Adobe (ADBE) 10-K risk factor changes: FY2022 vs FY2021

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

[removed: Finally, to] [added: To] the extent that the pandemic harms our business and results of operations, many of the other risks described in this [removed: “Risk Factors” section] [added: Part I, Item 1A of this report] may be heightened.

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

Furthermore, some of our competitors and potential competitors enjoy competitive [removed: advantages] [added: advantages,] such as greater financial, technical, sales, marketing and other resources, broader brand awareness and access to larger customer bases.

*[For additional information regarding our competition and the risks arising out of the competitive environment in which we operate, see the [removed: section](#i43a0f166e9174c8d9d706b477ac3a79e_25) [titled “Competition”](#i43a0f166e9174c8d9d706b477ac3a79e_25) [in] [added: section titled “Competition” contained in] Part I, Item 1 of this [removed: report.](#i43a0f166e9174c8d9d706b477ac3a79e_25)*][added: report.](#iebcb91b2b75a4807a5a4d5cb7021397e_25)*]

[removed: If] [added: The markets in which] we [added: participate are intensely competitive, and if we] cannot continue to develop, acquire, market and offer new products and services or enhancements to existing products and services that meet customer requirements, our operating results could suffer.

If we fail to anticipate [added: or misjudge] customers’ rapidly changing needs and expectations or adapt to emerging technological trends, our market share and results of operations could suffer.

[removed: Consumers] [added: For example, consumers] continue to migrate from personal computers to tablet and mobile [removed: devices.][added: devices and from desktop to the web.]

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

[removed: Releases] [added: In addition, releases] of new devices or operating systems may make it more difficult for our products to perform or may require significant cost to adapt our [removed: solutions to such devices or operating systems.][added: solutions.]

[removed: These] [added: The] potential costs and delays [added: incurred as a result] could harm our business.

[removed: Integration] [added: As new technology is developed, integration] of our products and services with one another and other companies’ offerings creates an increasingly complex ecosystem that is [added: also] partly reliant on third parties.

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

For example, some of our products [added: and services, including those marketed or licensed through adobe.com,] rely on tracking, third-party cookies or other identifiers to help our customers more effectively advertise [added: and detect and prevent fraudulent activity.]

[removed: Consumers can] [added: Increased use of methods to] control the use of these technologies through [removed: their] [added: customers’] browsers, operating systems, device settings or “ad-blocking” software or [removed: applications.][added: applications may harm our business.]

- inability to obtain, or obtain in a timely manner, approvals from governmental authorities, which could delay [removed: or] prevent [added: or impose conditions on] such acquisitions;

If we do not complete an announced acquisition [removed: transaction] [added: transaction, including the pending acquisition of Figma, Inc.,] or integrate an acquired business successfully and in a timely manner, we may not realize the benefits of the acquisition to the extent anticipated, and in certain circumstances an acquisition could harm our financial position.

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

The success of some of our product and service offerings, such as Adobe Stock, depends on our ability to continue to [added: retain existing and] attract new customers and contributors to these online marketplaces for creative [removed: content, as well as our ability to continue to retain existing customers and contributors.][added: content.]

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, [removed: deceptive,] [added: deceptive] or intended to manipulate public opinion [removed: (e.g.] [added: (e.g.,] “DeepFakes”), by the use of our products or services for illicit, objectionable or illegal ends, or by our failure to respond appropriately and expeditiously to such uses of our products and services.

Potential government regulation related to AI [added: use and] ethics may also increase the burden and cost of research and development in this area, [removed: subjecting us] [added: and failure] to [removed: brand or reputational harm, competitive harm] [added: properly remediate AI usage] or [removed: legal liability.][added: ethics issues may cause public confidence in AI to be undermined, which could slow adoption of AI in our products and services.]

Security breaches in data centers we manage, or third parties manage on our behalf, may compromise the confidentiality, [removed: integrity,] [added: integrity] or availability of employee and customer data, which could expose us to liability and adversely affect our reputation and business.

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 [added: party, software vulnerabilities or coding errors, employee mistakes, theft or misuse or other misconduct.]

