Adobe (ADBE) 10-K risk factor changes: FY2021 vs FY2020

The COVID-19 pandemic and related public health measures have materially affected how we and our customers are operating our businesses, and have [added: in the past] materially affected our operating [removed: results.][added: results; the duration and extent to which this will impact our future results remain uncertain.]

The global macroeconomic effects of the pandemic may persist for an indefinite period, [added: including in specific regions of the world or sectors of the economy,] even after the pandemic has subsided.

[removed: Additionally,] [added: Even if we follow what we believe to be best practices,] our efforts to [removed: re-open] [added: reopen] our offices safely may not be [removed: successful,] [added: successful and] could expose our employees, [removed: customers, and] partners [added: and customers] to health risks, and us to associated [removed: liability, and will involve additional financial burdens.][added: liability.]

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

Moreover, the conditions caused by the pandemic [removed: have] [added: has] affected the rate of IT spending and may [removed: continue to] [added: in the future] 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 [removed: contracts,] [added: contracts] or affect attrition rates, all of which could adversely affect our future sales, operating results and overall financial performance.

Our operations have also [removed: begun to be] [added: been] negatively affected by a range of external factors related to the pandemic that are not within our [removed: control.][added: control, and COVID-19 cases (including the emergence and spread of more transmissible variants) continue to surge in certain parts of the world, including the United States.]

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 [removed: directives and] [added: directives, mask requirements,] shelter-in-place [removed: orders.][added: orders and vaccination programs.]

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, [removed: and] may [removed: also] delay the provisioning of our [removed: offerings.][added: offerings, and may impact our employees.]

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, [added: future waves of COVID-19 infections (including] the [added: spread of variants or mutant strains) resulting in additional preventive measures to contain or mitigate the spread of the virus, the] extent and effectiveness of containment [removed: actions] [added: actions, the administration, adoption] and [added: efficacy of vaccination programs and] the impact of these and other factors on our employees, customers, partners and vendors.

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 [added: technological developments.]

*[For additional information regarding our competition and the risks arising out of the competitive environment in which we operate, see the [removed: section entitled “Competition” contained in] [added: section](#i43a0f166e9174c8d9d706b477ac3a79e_25) [titled “Competition”](#i43a0f166e9174c8d9d706b477ac3a79e_25) [in] Part I, Item 1 of this [removed: report.](#ib32ef6f531ec46d8a6555201235bf70f_25)*][added: report.](#i43a0f166e9174c8d9d706b477ac3a79e_25)*]

[removed: If] [added: While] we [added: offer our products on a variety of hardware platforms, if we] cannot continue adapting our products to tablet and mobile devices, or if our competitors can adapt their products more quickly than us, our business could be harmed.

Releases of new devices or operating systems may make it more difficult for our products to perform or may require significant [removed: costs in order for us] [added: cost] to adapt our solutions to such devices or operating systems.

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

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

- increased accounts receivables collection times and working capital requirements associated with acquired business models; [added: and]

- delay in customer and distributor purchasing decisions due to uncertainty about the direction of our product and service offerings; [removed: and]

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

Maintaining and enhancing the brands within Adobe increases our ability to enter new [removed: categories and] [added: categories,] launch new and innovative products [removed: that] [added: to] better serve [removed: the needs of] our [removed: customers.][added: customers and expand our customer base.]

Our brands may be negatively affected by the use of our products or services to create or disseminate newsworthy content that is deemed to be misleading, deceptive, or intended to manipulate public opinion (e.g. “DeepFakes”), by the use of our products or services for illicit, [removed: objectionable,] [added: objectionable] or illegal ends, or by our failure to respond appropriately and expeditiously to such uses of our products and services.

Social and ethical issues relating to the use of [removed: AI] [added: new and evolving technologies, such as 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 [removed: (AI)] [added: (“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.

[removed: AI presents emerging ethical issues and if] [added: 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 [removed: in the space of] [added: related to] 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 [removed: AI and] [added: AI, which could] slow adoption of AI in our products and services.

Unauthorized access to or loss or disclosure of data stored by Adobe or our service providers may occur through physical break-ins, breaches of a secure network by an unauthorized [removed: party, software vulnerabilities or coding errors, employee theft or misuse or other misconduct.]

Additionally, failure by Adobe or our customers to remove the accounts of their own employees, or the granting of accounts in an uncontrolled manner, may allow for access by former [added: employees] or [added: other] unauthorized individuals.

If there were an inadvertent disclosure of customer data, or unauthorized access to the data we possess on behalf of our customers, our operations could be disrupted, our reputation could be damaged and we could be subject to claims or other liabilities, regulatory [removed: investigations,] [added: investigations] or fines.

In addition, such perceived or actual unauthorized loss or disclosure of the information we collect, [removed: process,] [added: process] or [removed: store] [added: store,] or breach of our security could damage our reputation, result in the loss of customers and harm our business.

If our business relationship with a third-party provider of hosting or content delivery services is negatively affected, or if one of our content delivery suppliers were to terminate its agreement with [removed: us,] [added: us] without adequate notice, we might not be able to deliver the corresponding hosted offerings to our customers, which could subject us to reputational harm, costly and time-intensive notification requirements, and cause us to lose customers and future business.

In addition, the COVID-19 pandemic [removed: could potentially] [added: has disrupted and may continue to] 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 [added: centers and to third-party hosted environments.]

If a transition among data centers or to third-party service providers encounters unexpected interruptions, unforeseen [removed: complexity,] [added: complexity] or unplanned disruptions despite precautions undertaken during the process, this may impair our delivery of products and services to customers and result in increased costs and liabilities, which may harm our operating [removed: results] [added: results, reputation] and our business.

In addition, computer viruses, worms, [added: ransomware] or other malware may harm our systems, causing us to lose data, and the transmission of computer viruses or other malware could expose us to litigation or regulatory investigation, and costly and time-intensive notification requirements.

We may also find, on occasion, that we cannot deliver data and reports to our customers in near real time because of a number of factors, including significant spikes in customer activity on their websites or failures of our network or [removed: software, or the failure] [added: software (or that] of [removed: our] [added: a] third-party service [removed: providers’ network or software.][added: provider).]

If we fail to plan infrastructure capacity appropriately and expand it proportionally with the needs of our customer base, and we experience a rapid and significant demand on the capacity of our data centers or those of third parties, service outages [added: or performance issues] could occur, [removed: and our customers could suffer impaired performance of] [added: which would impact] our [removed: services.][added: customers.]

If we supply inaccurate information or experience interruptions in our [removed: ability to capture, store and supply information in near real time or at all,] [added: systems,] our reputation could be [removed: harmed and] [added: harmed,] we could lose [removed: customers as a result, or] [added: customers, and] we could be found liable for damages or incur other losses.

[removed: And, as we have previously disclosed, certain] [added: Certain] unauthorized parties have in the past [removed: managed] [added: managed, and may again in the future manage,] to gain access to and misuse some of our systems and [removed: software] [added: software, or that of our third-party service providers,] in order to access [removed: our end users’] [added: the] authentication, payment and personal [removed: information.][added: information of our end users’ and employees.]

In addition, cyber-attackers [added: (which may include individuals or groups, as well as sophisticated groups such as nation-state and state-sponsored attackers, which can deploy significant resources to plan and carry out exploits)] also develop and deploy viruses, worms, credential stuffing attack tools and other malicious software programs, some of which may be specifically [removed: designed to attack our products, services, information systems or networks.]

The spread of COVID-19 has caused us to modify our business practices, including implementing prolonged closures and limited reopenings of certain Adobe offices and restricting employee travel.

Starting in June 2021, we began a phased reopening of all of our U.S. offices and certain of our international offices, and invited employees located near those reopened offices to return to the office on a voluntary basis.

The reopening of our U.S. offices has created and may continue to create additional risks and operational challenges and may require us to make additional investments in the design, implementation and enforcement of new workplace health and safety protocols.

Furthermore, additional and/or extended governmental restrictions, new regulations or other changing conditions could cause us to temporarily re-close certain offices.

We have offered, and plan to continue to offer, a significant percentage of our employees flexibility in the amount of time they work in an office, which may adversely impact the productivity of certain employees and harm our business, including our future operating results.

This may also present risks for our real estate portfolio and strategy and may present operational, cybersecurity and workplace culture challenges that may adversely affect our business.

Global and regional macroeconomic effects of the COVID-19 pandemic and related impacts on our customers’ business operations and their demand for our products and services may persist for an indefinite period, even after the COVID-19 pandemic has subsided.

Vaccines for COVID-19 continue to be administered in the United States and other countries around the world, but the extent and rate of vaccine adoption, the long-term efficacy of these vaccines and other factors remain uncertain.

As long as the pandemic continues, our employees will continue to be exposed to health risks, and we could be negatively impacted in the future if a significant number of our employees, or employees who perform critical functions, become ill, quarantine as a result of exposure to COVID-19 or do not comply with vaccination programs.

As we continue to monitor the situation and public health guidance throughout the world, we may adjust our current policies and practices, and existing and new precautionary measures could negatively affect our operations.

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For example, some of our products rely on tracking, third-party cookies or other identifiers to help our customers more effectively advertise

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and detect and prevent fraudulent activity.

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party, software vulnerabilities or coding errors, employee theft or misuse or other misconduct.

Cyberthreats are constantly evolving and becoming increasingly sophisticated and complex, making it increasingly difficult to detect and successfully defend against them.

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designed to attack our products, services, information systems or networks.

This existing risk is compounded given the COVID-19 pandemic, as we shifted nearly all of our workforce to more frequent work-from-home arrangements.

We also expect to resume operations in our offices under a hybrid model where a large portion of our workforce will spend a portion of their time working in our offices and a portion of their time working from home.

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We cannot provide assurance that our employees,

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introduced certain international provisions applicable to us.

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General Risk Factors

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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.

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.

technological developments.

We offer our products on a variety of hardware platforms.

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.

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.

We also believe that maintaining and enhancing our brands is critical to expanding our base of customers.

centers and to third-party hosted environments.

Security threats to our information systems, end points and networks have the potential to impact our customers as well.

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.

These vulnerabilities could cause such applications and services to crash and could allow an attacker to access our or our users’ confidential or personal information or take control of the affected system, which could result in liability to us or limit our ability to conduct our business and deliver our products and services to customers.

Further, if we, our supply chain, or our customers are subject to a future attack, or our technology is used in a third-party attack, we could be subject to costly and time-intensive notice requirements, and it may be necessary for us to take additional extraordinary measures and make additional expenditures to take appropriate responsive and preventative steps.

Any of these events could adversely affect our revenue or margins.

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

If sales to any of our

We outsource a substantial portion of our customer service and technical support activities to third-party service providers.

These individuals have acquired specialized knowledge and skills with respect to Adobe.

Our business is also dependent on our ability to retain, hire and motivate talented, highly skilled personnel across all levels of our organization.

For example, in California, increasing intensity of drought

Additionally, we collect and store

Basis of Presentation and Summary of Significant Accounting Policies.](#ib32ef6f531ec46d8a6555201235bf70f_133)*

A significant portion of our foreign earnings for the current fiscal year were earned by our Irish subsidiaries.

*[See the section titled “Provision for (Benefit from) Income Taxes” within Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations](#ib32ef6f531ec46d8a6555201235bf70f_100).*

termination of contracts, payment of fines, and suspension or debarment from future government business, as well as harm to our reputation and financial results.

