399 | | |

| Deferred revenue | | | 3,629 | | | | | | 3,378 | | |

| Operating lease liabilities | | | 92 | | | | | | — | | |

| Total current liabilities | | | 5,512 | | | | | | 8,191 | | |

| Debt | | | 4,117 | | | | | | 989 | | |

| Deferred revenue | | | 130 | | | | | | 123 | | |

| Operating lease liabilities | | | 499 | | | | | | — | | |

| Retained earnings | | | 19,611 | | | | | | 14,829 | | |

| Subscription | | | $ | 11,626 | | | | | $ | 9,634 | | | | | $ | 7,604 | |

| Product | | | 507 | | | | | | 648 | | | | | | 622 | | |

| Services and other | | | 735 | | | | | | 889 | | | | | | 804 | | |

| Subscription | | | 1,108 | | | | | | 926 | | | | | | 574 | | |

| Product | | | 36 | | | | | | 40 | | | | | | 46 | | |

| Services and other | | | 578 | | | | | | 707 | | | | | | 575 | | |

| Total cost of revenue | | | 1,722 | | | | | | 1,673 | | | | | | 1,195 | | |

| Research and development | | | 2,188 | | | | | | 1,930 | | | | | | 1,538 | | |

| General and administrative | | | 968 | | | | | | 881 | | | | | | 745 | | |

| Total operating expenses | | | 6,909 | | | | | | 6,230 | | | | | | 4,995 | | |

| Income before income taxes | | | 4,176 | | | | | | 3,205 | | | | | | 2,794 | | |

| Provision for (benefit from) income taxes | | | (1,084) | | | | | | 254 | | | | | | 203 | | |

(In millions)

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Net income | | | $ | 5,260 | | | | | $ | 2,951 | | | | | $ | 2,591 | |

(In millions)

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balances at December 1, 2017 | | | | | | 601 | | | | | | $ | — | | | | | $ | 5,082 | | | | | $ | 9,574 | | | | | $ | (112) | | | | | (109) | | | | | | $ | (6,085) | | | | | $ | 8,459 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balances at November 30, 2018 | | | | | | 601 | | | | | | $ | — | | | | | $ | 5,685 | | | | | $ | 11,816 | | | | | $ | (148) | | | | | (113) | | | | | | $ | (7,991) | | | | | $ | 9,362 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,260 | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,260 | | |

| Re-issuance of treasury stock under stock compensation plans | | | | | | — | | | | | | — | | | | | | (56) | | | | | | (478) | | | | | | — | | | | | | 4 | | | | | | 123 | | | | | | (411) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | |

| --- | --- |

| | |

ADOBE INC.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| Total current assets | 6,494,925 | | | | 4,857,039 | | |

| Other intangibles, net | 1,720,565 | | | | 2,069,001 | | |

| | | | | | | | |

| Accrued expenses | 1,398,548 | | | | 1,163,185 | | |

| Deferred revenue | 3,377,986 | | | | 2,915,974 | | |

| Total current liabilities | 8,190,938 | | | | 4,301,126 | | |

| Debt | 988,924 | | | | 4,124,800 | | |

| Deferred revenue | 122,727 | | | | 137,630 | | |

| | | | | | | | |

| | | | | | | | |

| Retained earnings | 14,828,562 | | | | 11,815,597 | | |

ADOBE INC.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| Subscription | $ | 9,994,463 | | | $ | 7,922,152 | | | $ | 6,133,869 | |

| Product | 647,788 | | | | 622,153 | | | | 706,767 | | |

| Services and support | 529,046 | | | | 485,703 | | | | 460,869 | | |

| Subscription | 1,222,520 | | | | 807,221 | | | | 623,048 | | |

| Product | 39,625 | | | | 46,009 | | | | 57,082 | | |

| Services and support | 410,575 | | | | 341,769 | | | | 330,361 | | |

| Total cost of revenue | 1,672,720 | | | | 1,194,999 | | | | 1,010,491 | | |

| Research and development | 1,930,228 | | | | 1,537,812 | | | | 1,224,059 | | |

| Sales and marketing | 3,244,347 | | | | 2,620,829 | | | | 2,197,592 | | |

| General and administrative | 880,637 | | | | 744,898 | | | | 624,706 | | |

| Total operating expenses | 6,230,456 | | | | 4,994,640 | | | | 4,122,919 | | |

| Income before income taxes | 3,204,741 | | | | 2,793,876 | | | | 2,137,641 | | |

| Provision for income taxes | 253,283 | | | | 203,102 | | | | 443,687 | | |

| Net income | $ | 2,951,458 | | | $ | 2,590,774 | | | $ | 1,693,954 | |

(In thousands)

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of November [removed: 29, 2019.][added: 27, 2020.]

Based on their evaluation as of November [removed: 29, 2019,] [added: 27, 2020,] our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) were effective at the reasonable assurance level to ensure that the information required to be disclosed by us in this Annual Report on Form 10-K was (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Our management assessed the effectiveness of our internal controls over financial reporting as of November [removed: 29, 2019.][added: 27, 2020.]

Our management has concluded that, as of November [removed: 29, 2019,] [added: 27, 2020,] our internal controls over financial reporting is effective based on these criteria.

On [removed: December 1, 2018,] [added: November 30, 2019,] we implemented new and modified existing internal controls based on the adoption of the new [removed: revenue] [added: leases] standard.

This resulted in changes to our processes related to [removed: revenue recognition] [added: lease accounting] and underlying control activities, including our information systems.

There were no changes in our internal controls over financial reporting during the quarter ended November [removed: 29, 2019] [added: 27, 2020] that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

Beginning in March 2020, our employees across all geographic regions have shifted to working from home due to the pandemic.

We have performed an evaluation of our control environment, operating procedures, data and internal controls and determined that the design of our processes and controls have continued to operate effectively throughout this shift to a work-from-home environment.

The information required by this Item 10 of Form 10-K that is found in our [removed: 2020] [added: 2021] Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for the Company’s [removed: 2020] [added: 2021] Annual Meeting of Stockholders [removed: (“2020] [added: (“2021] Proxy Statement”) is incorporated herein by reference to our [removed: 2020] [added: 2021] Proxy Statement.

The [removed: 2020] [added: 2021] Proxy Statement will be filed with the SEC within 120 days after the end of the fiscal year to which this report relates.

For information with respect to our executive officers, [see “Executive Officers” at the end of Part I, Item [removed: 1](#s3C5AF6398F545346A49D87A37A805BDA)] [added: 1](#ib32ef6f531ec46d8a6555201235bf70f_46)] of this report.

The information required by this Item 11 of Form 10-K is incorporated herein by reference to our [removed: 2020] [added: 2021] Proxy Statement.

The information required by this Item 12 of Form 10-K is incorporated herein by reference to our [removed: 2020] [added: 2021] Proxy Statement.

The information required by this Item 13 of Form 10-K is incorporated herein by reference to our [removed: 2020] [added: 2021] Proxy Statement.

The information required by this Item 14 of Form 10-K is incorporated herein by reference to our [removed: 2020] [added: 2021] Proxy Statement.

[removed: | 1. | Financial Statements.] [See Index to Consolidated Financial Statements in Part II, Item [removed: 8](#sE19A1192B2AB5F619287CAA8F783CC13)] [added: 8](#ib32ef6f531ec46d8a6555201235bf70f_109)] of this Form 10-K. [removed: |]