It is also possible that unauthorized access to or disclosure of employee or customer data may [removed: be obtained] [added: occur] through inadequate use of security controls by [removed: customers] [added: customers, service providers] or employees.

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

Much of our business relies on hardware and services that are hosted, managed and controlled directly by Adobe or third-party service providers, including our online store at [removed: adobe.com,] [added: adobe.com and our] Creative Cloud, Document Cloud and Experience Cloud solutions.

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 us without adequate notice, we might not be able to deliver the corresponding hosted offerings to our customers, which could [added: disrupt our business operations and those of our customers,] subject us to reputational harm, costly and time-intensive notification requirements, and cause us to lose customers and future business.

[removed: In addition, the] [added: The] COVID-19 pandemic 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.

It is also possible that hardware or software failures or errors in our systems (or those of our third-party service providers) could result in data loss or corruption, cause the information that we collect or maintain to be incomplete or contain inaccuracies that our customers regard as significant, or cause us to fail to meet committed service levels or comply with [removed: regulatory] [added: applicable] notification requirements.

In addition, [added: the loss of data resulting from] computer viruses, worms, ransomware or other malware may harm our [removed: systems, causing us to lose data, and the transmission of computer viruses or other malware] [added: systems] 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 [removed: because of a number of factors, including] [added: due to factors such as] significant spikes in customer activity on their websites or failures of our network or software (or that of a third-party service provider).

[removed: Such a strain on our infrastructure] capacity could subject us to regulatory and customer notification requirements, violations of service level agreement [removed: commitments,] [added: commitments or] financial [removed: liabilities,] [added: liabilities and] result in customer [removed: dissatisfaction,] [added: dissatisfaction] or harm our business.

If we supply [added: materially] inaccurate information or experience [added: significant] interruptions in our systems, our reputation could be harmed, we could lose [removed: customers,] [added: customers] and we could be found liable for damages or incur other losses.

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

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

The costs to prevent, eliminate, [removed: mitigate,] [added: mitigate] or alleviate [removed: cyber-] [added: cyber] or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities are significant, and our efforts to address these problems, including notifying affected parties, may not be successful or may be delayed and could result in interruptions, delays, cessation of service and loss of existing or potential customers.

[removed: We also expect to resume operations in our offices under a] [added: This existing risk is compounded given the current] hybrid model [added: work environment,] where a large portion of our workforce [removed: will spend] [added: spends] a portion of their time working in our offices and a portion of their time working from home.

Unauthorized parties may also attempt to gain physical access to our facilities in order to infiltrate our information systems or attempt to gain logical access to our products, [removed: services,] [added: services] or information systems for the purpose of exfiltrating content and data.

These actual and potential breaches of our security measures and the accidental loss, inadvertent disclosure or unauthorized dissemination of proprietary information or sensitive, personal or confidential data about us, our employees, our customers or their end users, including the potential loss or disclosure of such information or data [removed: as a result of hacking, fraud, trickery or other forms of deception,] could expose us, our employees, our customers or [removed: the] [added: other] individuals affected to a risk of loss or misuse of this information.

This may result in litigation and liability or fines, [removed: our compliance with] costly and time-intensive notice requirements, governmental inquiry or oversight or a loss of customer confidence, any of which could harm our business or damage our brand and reputation, thereby requiring time and resources to mitigate these impacts.

Our competitors, including large enterprises, may develop products, features or services that are similar to ours or that achieve greater acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies.

However, consumers can, with increasing ease, implement technologies to limit the ability to collect and use data to deliver or advertise services.

- potential identified or unknown security vulnerabilities in acquired products that expose us to additional security risks or delay our ability to integrate the product into our offerings;

- additional stock-based compensation issued or assumed in connection with an acquisition, including the impact on stockholder dilution and our results of operations;

In addition, government regulation designed to address DeepFakes could adversely impact our product offerings.

The rapid evolution of AI will require the application of resources to develop, test and maintain our products and services to help ensure that AI is implemented ethically in order to minimize unintended, harmful impact.