Discussion regarding our financial condition and results of operations for fiscal [removed: 2019] [added: 2020] as compared to fiscal [removed: 2018] [added: 2019] is included in Item 7 of our Annual Report on Form 10-K for the fiscal year ended November [removed: 29, 2019,] [added: 27, 2020,] filed with the SEC on January [removed: 21, 2020.*][added: 15, 2021.*]

*[See Note 3 of our Notes to Consolidated Financial Statements for further information regarding these [removed: acquisitions, including pro forma financial information related to the Marketo 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.][added: acquisitions](#i43a0f166e9174c8d9d706b477ac3a79e_139)[.](#i43a0f166e9174c8d9d706b477ac3a79e_139)*]

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 [added: real time; shared reviews which enable simultaneous editing and commenting of PDFs across desktop, 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 recognition and automated document tagging.]

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

These tax examinations are expected to focus on our [added: research and development tax credits,] intercompany transfer pricing [removed: practices, application of tax rules,] [added: practices] and other matters.

We regularly assess the likelihood of outcomes resulting from these examinations to determine the adequacy of our provision for income taxes and have reserved for potential adjustments that may result from [removed: such] [added: these] examinations.

*[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.](#ib32ef6f531ec46d8a6555201235bf70f_133)*][added: us.](#i43a0f166e9174c8d9d706b477ac3a79e_133)*]

For our fiscal [removed: 2020,] [added: 2021,] we experienced strong demand across our Digital Media offerings consistent with the continued execution of our long-term plans with respect to this segment.

We expect Creative Cloud will drive sustained long-term revenue growth through a continued expansion of our customer base by [removed: acquiring] [added: attracting] new users [removed: as a result of] [added: with new features and products, continuing to acquire users with our] low cost of entry and delivery of additional features and value to Creative Cloud, [removed: as well as keeping] [added: and delivering new features and technologies to] existing customers [removed: current on] [added: with] our latest [removed: release.][added: releases.]

We continue to implement strategies that [removed: will] [added: are designed to] accelerate awareness, consideration and purchase of subscriptions to our Creative Cloud offerings.

These strategies include increasing the value Creative Cloud users receive, such as offering new desktop and mobile applications, as well as targeted promotions and offers that attract past customers and potential users to [removed: try out] [added: experience] and ultimately subscribe to Creative Cloud.

ARR should be viewed independently of revenue, deferred [removed: revenue, unbilled backlog] [added: revenue] and remaining performance [removed: obligation] [added: obligations] as ARR is a performance metric and is not intended to be combined with any of these items.

We adjust our reported ARR on an annual basis to reflect any [removed: material] exchange [removed: rates] [added: rate] changes.

[removed: Our reported ARR results in the] current fiscal year are based on currency rates set at the beginning of the year and held constant throughout the year.

Creative ARR exiting fiscal [removed: 2020] [added: 2021] was [removed: $8.72] [added: $10.30] billion, up from [removed: $7.25] [added: $8.78] billion at the end of fiscal [removed: 2019.][added: 2020.]

Document Cloud ARR exiting fiscal [removed: 2020] [added: 2021] was [removed: $1.46] [added: $1.93] billion, up from [removed: $1.08] [added: $1.47] billion at the end of fiscal [removed: 2019.][added: 2020.]

Total Digital Media ARR grew to [removed: $10.18] [added: $12.24] billion at the end of fiscal [removed: 2020,] [added: 2021,] up from [removed: $8.33] [added: $10.26] billion at the end of fiscal [removed: 2019.][added: 2020.]

Revaluing our ending ARR for fiscal [removed: 2020] [added: 2021] using currency rates at the beginning of fiscal [removed: 2021,] [added: 2022,] our Digital Media ARR at the end of fiscal [removed: 2020] [added: 2021] would be [removed: $10.26] [added: $12.15] billion or approximately [removed: $77] [added: $86] million [removed: higher] [added: lower] than the ARR reported above.

Creative revenue in fiscal [removed: 2020] [added: 2021] was [removed: $7.74] [added: $9.55] billion, up from [removed: $6.48] [added: $7.74] billion in fiscal [removed: 2019] [added: 2020] and representing [removed: 19%] [added: 23%] year-over-year growth.

Document Cloud revenue in fiscal [removed: 2020] [added: 2021] was [removed: $1.50] [added: $1.97] billion, up from [removed: $1.22] [added: $1.50] billion in fiscal [removed: 2019] [added: 2020] and representing [removed: 22%] [added: 32%] year-over-year [removed: revenue] growth [removed: and reflecting] [added: which reflected] an increase in demand driven by [removed: the shift to remote work as well as] [added: new user acquisition for] our [removed: continued efforts to transition] Document Cloud [removed: to a subscription-based model.][added: subscription offerings.]

Total Digital Media segment revenue grew to [removed: $9.23] [added: $11.52] billion in fiscal [removed: 2020,] [added: 2021,] up from [removed: $7.71] [added: $9.23] billion in fiscal [removed: 2019] [added: 2020] and representing [removed: 20%] [added: 25%] year-over-year growth.

Adobe Experience Cloud [removed: is focused on delivering] [added: delivers] solutions for our [removed: enterprise] customers across the following strategic growth pillars:

[added: - *Data insights and audiences.*] Our [removed: offerings include Adobe Experience Platform,] [added: solutions, including] Adobe Analytics, Adobe [removed: Audience Manager,] [added: Experience Platform,] Customer Journey Analytics, [added: Adobe Audience Manager and our] Real-time Customer Data [removed: Platform] [added: Platform, deliver robust customer profiles] and [removed: Intelligent Services.][added: AI-powered analytics across the customer journey to provide timely, relevant experiences across platforms.]

- *Content and commerce.* Our solutions [removed: to] help customers manage, [removed: deliver, test, target] [added: deliver] and optimize content [removed: delivery] [added: delivery, through Adobe Experience Manager] and [added: to] enable shopping experiences that scale from mid-market to enterprise [removed: businesses.][added: businesses, with Adobe Commerce.]

- *Customer [removed: journey management.*] [added: journeys.*] Our solutions help businesses manage, [added: test, target,] personalize and orchestrate campaigns and customer journeys across B2E use [removed: cases.][added: cases, including through Marketo Engage, Adobe Campaign, Adobe Target and Journey Optimizer.]

Digital Experience revenue was [removed: $3.13] [added: $3.87] billion in fiscal [removed: 2020,] [added: 2021,] up from [removed: $2.80] [added: $3.13] billion in fiscal [removed: 2019] [added: 2020] which represents [removed: 12%] [added: 24%] year-over-year growth.

Driving this increase was the increase in subscription revenue across our offerings which grew to [removed: $2.66] [added: $3.38] billion in fiscal [removed: 2020] [added: 2021] from [removed: $2.28] [added: $2.66] billion in fiscal [removed: 2019,] [added: 2020,] representing [removed: 17%] [added: 27%] year-over-year growth.

[removed: This] [added: The COVID-19] pandemic [removed: has had] [added: continues to have] widespread, rapidly-evolving and unpredictable impacts on global societies, economies, financial markets and business practices.

This [removed: macro trend towards all things digital] [added: ongoing shift to a digital-first world] has increased the importance and relevance of our [removed: solutions and accelerated the tailwinds that benefit our business,] [added: solutions,] which [added: has] 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 [added: duration of the pandemic and the] broader implications of the [removed: pandemic] [added: macro-economic recovery] on our [removed: results of operations and overall financial performance] [added: business] remain uncertain.

[removed: *[See Risk Factors for] [added: *[S](#i43a0f166e9174c8d9d706b477ac3a79e_49)[ee](#i43a0f166e9174c8d9d706b477ac3a79e_49) [the section titled](#i43a0f166e9174c8d9d706b477ac3a79e_49) [“](#i43a0f166e9174c8d9d706b477ac3a79e_49)[Risk Factors](#i43a0f166e9174c8d9d706b477ac3a79e_49)[”](#i43a0f166e9174c8d9d706b477ac3a79e_49) [](#i43a0f166e9174c8d9d706b477ac3a79e_49)[in Part I, Item 1A](#i43a0f166e9174c8d9d706b477ac3a79e_49) [of this report](#i43a0f166e9174c8d9d706b477ac3a79e_49) [fo](#i43a0f166e9174c8d9d706b477ac3a79e_49)[r] further discussion of the possible impact of the pandemic on our [removed: business.](#ib32ef6f531ec46d8a6555201235bf70f_49)*][added: business.](#i43a0f166e9174c8d9d706b477ac3a79e_49)*]

*Financial Performance Summary for Fiscal [removed: 2020*][added: 2021*]

- Total Digital Media ARR of approximately [removed: $10.18] [added: $12.24] billion as of [removed: November 27, 2020] [added: December 3, 2021] increased by [removed: $1.85] [added: $1.98] billion, or [removed: 22%,] [added: 19%,] from [removed: $8.33] [added: $10.26] billion as of November [removed: 29, 2019.][added: 27, 2020.]

The [removed: increase] [added: change] in our Digital Media ARR was primarily due to new user adoption of our Creative Cloud and Document Cloud offerings.

- Creative revenue of [removed: $7.74] [added: $9.55] billion increased by [removed: $1.25] [added: $1.81] billion, or [removed: 19%,] [added: 23%,] during fiscal [removed: 2020,] [added: 2021,] from [removed: $6.48] [added: $7.74] billion in fiscal [removed: 2019.][added: 2020.]

Document Cloud revenue of [removed: $1.50] [added: $1.97] billion increased by [removed: $272] [added: $477] million, or [removed: 22%,] [added: 32%,] during fiscal [removed: 2020,] [added: 2021,] from [removed: $1.22] [added: $1.50] billion in fiscal [removed: 2019.][added: 2020.]

- Digital Experience revenue of [removed: $3.13] [added: $3.87] billion increased by [removed: $330] [added: $742] million, or [removed: 12%,] [added: 24%,] during fiscal [removed: 2020,] [added: 2021,] from [removed: $2.80] [added: $3.13] billion in fiscal [removed: 2019.][added: 2020.]

The increase was primarily due to subscription revenue growth across our [removed: offerings.][added: offerings, including from our Workfront acquisition.]

- Remaining performance [removed: obligation] [added: obligations] of [removed: $11.34] [added: $13.99] billion as of [removed: November 27, 2020] [added: December 3, 2021] increased by [removed: $1.52] [added: $2.65] billion, or [removed: 15%,] [added: 23%,] from [removed: $9.82] [added: $11.34] billion as of November [removed: 29, 2019,] [added: 27, 2020,] primarily due to new contracts and renewals for our Digital Media and Digital Experience [removed: offerings.][added: offerings, as well as impacts from our Workfront acquisition.]

- Cost of revenue of [removed: $1.72] [added: $1.87] billion increased by [removed: $49] [added: $143] million, or [removed: 3%,] [added: 8%,] during fiscal [removed: 2020,] [added: 2021,] from [removed: $1.67] [added: $1.72] billion in fiscal [removed: 2019] [added: 2020] primarily due to increases in hosting services and data center costs, [added: partially] offset [removed: in large part] by decreases in Advertising Cloud media costs.

- expected costs to develop acquired technologies and patents internally into commercially viable products;

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In the fourth quarter of fiscal 2021, we completed the acquisition of Frame.io, a privately held company that provides a cloud-based video collaboration platform, for approximately $1.18 billion and we began integrating Frame.io into our Digital Media reportable segment.

In the first quarter of fiscal 2021, we completed the acquisition of Workfront, a privately held company that provides a workflow platform, for approximately $1.52 billion in cash consideration and we began integrating Workfront into our Digital Experience reportable segment.