Uncertainty around new and emerging AI applications such as generative AI content creation may require additional investment in the development of proprietary datasets and machine learning models,

development of new approaches and processes to provide attribution or remuneration to content creators and building systems that enable creatives to have greater control over the use of their work in the development of AI, which may be costly and could impact our profit margin if we decide to expand generative AI into all our product offerings.

Developing, testing, and deploying AI systems may also increase the cost profile of our offerings due to the nature of the computing costs involved in such systems.

The compromise of personal, confidential or proprietary information could cause a loss of data, disrupt our operations, damage our reputation, give rise to remediation or other expenses and subject us to claims or other liabilities, regulatory investigations or fines.

Adobe maintains insurance to cover operational risks, such as cyber risk and technology outages, but this insurance may not cover all costs associated with the consequences of personal, confidential or proprietary information being compromised.

In addition, supply chain disruptions stemming from the Russia-Ukraine war may harm our customers and suppliers and further complicate existing supply chain constraints.

Such a strain on our infrastructure

The frequency and sophistication of such threats continues to increase and often becomes further heightened in connection with geopolitical tensions.

Like other global companies, we face an increasingly difficult challenge to attract and retain highly qualified security personnel to assist us in combating these security threats.

In some cases, such vulnerabilities may not be immediately detected, which may make it difficult to recover critical services and lead to damaged assets.

We continuously monitor and develop our information technology networks and infrastructure in an effort to prevent, detect, address and mitigate the risk of threats to our data, systems and networks, including malware and computer virus attacks, ransomware, unauthorized access, business email compromise, misuse, denial-of-service attacks, system failures and disruptions.

These continued enhancements and changes, as well as changes designed to update and enhance our protective measures to address new threats, may increase the risk of a system or process failure or the creation of a gap in the associated security measures.

Any such failure or gap could materially and adversely affect our business, results of operations and financial results.

Despite our preventative efforts, there is no assurance that our security measures will provide

as directly as if our own employees performed these activities.

Further, the increased availability of hybrid or remote working arrangements has expanded the pool of companies that can compete for our employees and employment candidates.

A hybrid work environment may also present operational, cybersecurity and workplace culture challenges.

and substantial amounts of ongoing training for sales representatives.

- inflation and actions taken by central banks to counter inflation;

- international and regional economic, political and labor conditions, including any instability or security concerns abroad, such as uncertainty caused by economic sanctions, trade disputes, armed conflicts and wars;

We offer our products and services in foreign countries

Significant judgment is required in determining our current provision for income taxes and deferred tax assets or liabilities.

Tax laws in the United States and in foreign tax jurisdictions are dynamic and subject to change as new laws are passed and new interpretations are issued.

could make changes to relevant tax, accounting or other laws and interpretations thereof that have a material impact to us.

We regularly review our hedging program and make adjustments that we believe are appropriate.

Our hedging

Catastrophic events, including global pandemics such as the COVID-19 pandemic, may disrupt our business and adversely affect our financial condition and results of operations.

In

The adverse effects of any such catastrophic event would be exacerbated if experienced at the same time as another unexpected and adverse event, such as the COVID-19 pandemic.

The occurrence of regional epidemics or a global pandemic, such as the COVID-19 pandemic, have had and may continue to have an adverse effect on how we and our customers are operating our businesses and our operating results.

The extent to which global pandemics, such as the COVID-19 pandemic, impact our financial condition or results of operations will depend on factors such as the duration and scope of the pandemic, as well as whether there is a material impact on the businesses or productivity of our customers, partners, employee, suppliers and other partners.

Regulatory developments, changing market dynamics and stakeholder expectations regarding climate change may impact our business, financial condition and results of operations.

Worsening economic conditions have had and may continue to have an adverse impact on the businesses and financial health of many of our customers and hurt their creditworthiness.

Deterioration in economic conditions in

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

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

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

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

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

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.

Even if we follow what we believe to be best practices, our efforts to reopen our offices safely may not be successful and could expose our employees, partners and customers to health risks, and us to associated liability.

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.

We have continued to host virtual-only customer experiences, and we may deem it advisable to similarly alter, postpone or cancel entirely additional customer, employee or industry events in the future.