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

Overview of 2021

Our financial results for fiscal 2021 benefited from an extra week in the first quarter of fiscal 2021 due to our 52/53 week financial calendar whereby fiscal 2021 is a 53-week year compared with fiscal 2020 and 2019 which were 52-week years.

In October 2021, we acquired Frame.io, a privately held company that provides a cloud-based video collaboration platform, and we began integrating Frame.io into our Digital Media segment.

As part of our Creative Cloud and Document Cloud strategies, we utilize a data-driven operating model (“DDOM”) and our Adobe Experience Cloud solutions to raise awareness of our products, drive new customer acquisition, engagement and retention, and optimize customer journeys.

As a result, we observed strong growth in Digital Media revenue during fiscal 2021.

Our reported ARR results in the

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In December 2020, we acquired Workfront, a privately held company that provides a workflow platform, and integrated Workfront into our Digital Experience segment.

- *Marketing workflow.* We offer Adobe Workfront, a work management platform directed toward marketers to orchestrate campaign workflows.

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Also contributing to the increase in Digital Experience subscription revenue was revenue associated with Workfront’s workflow platform offerings.

We expect that the addition of Workfront, and continued demand across our portfolio of Digital Experience solutions, will drive revenue growth in future years.

As conditions fluctuate around the world, with vaccine administration rising in certain regions, governments and organizations have responded by adjusting their restrictions and guidelines accordingly.

We carefully assess, and reassess, conditions on a case-by-case basis to determine when employees can safely return to our offices and resume business travel.

As a result, we have reopened our offices in areas with sustained low infection rates and are allowing fully vaccinated employees to return on a voluntary basis.

In addition, we are implementing our reimagined framework for the future of work at Adobe, which is rooted in a flexible and hybrid model enabled by a digital-first mindset.

Our financial results for fiscal 2021 benefited from an extra week in the first quarter of fiscal 2021 due to our 52/53 week financial calendar whereby fiscal 2021 is a 53-week year compared with fiscal 2020 and 2019 which were 52-week years.

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To a lesser extent, net income was also impacted by increases in operating expenses, offset by increases in revenue.

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

Our customers include creative professionals, including photographers, video editors, graphic and experience designers and game developers, communicators, including content creators, students, marketers and knowledge workers, and consumers.

- *Digital Experience*—Our Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize and optimize customer experiences that span from analytics to commerce.

- *Publishing and Advertising*—Our Publishing and Advertising segment contains legacy products and services that address diverse market opportunities, including eLearning solutions, technical document publishing, web conferencing, document and forms platform, web application development, high-end printing and our Adobe Advertising Cloud offerings.

| Total revenue | | | | | | $ | 15,785 | | | | | $ | 12,868 | | | | | $ | 11,171 | | | | | 23 | | % | | | | | | |

Revenue by major offerings in our Digital Media reportable segment for fiscal 2021, 2020 and 2019 were as follows:

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

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

| *(dollars in millions)* | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | | | | | % Change 2021-2020 | | |

| Creative Cloud | | | | | | $ | 9,546 | | | | | $ | 7,736 | | | | | $ | 6,482 | | | | | 23 | | % |

| Document Cloud | | | | | | 1,974 | | | | | | 1,497 | | | | | | 1,225 | | | | | | 32 | | % |

| Total Digital Media revenue | | | | | | $ | 11,520 | | | | | $ | 9,233 | | | | | $ | 7,707 | | | | | 25 | | % |

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| *(dollars in millions)* | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | | | | | % Change 2021-2020 | | | | | | | | |

| Total revenue | | | | | | $ | 15,785 | | | | | $ | 12,868 | | | | | $ | 11,171 | | | | | 23 | | % | | | | | | |

During fiscal 2021, the foreign currency impacts to revenue were offset in part by net hedging losses from our cash flow hedging program of $18 million.

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.

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 $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 approximately $4.73 billion and Magento, a privately held commerce platform company, for approximately $1.64 billion, and integrated them into our Digital Experience reportable segment.

We also completed other immaterial business acquisitions during the fiscal years presented.

real time; shared reviews which enable simultaneous editing and commenting of PDFs across desktop, 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 recognition and automated document tagging.

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

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.

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

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

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

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

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.

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.

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.

These increases were offset in part by decreases in travel-related expenses.

Presentation Changes

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 our Advertising Cloud offerings with our previous Publishing segment.

Further, we reclassified revenue and related cost of revenue of our Advertising Cloud offerings from subscription to services and other on our Consolidated Statements of Income.

Financial information for all fiscal years presented has been updated to reflect these reclassifications.

There were no other updates to disclosures included in our prior year report in relation to the reclassifications.

Our financial results for fiscal 2020 and 2019 are presented in accordance with 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.

Fiscal 2018 results have not been restated which limits its comparability with other fiscal years presented.

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_________________________________________

(*) Percentage is less than 1%.

We primarily recognize

Our customers include content creators, experience designers, app developers, enthusiasts, students, social media users and creative professionals, as well as marketing departments and agencies, companies and publishers.

Our customers also include knowledge workers who create, collaborate on and distribute documents and creative content.

- *Digital Experience*—Our Digital Experience segment provides products, services and solutions for creating, managing, executing, measuring, monetizing and optimizing customer experiences from analytics to commerce.

- *Publishing and Advertising*—Our Publishing and Advertising segment addresses market opportunities ranging from the diverse authoring and publishing needs of technical and business publishing to our legacy type and OEM printing businesses.

It also includes our platforms for Advertising Cloud, web conferencing, document and forms, and Primetime.

Our cash flow hedging program is used to mitigate a portion of the foreign currency impact to revenue.

Our significant foreign currency revenue exposures for fiscal [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] were as follows :

| *(in millions)* | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Euro | | | € | [removed: 1,887] [added: 2,209] | | | | | € | [removed: 1,603] [added: 1,887] | | | | | € | [removed: 1,310] [added: 1,603] | |

| Japanese Yen | | | ¥ | [removed: 88,640] [added: 104,829] | | | | | ¥ | [removed: 73,158] [added: 88,640] | | | | | ¥ | [removed: 60,791] [added: 73,158] | |

| British Pounds | | | £ | [removed: 562] [added: 669] | | | | | £ | [removed: 503] [added: 562] | | | | | £ | [removed: 423] [added: 503] | |

| Australian Dollars | | | $ | [removed: 645] [added: 768] | | | | | $ | [removed: 538] [added: 645] | | | | | $ | [removed: 441] [added: 538] | |

As of [removed: November 27, 2020,] [added: December 3, 2021,] the total notional amounts of all outstanding foreign exchange contracts, including options and forwards, [removed: was $2.03] [added: were $3.03] billion, which included the notional equivalent of [removed: $923 million] [added: $1.47 billion] in Euros, [removed: $385 million in Japanese Yen, $321] [added: $480] million in British Pounds, [removed: $212] [added: $448] million in [added: Japanese Yen, $338 million in] Australian Dollars and [removed: $186] [added: $299] million in other foreign currencies.

As of [removed: November 27, 2020,] [added: December 3, 2021,] all contracts were set to expire at various dates through June [removed: 2021.][added: 2022.]

[added: 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 [removed: November 27, 2020.][added: December 3, 2021.]

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: $97] [added: $172] 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: $9] [added: $76] million.

For example, in many countries, revenue in the local currencies substantially offsets the [removed: local currency denominated operating expenses.]

As of [removed: November 27, 2020] [added: December 3, 2021] and November [removed: 29, 2019,] [added: 27, 2020,] this long-term investment exposure totaled an absolute notional equivalent of [removed: $598] [added: $749] million and [removed: $385] [added: $598] million, respectively, with the year-over-year increase primarily driven by earnings growth.

For the fiscal year ended [removed: November 27, 2020,] [added: December 3, 2021,] there were no net gains or losses recognized in revenue relating to hedges of forecasted transactions that did not occur.

At [removed: November 27, 2020,] [added: December 3, 2021,] the outstanding balance sheet hedging derivatives had maturities of 180 days or less.

*[See Note 6 of our Notes to Consolidated Financial Statements for information regarding our derivative financial [removed: instruments.](#ib32ef6f531ec46d8a6555201235bf70f_148)*][added: instruments.](#i43a0f166e9174c8d9d706b477ac3a79e_151)*]

At [removed: November 27, 2020,] [added: December 3, 2021,] we had debt securities classified as short-term investments of [removed: $1.51] [added: $1.95] billion.

[removed: The] [added: A sensitivity] analysis [removed: is] [added: was performed on our investment portfolio as of December 3, 2021,] based on an estimate of the hypothetical changes in market value of the portfolio that would result from an immediate parallel shift in the yield [removed: curve of various magnitudes.][added: curve.]

As of [removed: November 27, 2020,] [added: December 3, 2021,] the total carrying amount of our [removed: Notes] [added: senior notes] was $4.12 billion and the related fair value based on observable market prices in less active markets was [removed: $4.48] [added: $4.29] billion.

*[See Note 17 of our Notes to Consolidated Financial Statements for information regarding our senior [removed: notes.](#ib32ef6f531ec46d8a6555201235bf70f_193)*][added: notes.](#i43a0f166e9174c8d9d706b477ac3a79e_187)*]

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local currency denominated operating expenses.

A 150 basis point increase in interest rates would lead to a $27 million decrease in the market value of our short-term investments.

Conversely, a 150 basis point decrease in interest rates would lead to a $14 million increase in the market value of our short-term investments.

As of December 3, 2021, we had $4.15 billion of senior notes outstanding which bear interest at fixed rates, and therefore do not subject us to financial statement risk associated with changes in interest rates.

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In addition, we enter into collateral security agreements that

A sensitivity analysis was performed on our investment portfolio as of November 27, 2020.

The following tables present the hypothetical fair values of our debt securities classified as short-term investments assuming immediate parallel shifts in the yield curve of 50 basis points (“BPS”), 100 BPS and 150 BPS.

The analysis is shown as of November 27, 2020 and November 29, 2019:

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

| *(dollars in millions)* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| \-150 BPS | | | | | | \-100 BPS | | | | | | \-50 BPS | | | | | | Fair Value 11/27/20 | | | | | | +50 BPS | | | | | | +100 BPS | | | | | | +150 BPS | | |

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

| \-150 BPS | | | | | | \-100 BPS | | | | | | \-50 BPS | | | | | | Fair Value 11/29/19 | | | | | | +50 BPS | | | | | | +100 BPS | | | | | | +150 BPS | | |

| $ | 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.

Founded in 1982, Adobe [removed: Inc.] is one of the largest and most diversified software companies in the world.

We offer a line of products and services used by creative [removed: professionals] [added: professionals,] including photographers, video editors, [added: graphic and experience] designers and [added: game] developers; [removed: communicators] [added: communicators,] including content creators, students, marketers and 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, [added: smartphones, other electronic] devices and [removed: media.][added: digital media formats.]

Our products run on [removed: personal] [added: desktop] and [removed: server-based] [added: laptop] computers, [removed: as well as on] smartphones, [removed: tablets and] [added: tablets,] other [removed: devices,] [added: devices and the web,] depending on the product.

Investors can obtain copies of our SEC filings from [removed: this site] [added: our website] free of charge, as well as from the SEC website at www.sec.gov.

[removed: BUSINESS OVERVIEW][added: OVERVIEW]

For [removed: over 35] [added: almost 40] years, Adobe’s innovations have transformed how individuals, teams, businesses and governments engage and interact [removed: with their constituents in print and online.][added: across all types of media.]

While we continue to offer a broad portfolio of products, services and solutions, we focus our investments in two [added: areas of] strategic [removed: growth areas:][added: growth:]

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

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

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

Our customers include marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, [removed: developers, marketing executives, information management] [added: developers] and [removed: technology executives, product development] executives [removed: and sales and support executives.][added: across the C-suite.]

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

[removed: By combining the creativity of our Digital Media business with the science of our Digital Experience offerings,] [added: Through these tools and services,] we help our customers more efficiently and effectively make, manage, measure and monetize their content across channels and devices with an end-to-end workflow and feedback loop.

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

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

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

This overview provides an explanation of our markets and a discussion of strategic opportunities in fiscal [removed: 2021] [added: 2022] and beyond for each of our segments.

*See [added: the section titled] “Results of Operations” [removed: within] [added: in] Part II, Item 7 titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” [added: of this report] and Note 2 of [removed: Part II, Item 8 titled “Notes] [added: our Notes] to Consolidated Financial [removed: Statements”] [added: Statements] for further segment information.*

[removed: *Digital Media Opportunity*][added: - Digital Media;]

Everyone has a story to [removed: tell — from] [added: tell—from] creative professionals, to communicators, to [removed: consumers — and with content creation and consumption exploding across every type of device,] [added: consumers, to first-time creators—and] they need the [removed: tools] [added: tools, services and capabilities at their fingertips] to tell those stories on an ever-increasing number of canvasses.

The flagship of our Digital Media business is Adobe Creative [removed: Cloud —] [added: Cloud,] a subscription service that allows members to use [removed: Adobe’s] [added: our] creative products integrated with cloud-delivered services across desktop, web and mobile devices.

[added: We believe in creativity for all, and] Creative Cloud addresses the needs of [added: all content creators, from] creative [removed: professionals] [added: professionals,] such as artists, designers, developers, students and administrators, [removed: as well as] [added: to] knowledge workers, marketers, educators, [removed: hobbyists,] [added: enthusiasts and] communicators and [removed: consumers, all of whom use our products] to [removed: create and deliver content.][added: consumers.]

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

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

Adobe’s Digital Media segment [added: also] includes our [added: Adobe] Document Cloud business, [removed: built around our Acrobat family of products and] a unified, cloud-based document services platform, which [removed: includes Acrobat, Adobe Sign] [added: integrates Adobe’s pioneering PDF technology with our Acrobat] and Adobe [removed: Scan.][added: Sign applications to deliver fully digital document workflows.]

Digital documents have a mission-critical role in powering modern businesses with [removed: tens] [added: hundreds] of millions of communicators worldwide interacting with documents every day.

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

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

[removed: As part of our Creative Cloud strategy, we utilize a data-driven operating model and our Adobe] Experience Cloud [removed: 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.

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

Our collaboration [added: tools and] services [removed: also] help us [added: to further] expand our universe of business customers beyond creative [removed: professionals, as] [added: professionals to] other stakeholders [added: who] use our products for review [added: and approval] purposes, copywriting or leveraging templates for social media marketing.

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

We also offer a range of other creative tools and services, including [removed: our] hobbyist [removed: products] [added: products,] such as Photoshop Elements and Premiere [removed: Elements,] [added: Elements;] libraries of creative [removed: assets like] [added: assets, such as] Adobe Stock and Adobe [removed: Fonts and tailored,] [added: Fonts;] mobile-first [removed: apps] [added: apps,] such as Photoshop [removed: Camera, Adobe Aero, Adobe Capture, Adobe Fresco for iPhone, Premiere Rush] [added: Camera;] and [removed: Adobe Spark that allow creators] [added: Creative Cloud Libraries, a central place for users] to [removed: capture, create, enhance and share content within seconds.][added: store their assets.]

Trillions of PDF documents are created every year, which reflects the growing role PDF plays across practically every segment of the economy, and [removed: we believe] there [removed: remain] [added: are] hundreds of millions of users [removed: in industries] that engage with PDF files on a daily [removed: basis like] [added: basis, in industries such as] legal, financial services [removed: or] [added: and] publishing, as well as a broader array of communicators and Acrobat Reader users, who [removed: need] [added: can also use] the [added: expanded] capabilities provided by our Acrobat applications and the document services platform found in Document Cloud.

[removed: We] [added: In our Adobe Document Cloud business, we] expect to drive sustained long-term revenue growth [removed: in Document Cloud] through a continued expansion of our customer base by [removed: delivering] [added: continuing to deliver] the best PDF experience on [removed: every platform] and across [removed: platforms, expanding] [added: every platform, improve Acrobat web’s functionality and single-click ease of use, expand] the number of [added: task-based] actions [removed: and features] in Acrobat, [removed: using] [added: integrate] Adobe [removed: Sensei] [added: Sign into Acrobat] across [removed: our document products and services] [added: all surfaces, drive innovation with Adobe Sensei (machine-learning/AI)] to make both new and legacy documents more intelligent and responsive, [removed: and investing in embedded document services such as integrating Acrobat] [added: unlock business workflows through PDF] and Adobe Sign [removed: functionality in third-party applications.][added: APIs, and leverage diversified go-to-market motions to reach all segments.]

We aim to increase our [removed: seat penetration] [added: reach] in our key markets through the utilization of our corporate and volume licensing programs.

[removed: Our] [added: As our] Document Cloud customers increasingly expect business processes to be seamless across [removed: desktop, web] [added: devices] and [removed: mobile devices.][added: the web, we are expanding our Document Cloud capabilities to meet this need.]

[added: Adobe] Acrobat [removed: Reader] [added: Reader, our free software for reliable viewing, annotating and printing of Adobe PDF documents] on [added: a variety of desktop and] mobile [removed: devices can be used] [added: platforms, offers features] to create, edit, export, combine, [added: share and] collaborate on [removed: and share PDFs] [added: PDF documents] on [removed: the go and] [added: mobile devices, including] the [removed: new] “Liquid Mode” feature [added: that] automatically reformats [removed: text, images and tables] [added: PDFs] for quick navigation and consumption on smaller screens.

[removed: Our] Adobe Sign [removed: service] also provides a green alternative to [removed: costly] [added: costly,] paper-based [removed: solutions,] [added: solutions] and [removed: is] [added: offers] a [removed: more modern and] [added: modern,] convenient [removed: way] [added: solution] for customers to digitally manage their documents, [added: automate] processes and contract workflows.

We believe that by growing the awareness of electronic signatures in the broader contract delivery and signing market, utilizing Adobe Sensei to enhance customer experiences through machine learning and [removed: AI,] [added: AI] and continuing to add new capabilities to our Acrobat, Adobe Scan and Adobe Sign offerings, we can help our customers [added: continue to] migrate away from paper-based [removed: express mailing] [added: processes] and adopt our [removed: solution] [added: solutions] to modernize and digitize document experiences, growing our revenue with this business in the process.

OFFERINGS

We deliver tools and services to empower individuals to create, collaborate and express their vision, transform businesses with compelling, personalized experiences in streamlined workflows and connect communities with new levels of collaboration.

Our Digital Media segment is centered around Adobe Creative Cloud and Adobe Document Cloud, which include Creative Cloud Express, Photoshop, Illustrator, Lightroom, Premiere Pro, Acrobat,

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

Adobe Sign and many more products, offering a variety of tools for creative professionals, communicators and other consumers.

With the creative power of our Digital Media business and the data-based tools of our Digital Experience business, we are able to offer a comprehensive suite of offerings to our customers.

- Publishing and Advertising.

*Opportunity*

In today’s digital world, design and creativity have never been more relevant, providing a significant market opportunity for Adobe in digital media.

In a creator economy that is continually expanding, creators are looking for tools to help them easily make and share unique and beautiful content without complexity.

At the same time, creativity is becoming increasingly collaborative, more critical to every company’s success and more complex.

We believe Adobe is in a strong position to capitalize on these trends with innovation that will accelerate the creative process to empower individuals to create wherever inspiration strikes and enable more effective collaboration between creators and stakeholders.

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

mobile app and gaming development and more.

In this era of connected creativity, we envision Creative Cloud functioning as a creative system, keeping our users connected to everything and everyone they need to make a project successful.

We believe we have significant opportunities to grow by expanding content-first, task-based creativity, advancing every creative category across desktop, web and mobile, expanding 3D and immersive content creation, enabling seamless collaboration across all stakeholders and inspiring and empowering the creative community through sharing and monetization.

With this digital transformation, we have the opportunity to continue to accelerate document productivity with Adobe Document Cloud, modernizing how people view, share and engage with documents.

*Strategy*

With content creation, consumption and monetization happening across all surfaces and media types, we aim to deliver new ways to unleash creativity and accelerate document productivity, and we believe this is an area of significant opportunity for growth through expansion of our customer base.

We aim to achieve this by using data-driven customer engagement, driving product-led growth through innovation to make our creative applications more accessible and easier to learn and meeting customer needs holistically to increase the value of our products.

We are empowering content-first, task-based creativity with our launch of Creative Cloud Express, a web and mobile application with a content- and template-first experience to enable a broad spectrum of users, including novice content creators, communicators and creative professionals, to create, edit and customize content quickly and easily, in December 2021.

We aim to continue to advance every creative category across desktop, web and mobile.

We have delivered our flagship applications, including Photoshop, Illustrator and Lightroom, on desktop and mobile devices to allow users the ability to work from anywhere on any device and to collaborate with stakeholders.

We are building collaboration deeply into our applications and workflows to enable seamless collaboration across stakeholders.

We are taking Creative Cloud to the web, beginning with a public beta version of Photoshop, which will allow Creative Cloud subscribers to make edits to and collaborate on their files directly in their browser.

We are continuing to focus on democratizing 3D and immersive content creation with Adobe Aero and our Substance suite of products, as well as through integrating our Substance 3D capabilities into our other applications.

We continue to introduce new features and solutions in our products, such as auto-masking and new and improved neural filters in Photoshop, auto-captioning in Premiere, adjustment layers and perspective grids in Adobe Fresco and additional motion features in Adobe XD.

We are pursuing new ways to inspire, empower and connect the creative community, such as through our Create Change series, our creative residency program and supporting live, interactive tutorials with creators on Behance.

On October 7, 2021, Adobe acquired Frame.io and began integrating its leading cloud-based video collaboration platform into Adobe Creative Cloud.

With the acquisition of Frame.io, we aim to make the creative process even more collaborative, productive and efficient by enhancing Adobe Creative Cloud with Frame.io’s cloud-native collaboration workflows, while continuing to enable third-party applications.

As a first step in this direction, we are more deeply integrating and enhancing Frame.io’s review and approval capabilities in Premiere Pro and After Effects to deliver a native collaborative platform for video editing.

As part of our strategy, we use a data-driven operating model and our Digital Experience solutions offered through Adobe

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

Our customers have the flexibility to subscribe to over twenty of our Creative Cloud products through a single subscription or, for many of our applications, through various collections of our individual subscriptions to point products.

To better serve our current users and potential users, we offer free and premium levels for certain applications, such as Creative Cloud Express, and targeted packages and suites, such as our Photography Plan and Substance 3D Collection.

With over 50 million searches for PDF-related actions per month, we intend to harness that demand and attract new users to our Document Cloud services through Acrobat web, which allows anyone to quickly access tools to create, edit, convert, sign and compress PDFs through their web browser.