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

Moreover, the conditions caused by the pandemic has affected the rate of IT spending and may 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 contracts or affect attrition rates, all of which could adversely affect our future sales, operating results and overall financial performance.

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.

Authorities throughout the world have implemented measures to contain or mitigate the spread of the virus, including physical distancing, travel bans and restrictions, closure of non-essential businesses, quarantines, work-from-home directives, mask requirements, shelter-in-place 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, may delay the provisioning of our offerings, and may impact our employees.

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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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, future waves of COVID-19 infections (including the 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 actions, the administration, adoption and efficacy of vaccination programs and the impact of these and other factors on our employees, customers, partners and vendors.

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

Our competitive position and results of operations could be harmed if we do not compete effectively.

In addition, consolidation has occurred among some of our competitors.

Further consolidations in these markets may subject us to increased competitive pressures and may harm our results of operations.

The process of developing and acquiring new technology products and services and enhancing existing offerings is complex, costly and uncertain.

We must make long-term investments, develop, acquire or obtain appropriate intellectual property and commit significant resources before knowing whether our predictions will accurately reflect customer demand for our products and services.

If we misjudge customer needs in the future, our new products and services may not succeed and our revenues and earnings may be harmed.

Additionally, any delay in the development, acquisition, marketing or launch of a new offering or enhancement to an existing offering could result in customer attrition or impede our ability to attract new customers, causing a decline in our revenue, earnings or stock price and weakening our competitive position.

Our future success depends on a variety of factors, including our continued ability to innovate, introduce new products and services efficiently, enhance and integrate our products and services in a timely and cost-effective manner, extend our core technology into new applications, and anticipate emerging standards, business models, software delivery methods and other technological developments.

and detect and prevent fraudulent activity.

Increased use of such methods, software or applications could harm our business.

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

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

Accounts created with weak or recycled passwords could allow cyber-attackers to gain access to employee or customer data.

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 employees or 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 investigations or fines.

Discussion regarding our financial condition and results of operations for fiscal [removed: 2020] [added: 2021] as compared to fiscal [removed: 2019] [added: 2020] is included in Item 7 of our Annual Report on Form 10-K for the fiscal year ended [removed: November 27, 2020,] [added: December 3, 2021,] filed with the SEC on January [removed: 15, 2021.*][added: 21, 2022.*]

Cloud-based features that are integral to our Creative Cloud and Document Cloud offerings and that work together with the on-premise/on-device software include, but are not limited to: Creative Cloud Libraries, which enable customers to access their work, settings, preferences and other assets seamlessly across desktop and mobile devices and collaborate across teams in real time; shared reviews which enable simultaneous editing and commenting of [removed: PDFs] [added: digital assets] 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, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating [removed: losses] [added: loss] and tax credit carryforwards.

[removed: Management must make assumptions, judgments and estimates to determine] [added: Significant judgment is required in determining] our current provision for income taxes and [removed: also our] deferred tax assets [removed: and] [added: or] liabilities.

Our assumptions, judgments and estimates relative to the current provision for income taxes take into account [removed: current tax laws,] our interpretation [added: and application] of current tax laws and possible outcomes of current and future [removed: audits] [added: examinations] conducted by [removed: foreign and] domestic [added: and foreign] tax authorities.

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

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

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

*[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.](#i43a0f166e9174c8d9d706b477ac3a79e_133)*][added: us.](#iebcb91b2b75a4807a5a4d5cb7021397e_139)*]

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 [removed: $1.18] [added: $1.24] billion and we began integrating Frame.io into our Digital Media reportable segment.

*[See Note 3 of our Notes to Consolidated Financial Statements for further information regarding these [removed: acquisitions](#i43a0f166e9174c8d9d706b477ac3a79e_139)[.](#i43a0f166e9174c8d9d706b477ac3a79e_139)*][added: acquisitions.](#iebcb91b2b75a4807a5a4d5cb7021397e_145)*]

[removed: In] [added: As we execute on] our [removed: Digital Experience segment,] [added: long-term growth initiatives,] we [added: have] continued to experience growth in software-based subscription revenue across our portfolio of offerings.