Acrobat Reader is available on mobile devices, with many of its standard features available on the go, and features “Liquid Mode” to automatically reformat PDFs for quick navigation and easier consumption on smaller screens.

Acrobat is also available on the web, delivering quick results for common PDF actions with a single click.

Adobe Scan powers mobile devices with scanning capabilities, transforming paper documents into full-featured PDFs.

*Opportunity*

We help our customers create and deliver the most compelling experiences in streamlined workflows and optimize those experiences for greater return on investment.

Our solutions turn ordinary interactions into valuable digital experiences, across media and devices, anytime, anywhere.

Our customers include creative professionals like photographers, video editors, graphic and experience designers, and 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.

flexible solutions that allow them to reach their full creative potential anytime, anywhere, on any device, and on projects of all types.

By integrating products from each of these areas, our customers are able to utilize a comprehensive suite of solutions and services that no other company currently offers.

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.

Recent technology trends in digital communications continue to provide a significant market opportunity for Adobe in digital media.

In today’s world where the velocity of creation and consumption of digital content is constantly growing, design and creativity have never been more relevant and customers are looking for a way to meet demand with engaging online experiences.

Adobe is in a strong position to capitalize on this opportunity with innovation that will accelerate the creative process across all platforms and devices, deepen engagement with communities and accelerate long-term revenue growth by focusing on cloud-based offerings, which are licensed on a subscription basis.

End users of our creative products work in businesses of all sizes ranging from large publishers, media companies and global enterprises, to smaller design agencies and individual freelancers.

Moreover, our creative products are used to create much of the printed and online information people see, read and

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 creation, such as voice-based prototyping, refined content creation tools, 3D, augmented reality (“AR”), virtual reality and user experience design across devices and platforms.

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.

Creative Cloud members can download and access the latest versions of our creative products such as Photoshop, Illustrator, 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 XD and Adobe Fresco, that have brought new customers into our franchise.

In addition, members can access built-in templates and presets created by the Adobe user community to jumpstart designs and step-by-step interactive tutorials to sharpen their skills and get up to speed quickly.

Through Creative Cloud, members can access online services to sync, store and share files across users’ devices, access marketplace, social and community-based features within our Adobe Stock and Behance services, and create apps and websites, all at affordable subscription pricing.

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.

One part of our strategy is Adobe Sensei, a proprietary framework and set of intelligent services for dramatically improving the design and delivery of digital experiences.

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 AI and machine learning framework to help customers discover hidden opportunities, reduce tedious processes and offer relevant experiences to every customer.

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

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

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

Users can collaborate on documents with 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 app on any device.

Acrobat provides essential digital document capabilities and services across desktop, mobile devices and the web to help knowledge workers 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 family and its innovative cloud services, we have extended the capabilities of our Sensei-powered document 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, easily read and edit PDFs on tablets and mobile devices with the Acrobat Reader app on iOS and Android, and turn slow, manual signing processes into automated experiences by collecting signatures with Adobe Sign.

*Digital Media Strategy*

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 stories on a variety of surfaces and platforms, expanding into new categories and technologies like immersive 3D and AR, making the creative process more iterative and collaborative with 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 community with live tutorials and our social communities like Behance.

We will continue to deepen our relationship with existing users through data-driven customer engagement, meeting their needs holistically and delivering additional features and increased value, by offering products and features powered by AI and machine learning through Adobe Sensei.

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.

We are embracing new frontiers in technology and creativity such as immersive 3D and AR experiences with Adobe Aero and our Substance suite of products.

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

With our Adobe Stock and Adobe Fonts services, we offer marketplaces that are built into our Creative Cloud products for Creative Cloud subscribers to purchase stock content and fonts.

To target new customers and better address the needs of our existing customers, we will continue to invest in driving innovation to maintain the leadership position that we have established.

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

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.

The material set forth in the section titled “Legal Proceedings” in Note 16 of our Notes to Consolidated Financial Statements is incorporated herein by reference.

In connection with disputes relating to the validity or alleged infringement of third-party intellectual property rights, including patent rights, we have been, are currently and may in the future be subject to claims, negotiations or complex, protracted litigation.

Intellectual property disputes and litigation may be very costly and can be disruptive to our business operations by diverting the attention and energies of management and key technical personnel.

Although we have successfully defended or resolved past litigation and disputes, we may not prevail in any ongoing or future litigation and disputes.

Third-party intellectual property disputes could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from licensing certain of our products or offering certain of our services, subject us to injunctions restricting our sale of products or services, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy indemnification commitments with our customers including contractual provisions under various license arrangements and service agreements.

In addition to intellectual property disputes, we are subject to legal proceedings, claims and investigations in the ordinary course of business, including claims relating to commercial, employment and other matters.

Some of these disputes and legal proceedings may include speculative claims for substantial or indeterminate amounts of damages.

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

Based upon this assessment, we then evaluate disclosure requirements and whether to accrue for such claims in our financial statements.

This determination is then reviewed and discussed with the Audit Committee of the Board of Directors.

We make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case.

Unless otherwise specifically disclosed in our Consolidated Financial Statements and notes thereto, we have determined that no provision for liability or disclosure is required related to any claim against us because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial.

All legal costs associated with litigation are expensed as incurred.

Litigation is inherently unpredictable.

However, we believe that we have valid defenses with respect to the legal matters pending against us.

It is possible, nevertheless, that our consolidated financial position, cash flows or results of operations could be negatively affected by an unfavorable resolution of one or more of such proceedings, claims or investigations.

In connection with our piracy conversion efforts, conducted both internally and through organizations such as the Business Software Alliance, from time to time we undertake litigation against alleged copyright infringers.

Such lawsuits may lead to counter-claims alleging improper use of litigation or violation of other laws.

We believe we have valid defenses with respect to such counter-claims; however, it is possible that our consolidated financial position, cash flows or results of operations could be negatively affected in any particular period by the resolution of one or more of these counter-claims.

For the fiscal year ended [removed: November 27, 2020][added: December 3, 2021]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting [removed: company] [added: company,] or an emerging growth company.

See the definitions of “large accelerated [removed: filer”,] [added: filer,”] “accelerated [removed: filer”,] [added: filer,”] “smaller reporting [removed: company”,] [added: company,”] and “emerging growth company” in Rule 12b-2 of the Exchange Act.

The aggregate market value of the registrant’s common stock, $0.0001 par value per share, held by non-affiliates of the registrant on [removed: May 29, 2020,] [added: June 4, 2021,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $143.27] [added: $188.31] billion (based on the closing sales price of the registrant’s common stock on that date).

As of January [removed: 8, 2021, 478.7] [added: 14, 2022, 471.7] 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: 2021] [added: 2022] Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the end of the fiscal year ended [removed: November 27, 2020,] [added: December 3, 2021,] are incorporated by reference in Part III hereof.

| Item 1. | | | [removed: [Business](#ib32ef6f531ec46d8a6555201235bf70f_13)] [added: [Business](#i43a0f166e9174c8d9d706b477ac3a79e_13)] | | | [removed: [3](#ib32ef6f531ec46d8a6555201235bf70f_13)] [added: [3](#i43a0f166e9174c8d9d706b477ac3a79e_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#ib32ef6f531ec46d8a6555201235bf70f_49)] [added: Factors](#i43a0f166e9174c8d9d706b477ac3a79e_49)] | | | [removed: [24](#ib32ef6f531ec46d8a6555201235bf70f_49)] [added: [21](#i43a0f166e9174c8d9d706b477ac3a79e_49)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#ib32ef6f531ec46d8a6555201235bf70f_52)] [added: Comments](#i43a0f166e9174c8d9d706b477ac3a79e_52)] | | | [removed: [38](#ib32ef6f531ec46d8a6555201235bf70f_52)] [added: [36](#i43a0f166e9174c8d9d706b477ac3a79e_52)] | | |

| Item 2. | | | [removed: [Properties](#ib32ef6f531ec46d8a6555201235bf70f_55)] [added: [Properties](#i43a0f166e9174c8d9d706b477ac3a79e_55)] | | | [removed: [38](#ib32ef6f531ec46d8a6555201235bf70f_55)] [added: [36](#i43a0f166e9174c8d9d706b477ac3a79e_55)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#ib32ef6f531ec46d8a6555201235bf70f_58)] [added: Proceedings](#i43a0f166e9174c8d9d706b477ac3a79e_61)] | | | [removed: [39](#ib32ef6f531ec46d8a6555201235bf70f_58)] [added: [36](#i43a0f166e9174c8d9d706b477ac3a79e_61)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#ib32ef6f531ec46d8a6555201235bf70f_61)] [added: Disclosures](#i43a0f166e9174c8d9d706b477ac3a79e_64)] | | | [removed: [39](#ib32ef6f531ec46d8a6555201235bf70f_61)] [added: [36](#i43a0f166e9174c8d9d706b477ac3a79e_64)] | | |

| Item 5. | | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ib32ef6f531ec46d8a6555201235bf70f_67)] [added: Securities](#i43a0f166e9174c8d9d706b477ac3a79e_70)] | | | [removed: [40](#ib32ef6f531ec46d8a6555201235bf70f_67)] [added: [37](#i43a0f166e9174c8d9d706b477ac3a79e_70)] | | |

| Item 7. | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ib32ef6f531ec46d8a6555201235bf70f_73)] [added: Operations](#i43a0f166e9174c8d9d706b477ac3a79e_76)] | | | [removed: [42](#ib32ef6f531ec46d8a6555201235bf70f_73)] [added: [38](#i43a0f166e9174c8d9d706b477ac3a79e_76)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#ib32ef6f531ec46d8a6555201235bf70f_106)] [added: Risk](#i43a0f166e9174c8d9d706b477ac3a79e_109)] | | | [removed: [58](#ib32ef6f531ec46d8a6555201235bf70f_106)] [added: [52](#i43a0f166e9174c8d9d706b477ac3a79e_109)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#ib32ef6f531ec46d8a6555201235bf70f_109)] [added: Data](#i43a0f166e9174c8d9d706b477ac3a79e_112)] | | | [removed: [61](#ib32ef6f531ec46d8a6555201235bf70f_109)] [added: [54](#i43a0f166e9174c8d9d706b477ac3a79e_112)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ib32ef6f531ec46d8a6555201235bf70f_208)] [added: Disclosure](#i43a0f166e9174c8d9d706b477ac3a79e_202)] | | | [removed: [110](#ib32ef6f531ec46d8a6555201235bf70f_208)] [added: [95](#i43a0f166e9174c8d9d706b477ac3a79e_202)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#ib32ef6f531ec46d8a6555201235bf70f_211)] [added: Procedures](#i43a0f166e9174c8d9d706b477ac3a79e_205)] | | | [removed: [110](#ib32ef6f531ec46d8a6555201235bf70f_211)] [added: [95](#i43a0f166e9174c8d9d706b477ac3a79e_205)] | | |

| Item 9B. | | | [Other [removed: Information](#ib32ef6f531ec46d8a6555201235bf70f_214)] [added: Information](#i43a0f166e9174c8d9d706b477ac3a79e_208)] | | | [removed: [110](#ib32ef6f531ec46d8a6555201235bf70f_214)] [added: [95](#i43a0f166e9174c8d9d706b477ac3a79e_208)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#ib32ef6f531ec46d8a6555201235bf70f_220)] [added: Governance](#i43a0f166e9174c8d9d706b477ac3a79e_214)] | | | [removed: [111](#ib32ef6f531ec46d8a6555201235bf70f_220)] [added: [96](#i43a0f166e9174c8d9d706b477ac3a79e_214)] | | |

| Item 11. | | | [Executive [removed: Compensation](#ib32ef6f531ec46d8a6555201235bf70f_223)] [added: Compensation](#i43a0f166e9174c8d9d706b477ac3a79e_217)] | | | [removed: [111](#ib32ef6f531ec46d8a6555201235bf70f_223)] [added: [96](#i43a0f166e9174c8d9d706b477ac3a79e_217)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ib32ef6f531ec46d8a6555201235bf70f_226)] [added: Matters](#i43a0f166e9174c8d9d706b477ac3a79e_220)] | | | [removed: [111](#ib32ef6f531ec46d8a6555201235bf70f_226)] [added: [96](#i43a0f166e9174c8d9d706b477ac3a79e_220)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#ib32ef6f531ec46d8a6555201235bf70f_229)] [added: Independence](#i43a0f166e9174c8d9d706b477ac3a79e_223)] | | | [removed: [111](#ib32ef6f531ec46d8a6555201235bf70f_229)] [added: [96](#i43a0f166e9174c8d9d706b477ac3a79e_223)] | | |

| Item 14. | | | [Principal Accounting Fees and [removed: Services](#ib32ef6f531ec46d8a6555201235bf70f_232)] [added: Services](#i43a0f166e9174c8d9d706b477ac3a79e_226)] | | | [removed: [111](#ib32ef6f531ec46d8a6555201235bf70f_232)] [added: [96](#i43a0f166e9174c8d9d706b477ac3a79e_226)] | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#ib32ef6f531ec46d8a6555201235bf70f_238)] [added: Schedules](#i43a0f166e9174c8d9d706b477ac3a79e_232)] | | | [removed: [111](#ib32ef6f531ec46d8a6555201235bf70f_238)] [added: [96](#i43a0f166e9174c8d9d706b477ac3a79e_232)] | | |

*In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements, including statements regarding product plans, future growth, market opportunities, strategic initiatives, industry positioning, customer acquisition and retention, the amount of annualized recurring revenue, revenue growth and [removed: the] anticipated [removed: impact] [added: impacts] on our business of the [added: ongoing] COVID-19 pandemic and related public health measures.

Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section [removed: entitled] [added: titled] “Risk Factors” in Part I, Item 1A of this report.

[removed: You should carefully review the] [added: The] risks described herein and in other documents we file from time to time with the U.S. Securities and Exchange Commission (the “SEC”), including our Quarterly Reports on Form 10-Q to be filed in [removed: 2021.][added: fiscal 2022, should be carefully reviewed.]

[removed: You] [added: Undue reliance] should not [removed: place undue reliance] [added: be placed] on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K.

| Item 6 | | | [\[Reserved\]](#i43a0f166e9174c8d9d706b477ac3a79e_73) | | | [37](#i43a0f166e9174c8d9d706b477ac3a79e_73) | | |

| Item 16. | | | [Form 10-K Summary](#i43a0f166e9174c8d9d706b477ac3a79e_238) | | | [99](#i43a0f166e9174c8d9d706b477ac3a79e_238) | | |

| [Signatures](#i43a0f166e9174c8d9d706b477ac3a79e_241) | | | | | | [100](#i43a0f166e9174c8d9d706b477ac3a79e_241) | | |

| [Summary of Trademarks](#i43a0f166e9174c8d9d706b477ac3a79e_244) | | | | | | [102](#i43a0f166e9174c8d9d706b477ac3a79e_244) | | |

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

| Item 6 | | | [Selected Financial Data](#ib32ef6f531ec46d8a6555201235bf70f_70) | | | [41](#ib32ef6f531ec46d8a6555201235bf70f_70) | | |

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

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

We own a substantial portion of our San Jose, California properties which we use for research, product development, sales, [removed: marketing,] [added: 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, [removed: marketing,] [added: 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, [removed: sales,] [added: 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 [removed: 0.6] [added: 0.5] million square feet, respectively.

Additionally, we have ongoing building construction in San Jose, California and Bangalore, India which are currently targeted for completion in fiscal [removed: 2023.][added: 2022 and 2023, respectively.]

[removed: Beginning in March 2020,] [added: During fiscal 2021,] our employees across all geographic regions [removed: have shifted] [added: continued] to [removed: working] [added: work] from home due to the [added: COVID-19] pandemic.

[removed: Our] [added: As conditions continue to fluctuate around the world, our] focus remains on promoting employee health and safety as we carefully evaluate reopening plans and timelines.

As of [removed: November 27, 2020,] [added: December 3, 2021,] we have not terminated any significant lease arrangements.

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

[removed: *See] [added: *[See] Note 18 [removed: of Part II, Item 8 titled “Notes] [added: of](#i43a0f166e9174c8d9d706b477ac3a79e_190) [o](#i43a0f166e9174c8d9d706b477ac3a79e_190)[ur](#i43a0f166e9174c8d9d706b477ac3a79e_190) [](#i43a0f166e9174c8d9d706b477ac3a79e_190)[N](#i43a0f166e9174c8d9d706b477ac3a79e_190)[otes] to Consolidated Financial [removed: Statements” for] [added: Statements](#i43a0f166e9174c8d9d706b477ac3a79e_190) [for] further information regarding our lease [removed: obligations.*][added: obligations.](#i43a0f166e9174c8d9d706b477ac3a79e_190)*]

Starting in June 2021, we began a phased reopening of all of our U.S. offices and certain of our international offices in areas with sustained low infection rates, and invited fully vaccinated employees located near those reopened offices to return to the office on a voluntary basis.

While all our U.S. offices, including our headquarters in San Jose, California, are now open, our reopened offices are operating at reduced capacity with heightened health and safety protocols in place.

We carefully assess, and reassess, conditions on a case-by-case basis to determine when employees can safely return to our offices.

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

According to the records of our transfer agent, there were [removed: 974] [added: 940] holders of record of our common stock on January [removed: 8, 2021.][added: 14, 2022.]

Below is a summary of stock repurchases for the three months ended [removed: November 27, 2020.][added: December 3, 2021.]

*[See Note 14 of our Notes to Consolidated Financial Statements for information regarding our stock repurchase [removed: programs.](#ib32ef6f531ec46d8a6555201235bf70f_184)*][added: programs.](#i43a0f166e9174c8d9d706b477ac3a79e_178)*]

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

| Beginning repurchase [removed: authority(1)] [added: authority] | | | | | | | | | | | | | | | | | | | | | | | | $ | [removed: 3,066] [added: 14,434] | | | | |

| September [removed: 26] [added: 4] — October [removed: 23, 2020] [added: 1, 2021] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Shares repurchased | | | | | | 0.6 | | | | | | $ | [removed: 471.53] [added: 596.55] | | | | | 0.6 | | | | | | $ | [removed: (283)] [added: (333)] | | (2) | | |

| Total | | | | | | 1.6 | | | | | | | | | | | | 1.6 | | | | | | $ | [removed: 2,305] [added: 13,434] | | | | |

(1)In [removed: May 2018,] [added: December 2020,] the Board of Directors granted authority to repurchase up to [removed: $8] [added: $15] billion in [added: our] common stock through the end of fiscal [removed: 2021.][added: 2024.]

(2)In September [removed: 2020,] [added: 2021,] we entered into a structured stock repurchase agreement with a large financial institution whereupon we provided them with a prepayment of [removed: $850 million.][added: $1 billion.]

As of [removed: November 27, 2020,] [added: December 3, 2021,] approximately [removed: $255] [added: $334] million of the prepayment remained under this agreement.

| Shares repurchased | | | | | | 0.5 | | | | | | $ | 656.47 | | | | | 0.5 | | | | | | $ | (334) | | | | |

| October 2 — October 29, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| October 30 — December 3, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Shares repurchased | | | | | | 0.5 | | | | | | $ | 657.07 | | | | | 0.5 | | | | | | $ | (333) | | (2) | | |

| August 29 — September 25, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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

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

| October 24 — November 27, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

The following selected consolidated financial data is derived from our Consolidated Financial Statements.

As our historical operating results are not necessarily indicative of future operating results, this data should be read in conjunction with the Consolidated Financial Statements and notes thereto, and with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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.

Similarly, on December 1, 2018, the beginning of our fiscal year 2019, we adopted the FASB’s ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), using the modified retrospective method of transition.

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.

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

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

| *(in millions, except per share amounts and employee data)* | | | Fiscal Years | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2020 | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016(2) | | |

| Operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 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 | |

| Net income per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic | | | $ | 10.94 | | | | | $ | 6.07 | | | | | $ | 5.28 | | | | | $ | 3.43 | | | | | $ | 2.35 | |

| Diluted | | | $ | 10.83 | | | | | $ | 6.00 | | | | | $ | 5.20 | | | | | $ | 3.38 | | | | | $ | 2.32 | |

| Shares used to compute basic net income per share | | | 481 | | | | | | 486 | | | | | | 491 | | | | | | 494 | | | | | | 498 | | |

| Shares used to compute diluted net income per share | | | 485 | | | | | | 492 | | | | | | 498 | | | | | | 501 | | | | | | 504 | | |

| Financial position: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| 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, current | | | $ | — | | | | | $ | 3,149 | | | | | $ | — | | | | | $ | — | | | | | $ | — | |

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

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

| Additional data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Worldwide employees | | | 22,516 | | | | | | 22,634 | | | | | | 21,357 | | | | | | 17,973 | | | | | | 15,706 | | |

_________________________________________

(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.

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.

Fiscal 2016 was a 53-week fiscal year compared with the other periods presented which were 52-week fiscal years.

| [Consolidated Balance [removed: Sheets](#ib32ef6f531ec46d8a6555201235bf70f_112)] [added: Sheets](#i43a0f166e9174c8d9d706b477ac3a79e_115)] | | | [removed: [62](#ib32ef6f531ec46d8a6555201235bf70f_112)] [added: [55](#i43a0f166e9174c8d9d706b477ac3a79e_115)] | | |

| [Consolidated Statements of [removed: Income](#ib32ef6f531ec46d8a6555201235bf70f_118)] [added: Income](#i43a0f166e9174c8d9d706b477ac3a79e_118)] | | | [removed: [63](#ib32ef6f531ec46d8a6555201235bf70f_118)] [added: [56](#i43a0f166e9174c8d9d706b477ac3a79e_118)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#ib32ef6f531ec46d8a6555201235bf70f_121)] [added: Income](#i43a0f166e9174c8d9d706b477ac3a79e_121)] | | | [removed: [64](#ib32ef6f531ec46d8a6555201235bf70f_121)] [added: [57](#i43a0f166e9174c8d9d706b477ac3a79e_121)] | | |

| [Consolidated Statements of Stockholders' [removed: Equity](#ib32ef6f531ec46d8a6555201235bf70f_124)] [added: Equity](#i43a0f166e9174c8d9d706b477ac3a79e_124)] | | | [removed: [65](#ib32ef6f531ec46d8a6555201235bf70f_124)] [added: [58](#i43a0f166e9174c8d9d706b477ac3a79e_124)] | | |

| [Consolidated Statements of Cash [removed: Flows](#ib32ef6f531ec46d8a6555201235bf70f_127)] [added: Flows](#i43a0f166e9174c8d9d706b477ac3a79e_127)] | | | [removed: [66](#ib32ef6f531ec46d8a6555201235bf70f_127)] [added: [59](#i43a0f166e9174c8d9d706b477ac3a79e_127)] | | |