[removed: Our financial results] [added: Revenue] 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 [removed: is] [added: was] a 53-week year compared with fiscal [removed: 2020] [added: 2022] and [removed: 2019] [added: 2020] which were 52-week years.

In our Digital Media segment, we are a market leader with Creative Cloud, our subscription-based offering which provides desktop tools, mobile apps and cloud-based services for designing, creating and publishing rich [added: content] and immersive [removed: content.][added: 3D experiences.]

[removed: Creative Cloud delivers value with deep, cross-product integration, frequent product updates and feature enhancements, cloud-enabled services including storage and] syncing of files across users’ [removed: machines,] [added: devices,] machine learning and artificial intelligence, access to marketplace, social and community-based features with our Adobe Stock and Behance services, app creation capabilities, tools which assist with enterprise deployments and team collaboration, and affordable pricing for cost-sensitive customers.

We expect Creative Cloud will drive sustained long-term revenue growth through a continued expansion of our customer base by attracting new users with new features and [removed: products, continuing] [added: products like Adobe Express that make creative tools accessible] to [removed: acquire users with our low cost of entry and delivery of additional features] [added: first-time creators] and [removed: value to Creative Cloud,] [added: communicators,] and delivering new features and technologies to existing customers with our latest [removed: releases.][added: releases such as share for review.]

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

We are also a market leader with our Document Cloud offerings built around our Adobe Acrobat family of products, [removed: including Adobe Acrobat Reader DC, and] [added: with] a set of integrated mobile apps and cloud-based document [removed: services, including Adobe Scan] [added: services which enable users to create, review, approve, sign] and [removed: Adobe Sign.][added: track documents regardless of platform or application source type.]

Document Cloud, which [removed: we believe] enhances the way people manage critical documents at home, in the office and across devices, includes Adobe [added: Acrobat, Adobe] Acrobat [removed: DC] [added: Sign] and Adobe [removed: Sign, and a set of integrated services enabling users to create, review, approve, sign and track documents whether on a desktop or mobile device.][added: Scan.]

Adobe Acrobat [removed: DC] is offered both through subscription and perpetual licenses.

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 [removed: journeys.][added: journeys, and it continues to contribute strong growth in the business.]

[added: 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 [removed: year.][added: year for measurement purposes.]

Creative ARR exiting fiscal [removed: 2021] [added: 2022] was [removed: $10.30] [added: $11.60] billion, up from [removed: $8.78] [added: $10.22] billion at the end of fiscal [removed: 2020.][added: 2021.]

Document Cloud ARR exiting fiscal [removed: 2021] [added: 2022] was [removed: $1.93] [added: $2.37] billion, up from [removed: $1.47] [added: $1.93] billion at the end of fiscal [removed: 2020.][added: 2021.]

Total Digital Media ARR grew to [removed: $12.24] [added: $13.97] billion at the end of fiscal [removed: 2021,] [added: 2022,] up from [removed: $10.26] [added: $12.15] billion at the end of fiscal [removed: 2020.][added: 2021.]

Revaluing our ending ARR for fiscal [removed: 2021] [added: 2022] using currency rates at the beginning of fiscal [removed: 2022,] [added: 2023,] our Digital Media ARR at the end of fiscal [removed: 2021] [added: 2022] would be [removed: $12.15] [added: $13.26] billion or approximately [removed: $86] [added: $712] million lower than the ARR reported above.

Creative revenue in fiscal [removed: 2021] [added: 2022] was [removed: $9.55] [added: $10.46] billion, up from [removed: $7.74] [added: $9.55] billion in fiscal [removed: 2020] [added: 2021] and representing [removed: 23%] [added: 10%] year-over-year growth.

Total Digital Media segment revenue grew to [removed: $11.52] [added: $12.84] billion in fiscal [removed: 2021,] [added: 2022,] up from [removed: $9.23] [added: $11.52] billion in fiscal [removed: 2020] [added: 2021] and representing [removed: 25%] [added: 11%] year-over-year [added: growth driven by strong net new user] growth.