| [Notes to Consolidated Financial [removed: Statements](#ib32ef6f531ec46d8a6555201235bf70f_130)] [added: Statements](#i43a0f166e9174c8d9d706b477ac3a79e_130)] | | | [removed: [67](#ib32ef6f531ec46d8a6555201235bf70f_130)] [added: [60](#i43a0f166e9174c8d9d706b477ac3a79e_130)] | | |

| [Report of KPMG LLP, Independent Registered Public Accounting [removed: Firm](#ib32ef6f531ec46d8a6555201235bf70f_205)] [added: Firm](#i43a0f166e9174c8d9d706b477ac3a79e_199)] | | | [removed: [107](#ib32ef6f531ec46d8a6555201235bf70f_205)] [added: [93](#i43a0f166e9174c8d9d706b477ac3a79e_199)] | | |

| | | | [added: December 3, 2021 | | | | | |] November 27, 2020 | | | | | | November 29, 2019 | | |

| Cash and cash equivalents | | | $ | [removed: 4,478] [added: 3,844] | | | | | $ | [removed: 2,650] [added: 4,478] | |

| Short-term investments | | | [removed: 1,514] [added: 1,954] | | | | | | [removed: 1,527] [added: 1,514] | | |

| Trade receivables, net of allowances for doubtful accounts of [removed: $21] [added: $16] and of [removed: $10,] [added: $21,] respectively | | | [removed: 1,398] [added: 1,878] | | | | | | [removed: 1,535] [added: 1,398] | | |

| Prepaid expenses and other current assets | | | [removed: 756] [added: 993] | | | | | | [removed: 783] [added: 756] | | |

| Total current assets | | | [removed: 8,146] [added: 8,669] | | | | | | [removed: 6,495] [added: 8,146] | | |

| Property and equipment, net | | | [removed: 1,517] [added: 1,673] | | | | | | [removed: 1,293] [added: 1,517] | | |

| Operating lease right-of-use assets, net | | | [removed: 487] [added: 443] | | | | | | [removed: —] [added: 487] | | |

| Goodwill | | | [added: | | | $ | 10,691 | | | | | $ | — | | | | | $ | 51 | | | | | $ |] 10,742 | | | | | [added: $] | [removed: 10,691] [added: 1,960] | | | [added: | | $ | (34) | | | | | $ | 12,668 | |]

| Other intangibles, net | | | [removed: 1,359] [added: 1,820] | | | | | | [removed: 1,721] [added: 1,359] | | |

| Deferred income taxes | | | [removed: 1,370] [added: 1,085] | | | | | | [removed: —] [added: 1,370] | | |

| Other assets | | | [removed: 663] [added: 883] | | | | | | [removed: 562] [added: 663] | | |

| Total assets | | | $ | [removed: 24,284] [added: 27,241] | | | | | $ | [removed: 20,762] [added: 24,284] | |

| Trade payables | | | $ | [removed: 306] [added: 312] | | | | | $ | [removed: 209] [added: 306] | |

| Accrued expenses | | | [removed: 1,422] [added: 1,736] | | | | | | [removed: 1,399] [added: 1,422] | | |

| Deferred revenue | | | [removed: 3,629] [added: 4,733] | | | | | | [removed: 3,378] [added: 3,629] | | |

| Income taxes payable | | | [removed: 63] [added: 54] | | | | | | [removed: 56] [added: 63] | | |

| Operating lease liabilities | | | [removed: 92] [added: 97] | | | | | | [removed: —] [added: 92] | | |

| Total current liabilities | | | [removed: 5,512] [added: 6,932] | | | | | | [removed: 8,191] [added: 5,512] | | |

| Debt | | | [removed: 4,117] [added: 4,123] | | | | | | [removed: 989] [added: 4,117] | | |

| Deferred revenue | | | [removed: 130] [added: 145] | | | | | | [removed: 123] [added: 130] | | |

| Income taxes payable | | | [removed: 529] [added: 534] | | | | | | [removed: 616] [added: 529] | | |

| Deferred income taxes | | | [removed: 10] [added: 5] | | | | | | [removed: 140] [added: 10] | | |

| Operating lease liabilities | | | [removed: 499] [added: 453] | | | | | | [removed: —] [added: 499] | | |

| Other liabilities | | | [removed: 223] [added: 252] | | | | | | [removed: 173] [added: 223] | | |

| Total liabilities | | | [removed: 11,020] [added: 12,444] | | | | | | [removed: 10,232] [added: 11,020] | | |

| Common stock, $0.0001 par value; 900 shares authorized; 601 shares issued; [removed: 479] [added: 475] and [removed: 483] [added: 479] shares outstanding, respectively | | | — | | | | | | — | | |

| Additional paid-in-capital | | | [removed: 7,357] [added: 8,428] | | | | | | [removed: 6,504] [added: 7,357] | | |

| Retained earnings | | | [removed: 19,611] [added: 23,905] | | | | | | [removed: 14,829] [added: 19,611] | | |

| Accumulated other comprehensive income (loss) | | | [removed: (158)] [added: (137)] | | | | | | [removed: (188)] [added: (158)] | | |

| Treasury stock, at cost [removed: (122] [added: (126] and [removed: 118] [added: 122] shares, respectively) | | | [removed: (13,546)] [added: (17,399)] | | | | | | [removed: (10,615)] [added: (13,546)] | | |

| Total stockholders’ equity | | | [removed: 13,264] [added: 14,797] | | | | | | [removed: 10,530] [added: 13,264] | | |

| Total liabilities and stockholders’ equity | | | $ | [removed: 24,284] [added: 27,241] | | | | | $ | [removed: 20,762] [added: 24,284] | |

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

| | | | December 3, 2021 | | | | | | November 27, 2020 | | |

| Goodwill | | | 12,668 | | | | | | 10,742 | | |

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

| Repurchases of common stock | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (10) | | | | | | (2,750) | | | | | | (2,750) | | |

| Repurchases of common stock | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (8) | | | | | | (3,050) | | | | | | (3,050) | | |

| Repurchases of common stock | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (7) | | | | | | (3,950) | | | | | | (3,950) | | |

| Balances at December 3, 2021 | | | | | | 601 | | | | | | $ | — | | | | | $ | 8,428 | | | | | $ | 23,905 | | | | | $ | (137) | | | | | (126) | | | | | | $ | (17,399) | | | | | $ | 14,797 | |

[Table of Content](#i43a0f166e9174c8d9d706b477ac3a79e_7)[s](#i43a0f166e9174c8d9d706b477ac3a79e_7)

| | | | December 3, 2021 | | | | | | November 27, 2020 | | | | | | November 29, 2019 | | |

| Net income | | | $ | 4,822 | | | | | $ | 5,260 | | | | | $ | 2,951 | |

| Repurchases of common stock | | | (3,950) | | | | | | (3,050) | | | | | | (2,750) | | |

Our financial results for fiscal 2021 benefited from an extra week in the first quarter of fiscal 2021 due to our 52/53 week financial calendar whereby fiscal 2021 is a 53-week year compared with fiscal 2020 and 2019 which were 52-week years.

We enter into contracts that can include various combinations of products and services, which may be

each other, and therefore part of a single performance obligation, may require significant judgment.

percent of revenue to determine a historical reserve rate.

In performing our goodwill impairment test, we first perform a qualitative assessment, which requires that we consider

Prepayments made for repurchases of our common stock are classified as treasury stock on our Consolidated Balance Sheets and only shares physically delivered to us at period ends are excluded from the computation of earnings per share.

We also enter into collateral security agreements with certain of our counterparties

On June 16, 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326).

The FASB subsequently issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments.

To date, there have been no recent accounting pronouncements not yet effective that have significance, or potential significance, to our Consolidated Financial Statements.

Our customers include creative professionals, including photographers, video editors, graphic and experience designers and game developers, communicators, including content creators, students, marketers and knowledge workers, and consumers.

- *Digital Experience*—Our Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize and optimize customer

experiences that span from analytics to commerce.

- *Publishing and Advertising*—Our Publishing and Advertising segment contains legacy products and services that address diverse market opportunities, including eLearning solutions, technical document publishing, web conferencing, document and forms platform, web application development, high-end printing and our Adobe Advertising Cloud offerings.

| Revenue | | | $ | 11,520 | | | | | $ | 3,867 | | | | | $ | 398 | | | | | $ | 15,785 | |

| Cost of revenue | | | 429 | | | | | | 1,321 | | | | | | 115 | | | | | | 1,865 | | |

| Gross profit | | | $ | 11,091 | | | | | $ | 2,546 | | | | | $ | 283 | | | | | $ | 13,920 | |

We generally categorize revenue by geographic area based on where the customer manages their utilization of our offerings.

| United States | | | | | | $ | 8,104 | | | | | $ | 6,745 | | | | | $ | 5,903 | |

| Other | | | | | | 892 | | | | | | 709 | | | | | | 603 | | |

| Total Digital Media revenue | | | | | | $ | 11,520 | | | | | $ | 9,233 | | | | | $ | 7,707 | |

We maintain general reserves on a collective basis by considering factors such as historical experience, credit-worthiness, the age of the trade receivable balances, current economic conditions and a reasonable and supportable forecast of future economic conditions.

| Adjustments to reserve balance | | | | | | (3) | | | | | | 31 | | | | | | 5 | | |

| Write-offs, net of recoveries | | | | | | (5) | | | | | | (20) | | | | | | (10) | | |

invoice timing, size and new business linearity within the quarter.

respectively.

| | | | | | |

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

ADOBE INC.

| Debt | | | — | | | | | | 3,149 | | |

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

| Purchase of treasury stock | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (9) | | | | | | (2,050) | | | | | | (2,050) | | |

| Purchase of treasury stock | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (10) | | | | | | (2,750) | | | | | | (2,750) | | |

| Purchase of treasury stock | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (8) | | | | | | (3,050) | | | | | | (3,050) | | |

| Purchases of treasury stock | | | (3,050) | | | | | | (2,750) | | | | | | (2,050) | | |

| Non-cash investing activities: | | | | | | | | | | | | | | | | | |

| Issuance of common stock and stock awards assumed in business acquisitions | | | $ | — | | | | | $ | — | | | | | $ | 3 | |

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 created and may continue to create significant uncertainty in the macroeconomic environment which, in addition to other unforeseen effects of this pandemic, may adversely impact our results of operations.

As a result, most of our estimates and assumptions may require increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve and additional information becomes available, our estimates may change materially in future periods.

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

Fiscal years 2020, 2019 and 2018 were 52-week years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 our Advertising Cloud offerings 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.

Further, we reclassified revenue and related cost of revenue of our Advertising Cloud offerings from subscription to services and other on our Consolidated Statements of Income.

Financial information for all fiscal years presented has been updated in our Consolidated Financial Statements to reflect these reclassifications.