The Adobe Experience Cloud applications, services and platform are designed to manage customer journeys, enable [removed: shoppable] [added: personalized] experiences [added: at scale] and deliver intelligence for businesses of any size in any industry.

Our differentiation and competitive advantage [removed: is] [added: are] strengthened by our ability to use the Adobe Experience Platform to [removed: connect] [added: integrate] our comprehensive set of solutions.

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

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

Digital Experience revenue was [removed: $3.87] [added: $4.42] billion in fiscal [removed: 2021,] [added: 2022,] up from [removed: $3.13] [added: $3.87] billion in fiscal [removed: 2020] [added: 2021] which represents [removed: 24%] [added: 14%] year-over-year growth.

Driving this increase was the increase in subscription revenue across our offerings which grew to [removed: $3.38] [added: $3.88] billion in fiscal [removed: 2021] [added: 2022] from [removed: $2.66] [added: $3.38] billion in fiscal [removed: 2020,] [added: 2021,] representing [removed: 27%] [added: 15%] year-over-year growth.

[removed: However, while] [added: While] our revenue and earnings are relatively predictable as a result of our subscription-based business model, the [removed: duration of the pandemic and the] broader implications of [removed: the macro-economic recovery] [added: these macroeconomic events] on our [removed: business] [added: business, results of operations and overall financial position, particularly in the long term,] remain uncertain.

[removed: *[S](#i43a0f166e9174c8d9d706b477ac3a79e_49)[ee](#i43a0f166e9174c8d9d706b477ac3a79e_49) [the] [added: *[See the] section [removed: titled](#i43a0f166e9174c8d9d706b477ac3a79e_49) [“](#i43a0f166e9174c8d9d706b477ac3a79e_49)[Risk Factors](#i43a0f166e9174c8d9d706b477ac3a79e_49)[”](#i43a0f166e9174c8d9d706b477ac3a79e_49) [](#i43a0f166e9174c8d9d706b477ac3a79e_49)[in] [added: titled “Risk Factors” in] Part I, Item [removed: 1A](#i43a0f166e9174c8d9d706b477ac3a79e_49) [of] [added: 1A of] this [removed: report](#i43a0f166e9174c8d9d706b477ac3a79e_49) [fo](#i43a0f166e9174c8d9d706b477ac3a79e_49)[r] [added: report for] further discussion of the possible impact of [removed: the pandemic] [added: these macroeconomic issues] on our [removed: business.](#i43a0f166e9174c8d9d706b477ac3a79e_49)*][added: business.](#iebcb91b2b75a4807a5a4d5cb7021397e_49)*]

*Financial Performance Summary for Fiscal [removed: 2021*][added: 2022*]

- Total Digital Media ARR of approximately [removed: $12.24] [added: $13.97] billion as of December [removed: 3, 2021] [added: 2, 2022] increased by [removed: $1.98] [added: $1.82] billion, or [removed: 19%,] [added: 15%,] from [removed: $10.26] [added: $12.15] billion as of [removed: November 27, 2020.][added: December 3, 2021.]

The change in our Digital Media ARR was primarily due to new user adoption of our Creative Cloud and Document Cloud [removed: offerings.][added: offerings, partially offset by an $87 million ARR reduction taken in March 2022 in response to the Russia-Ukraine war.]

- Creative revenue of [removed: $9.55] [added: $10.46] billion increased by [removed: $1.81 billion,] [added: $913 million,] or [removed: 23%,] [added: 10%,] during fiscal [removed: 2021,] [added: 2022,] from [removed: $7.74] [added: $9.55] billion in fiscal [removed: 2020.][added: 2021.]

We record a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not.

To the extent that the final determination of any of these examinations is different from the amounts recorded, such differences will affect the provision for income taxes and the effective tax rate in the period in which such determination is made.

Overview of 2022

For our fiscal 2022, we experienced strong demand across our Digital Media and Digital Experience offerings, driven by the ongoing shift towards a digital-first world.

Starting in December 2021, Creative Cloud includes Adobe Express, a web and mobile application designed to enable a broad spectrum of users, including novice content creators, communicators and creative professionals, to create, edit and customize content quickly and easily with content-first, task-based solutions.

Creative Cloud delivers value with deep, cross-product integration, frequent product updates and feature enhancements, cloud-enabled services including storage and

In March 2022, in response to the Russia-Ukraine war, we announced a halt of all new sales of our products and services in Russia and Belarus.

As a result, we reduced our Digital Media ARR balance by $75 million, which represented our Digital Media ARR for existing business in Russia and Belarus.

While we continued to provide Digital Media services in Ukraine, we also reduced our Digital Media ARR balance by an additional $12 million, which represented our Digital Media business in Ukraine.

This resulted in a total ARR reduction of $87 million taken at the beginning of the second quarter of fiscal 2022.

Document Cloud revenue in fiscal 2022 was $2.38 billion, up from $1.97 billion in fiscal 2021 and representing 21% year-over-year growth.

*Macroeconomic Conditions*

As a corporation with an extensive global footprint, we are subject to risks and exposures from foreign currency exchange rate fluctuations caused by significant events with macroeconomic impacts, including, but not limited to, the Russia-Ukraine war, COVID-19 pandemic and actions taken by central banks to counter inflation.

We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape.

Foreign currency exchange rate fluctuations have negatively impacted our revenue and earnings during fiscal 2022, and are expected to continue to negatively impact our financial results in fiscal 2023.

| *(dollars in millions)* | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | % Change 2022-2021 | | | | | | | | |

| Total revenue | | | | | | $ | 17,606 | | | | | $ | 15,785 | | | | | $ | 12,868 | | | | | 12 | | % | | | | | | |

| *(dollars in millions)* | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | % Change 2022-2021 | | |

| *(dollars in millions)* | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | % Change 2022-2021 | | | | | | | | |

| Total revenue | | | | | | $ | 17,606 | | | | | $ | 15,785 | | | | | $ | 12,868 | | | | | 12 | | % | | | | | | |

| *(dollars in millions)* | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | % Change 2022-2021 | | | | | | | | |

Cost of services and other revenue increased during fiscal 2022 as compared to fiscal 2021 primarily due to increases in compensation costs and professional fees.

| *(dollars in millions)* | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | % Change 2022-2021 | | | | | | | | |

| | | | Components of % Change 2022-2021 | | | | | | | | |

| Various individually insignificant items | | | 2 | | | | | | | | |

| | | | Components of % Change 2022-2021 | | | | | | | | |

| Various individually insignificant items | | | 3 | | | | | | | | |

| | | | Components of % Change 2022-2021 | | | | | | | | |

| Professional and consulting fees | | | 4 | | % | | | | | | |

| Charitable contributions | | | 2 | | | | | | | | |

| Charges related to cancellation of corporate events, net of recoveries | | | (2) | | | | | | | | |

| Various individually insignificant items | | | 1 | | | | | | | | |

Professional and consulting fees increased from fiscal 2022 as compared to fiscal 2021 primarily due to incurred transaction costs associated with our planned acquisition of Figma.

| *(dollars in millions)* | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | % Change 2022-2021 | | | | | | | | |

| *(dollars in millions)* | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | % Change 2022-2021 | | | | | | | | |

| Percentage of total revenue | | | | | | 7 | | % | | | | 6 | | % | | | | (8) | | % | | | | | | | | | | | | |

Although the timing of resolution, settlement and closing of audits is not certain, it is reasonably possible that the underlying unrecognized tax benefits may decrease by up to $25 million over the next 12 months.

Our future effective tax rates may be materially affected by changes in the tax rates in jurisdictions where our income is earned, changes in jurisdictions in which our profits are determined to be earned and taxed, changes in the valuation of our deferred tax assets and liabilities, changes in or interpretation of tax rules and regulations in the jurisdictions in which we do business, or unexpected changes in business and market conditions that could reduce certain tax benefits.

Our policy is to record interest and penalties related to unrecognized tax benefits in income tax expense.

securities and U.S. Treasury securities.

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

These tax examinations are expected to focus on our research and development tax credits, intercompany transfer pricing practices and other matters.

Overview of 2021

For our fiscal 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.

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.