If the change was made at the beginning of fiscal 2020, reported revenue and cost of revenue in our income statements for each quarter of fiscal 2020 would have been as follows:

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

| | | | 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | Quarter Ended | | | | | | | | | | | | | | | | | | | | | | | | Year Ended | | |

| *(in millions)* | | | February 28 | | | | | | May 29 | | | | | | August 28 | | | | | | November 27 | | | | | | November 27 | | |

| Subscription | | | $ | 2,732 | | | | | $ | 2,831 | | | | | $ | 2,948 | | | | | $ | 3,115 | | | | | $ | 11,626 | |

| Product | | | 143 | | | | | | 128 | | | | | | 109 | | | | | | 127 | | | | | | 507 | | |

| Services and other | | | 216 | | | | | | 169 | | | | | | 168 | | | | | | 182 | | | | | | 735 | | |

| Total revenue | | | 3,091 | | | | | | 3,128 | | | | | | 3,225 | | | | | | 3,424 | | | | | | 12,868 | | |

| Cost of revenue: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Subscription | | | 274 | | | | | | 269 | | | | | | 282 | | | | | | 283 | | | | | | 1,108 | | |

| Product | | | 7 | | | | | | 9 | | | | | | 10 | | | | | | 10 | | | | | | 36 | | |

| Services and other | | | 171 | | | | | | 137 | | | | | | 135 | | | | | | 135 | | | | | | 578 | | |

| Total cost of revenue | | | $ | 452 | | | | | $ | 415 | | | | | $ | 427 | | | | | $ | 428 | | | | | $ | 1,722 | |

Some of our enterprise license arrangements allow customers to commit non-cancellable funds.

We exclude from the transaction price sales and other taxes collected from customers on behalf of the relevant government authority.

Most of our products are delivered electronically, however in instances where shipping and handling costs are incurred, we treat these amounts as costs to fulfill the contract and they are not considered a performance obligation and the associated fees are not included in the transaction price.

document workflow solution that operates seamlessly across multiple devices and teams.

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 [removed: November 27, 2020.][added: December 3, 2021.]

Based on their evaluation as of [removed: November 27, 2020,] [added: December 3, 2021,] 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 [removed: November 27, 2020.][added: December 3, 2021.]

Our management has concluded that, as of [removed: November 27, 2020,] [added: December 3, 2021,] our internal controls over financial reporting [removed: is] [added: are] effective based on these criteria.

There were no changes in our internal controls over financial reporting during the quarter ended [removed: November 27, 2020] [added: December 3, 2021] that have materially affected, or are reasonably likely to materially [removed: affect] [added: affect,] our internal controls over financial reporting.

On November 30, 2019, we implemented new and modified existing internal controls based on the adoption of the new leases standard.

This resulted in changes to our processes related to lease accounting and underlying control activities, including our information systems.

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: 2021] [added: 2022] Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for the Company’s [removed: 2021] [added: 2022] Annual Meeting of Stockholders [removed: (“2021] [added: (“2022] Proxy Statement”) is incorporated herein by reference to our [removed: 2021] [added: 2022] Proxy Statement.

The [removed: 2021] [added: 2022] 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, [removed: [see “Executive Officers” at the end of Part] [added: [see](#i43a0f166e9174c8d9d706b477ac3a79e_46) [the section titled](#i43a0f166e9174c8d9d706b477ac3a79e_46) [“Executive Officers”](#i43a0f166e9174c8d9d706b477ac3a79e_46) in [Part] I, Item [removed: 1](#ib32ef6f531ec46d8a6555201235bf70f_46)] [added: 1](#i43a0f166e9174c8d9d706b477ac3a79e_46)] of this report.

The information required by this Item 11 of Form 10-K is incorporated herein by reference to our [removed: 2021] [added: 2022] Proxy Statement.

The information required by this Item 12 of Form 10-K is incorporated herein by reference to our [removed: 2021] [added: 2022] Proxy Statement.

The information required by this Item 13 of Form 10-K is incorporated herein by reference to our [removed: 2021] [added: 2022] Proxy Statement.

The information required by this Item 14 of Form 10-K is incorporated herein by reference to our [removed: 2021] [added: 2022] Proxy Statement.

[See Index to Consolidated Financial Statements in Part II, Item [removed: 8](#ib32ef6f531ec46d8a6555201235bf70f_109)] [added: 8](#i43a0f166e9174c8d9d706b477ac3a79e_112)] of this Form 10-K.

| 3.3 | | | | | | [Amended and Restated [removed: Bylaws](http://www.sec.gov/Archives/edgar/data/796343/000079634318000168/exhibit32.htm)] [added: Bylaws](http://www.sec.gov/Archives/edgar/data/0000796343/000079634322000027/adbeex31amendedandrestated.htm)] | | | | | | 8-K | | | | | | [removed: 10/9/18] [added: 1/18/22] | | | | | | [removed: 3.2] [added: 3.1] | | | | | | 000-15175 | | | | | | | | |

| 4.5 | | | | | | [Description of Adobe’s Common [removed: Stock](http://www.sec.gov/Archives/edgar/data/796343/000079634320000013/adbeex45fy19.htm)] [added: Stock](https://www.sec.gov/Archives/edgar/data/796343/000079634322000032/adbeex45fy21.htm)] | | | | | | [removed: 10-K] | | | | | | [removed: 1/21/20] | | | | | | [removed: 4.5] | | | | | | [removed: 000-15175] | | | | | | [added: X] | | |

| 10.1 | | | | | | [2020 Employee Stock Purchase Plan, as [removed: amended*](https://www.sec.gov/Archives/edgar/data/796343/000079634321000004/adbeex101fy20.htm)] [added: amended*](http://www.sec.gov/Archives/edgar/data/796343/000079634321000004/adbeex101fy20.htm)] | | | | | | [added: 10-K] | | | | | | [added: 1/15/21] | | | | | | [added: 10.1] | | | | | | [added: 000-15175] | | | | | | [removed: X] | | |

| 10.2B | | | | | | [Form of [removed: Stock Option] [added: RSU Grant Notice and Award] Agreement [removed: used in connection with the] [added: pursuant to] 2003 Equity Incentive [removed: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000110465910063553/a10-23847_1ex99d4.htm)] [added: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634318000039/adbeex1068-k126.htm)] | | | | | | 8-K | | | | | | [removed: 12/20/10] [added: 1/26/18] | | | | | | [removed: 99.4] [added: 10.6] | | | | | | 000-15175 | | | | | | | | |

| 10.2C | | | | | | [Form of [removed: RSU] [added: Restricted Stock Unit] Grant Notice and Award Agreement pursuant to 2003 Equity Incentive [removed: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634318000039/adbeex1068-k126.htm)] [added: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000024/adbeex1058-k128.htm)] | | | | | | 8-K | | | | | | [removed: 1/26/18] [added: 1/28/19] | | | | | | [removed: 10.6] [added: 10.5] | | | | | | 000-15175 | | | | | | | | |

| [removed: 10.2D] [added: 10.3H] | | | | | | [Form of [added: Director Grant] Restricted Stock Unit Grant Notice and Award Agreement pursuant to [removed: 2003] [added: 2019] Equity Incentive [removed: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000024/adbeex1058-k128.htm)] [added: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000142/adbeex1035cq219.htm)] | | | | | | [removed: 8-K] [added: 10-Q] | | | | | | [removed: 1/28/19] [added: 6/26/19] | | | | | | [removed: 10.5] [added: 10.35C] | | | | | | 000-15175 | | | | | | | | |

| [removed: 10.2F] [added: 10.2D] | | | | | | [removed: [2018] [added: [2019] Performance Share Program pursuant to the 2003 Equity Incentive [removed: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634318000039/adbeex1028-k126.htm)] [added: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000024/adbeex1028-k128.htm)] | | | | | | 8-K | | | | | | [removed: 1/26/18] [added: 1/28/19] | | | | | | 10.2 | | | | | | 000-15175 | | | | | | | | |

| [removed: 10.2G] [added: 10.2E] | | | | | | [Form of [removed: 2018] [added: 2019] Performance Share Award Grant Notice and Award Agreement pursuant to [removed: 2018] [added: 2019] Performance Share Program and 2003 Equity Incentive [removed: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634318000039/adbeex1038-k126.htm)] [added: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000024/adbeex1038-k128.htm)] | | | | | | 8-K | | | | | | [removed: 1/26/18] [added: 1/28/19] | | | | | | 10.3 | | | | | | 000-15175 | | | | | | | | |

| [removed: 10.2H] [added: 10.3D] | | | | | | [removed: [2019] [added: [2021] Performance Share Program pursuant to the [removed: 2003] [added: 2019] Equity Incentive [removed: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000024/adbeex1028-k128.htm)] [added: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634321000028/adbeex1028-k.htm)] | | | | | | 8-K | | | | | | [removed: 1/28/19] [added: 1/27/21] | | | | | | 10.2 | | | | | | 000-15175 | | | | | | | | |

| [removed: 10.2I] [added: 10.3E] | | | | | | [Form of [removed: 2019] [added: 2021] Performance Share Award Grant Notice and Award Agreement pursuant to [removed: 2019] [added: 2021] Performance Share Program and [removed: 2003] [added: 2019] Equity Incentive [removed: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000024/adbeex1038-k128.htm)] [added: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634321000028/adbeex1038-k.htm)] | | | | | | 8-K | | | | | | [removed: 1/28/19] [added: 1/27/21] | | | | | | 10.3 | | | | | | 000-15175 | | | | | | | | |

| 10.3A | | | | | | [2019 Equity Incentive [removed: Plan*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000091/ex101-2019.htm)] [added: Plan, as amended*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000091/ex101-2019.htm)] | | | | | | 8-K | | | | | | 4/12/19 | | | | | | 10.1 | | | | | | 000-15175 | | | | | | | | |

| [removed: 10.3D] [added: 10.3F] | | | | | | [Form of Restricted Stock Unit Grant Notice and Award Agreement pursuant to 2019 Equity Incentive [removed: Plan](http://www.sec.gov/Archives/edgar/data/796343/000079634319000142/adbeex1035bq219.htm) [(for] [added: Plan (for] awards granted prior to January [removed: 1](http://www.sec.gov/Archives/edgar/data/796343/000079634319000142/adbeex1035bq219.htm)[5](http://www.sec.gov/Archives/edgar/data/796343/000079634319000142/adbeex1035bq219.htm)[, 2021)](http://www.sec.gov/Archives/edgar/data/796343/000079634319000142/adbeex1035bq219.htm)[*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000142/adbeex1035bq219.htm)] [added: 15, 2021)*](http://www.sec.gov/Archives/edgar/data/796343/000079634319000142/adbeex1035bq219.htm)] | | | | | | 10-Q | | | | | | 6/26/19 | | | | | | 10.35B | | | | | | 000-15175 | | | | | | | | |

| [removed: 10.3E] [added: 10.3G] | | | | | | [Form of Restricted Stock Unit Grant Notice and Award Agreement pursuant to 2019 Equity Incentive Plan (for awards granted on or after January 15, [removed: 2021)*](https://www.sec.gov/Archives/edgar/data/796343/000079634321000004/adbeex103efy20.htm)] [added: 2021)*](http://www.sec.gov/Archives/edgar/data/796343/000079634321000004/adbeex103efy20.htm)] | | | | | | [added: 10-K] | | | | | | [added: 1/15/21] | | | | | | [added: 10.3E] | | | | | | [added: 000-15175] | | | | | | [removed: X] | | |

| 10.10 | | | | | | [removed: [2020] [added: [2021] Executive Annual Incentive Plan, as amended and [removed: restated*](http://www.sec.gov/Archives/edgar/data/796343/000079634320000129/ex101-2020revisedeaip.htm)] [added: restated*](http://www.sec.gov/Archives/edgar/data/796343/000079634321000028/adbeex1048-k.htm)] | | | | | | 8-K | | | | | | [removed: 6/11/20] [added: 1/27/21] | | | | | | [removed: 10.1] [added: 10.4] | | | | | | 000-15175 | | | | | | | | |