Acrobat provides reliable creation and exchange of electronic documents, regardless of platform or application source type.

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

Our reported ARR results in the

Document Cloud revenue in fiscal 2021 was $1.97 billion, up from $1.50 billion in fiscal 2020 and representing 32% year-over-year growth which reflected an increase in demand driven by new user acquisition for our Document Cloud subscription offerings.

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

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

By combining the creativity of our Digital Media business

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.

COVID-19 UPDATE

The COVID-19 pandemic continues to have widespread, rapidly-evolving and unpredictable impacts on global societies, economies, financial markets and business practices.

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.

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

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.

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

This ongoing shift to a digital-first world has increased the importance and relevance of our solutions, which has contributed to our continued growth year over year.

- Net income of $4.82 billion decreased by $438 million, or 8%, during fiscal 2021 from $5.26 billion in fiscal 2020 primarily due to the change in provision for income taxes, which was largely driven by the non-recurring benefit from income taxes recognized in fiscal 2020 associated with our intra-entity transfers of certain intellectual property rights.

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

Revenue associated with our Creative offerings, which includes our Creative Cloud, increased during fiscal 2021 primarily due to increases in net new subscriptions across our Creative Cloud offerings.

Document Cloud revenue, which includes our Acrobat product family and Adobe Sign service, increased during fiscal 2021 primarily due to increases in subscription revenue driven by strong new user acquisition of our Document Cloud offerings.

_________________________________________

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

Cost of services and other decreased during fiscal 2021 as compared to fiscal 2020 mainly due to lower media costs related to Advertising Cloud offerings that were discontinued beginning in the second quarter of fiscal 2020.

| Transaction fees | | | 2 | | | | | | | | |

| Bad debt expense | | | (4) | | | | | | | | |

| Software licenses | | | 2 | | | | | | | | |

Amortization expense increased during fiscal 2021 as compared to fiscal 2020 primarily due to amortization expense associated with intangible assets purchased through our acquisition of Workfront.

The increase in amortization expense is offset in part by the impact of certain intangible assets from previous acquisitions, including Marketo and Omniture, becoming fully amortized in fiscal 2020.

() Percentage is not meaningful.

Interest expense decreased during fiscal 2021 as compared to fiscal 2020 primarily due to lower average interest rates on our debt instruments that were refinanced in the first quarter of fiscal 2020.

The higher effective tax rate was primarily due to the non-recurring tax benefits recognized during fiscal 2020 as a result of the change in our corporate tax trading structure, and the corresponding change in geographic mix of international income in fiscal 2021.

In making such a determination, we considered all available positive and negative evidence, including our past operating results, forecasted earnings, future taxable income and prudent and feasible tax planning strategies.

Given the uncertainties described above, we can only determine a range of estimated potential decreases in underlying unrecognized tax benefits ranging from $0 to approximately $5 million over the next 12 months.

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

Our significant foreign currency revenue exposures for fiscal [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019] [added: 2020] were as [removed: follows :][added: follows:]

| *(in millions)* | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Euro | | | € | [removed: 2,209] [added: 2,487] | | | | | € | [removed: 1,887] [added: 2,209] | | | | | € | [removed: 1,603] [added: 1,887] | |

| Japanese Yen | | | ¥ | [removed: 104,829] [added: 118,456] | | | | | ¥ | [removed: 88,640] [added: 104,829] | | | | | ¥ | [removed: 73,158] [added: 88,640] | |

| British Pounds | | | £ | [removed: 669] [added: 737] | | | | | £ | [removed: 562] [added: 669] | | | | | £ | [removed: 503] [added: 562] | |

| Australian Dollars | | | $ | [removed: 768] [added: 876] | | | | | $ | [removed: 645] [added: 768] | | | | | $ | [removed: 538] [added: 645] | |

As of December [removed: 3, 2021,] [added: 2, 2022,] the total notional amounts of all outstanding foreign exchange contracts, including options and forwards, were [removed: $3.03] [added: $3.25] billion, which included the notional equivalent of [removed: $1.47] [added: $1.32] billion in Euros, [added: $602 million in Indian Rupees,] $480 million in British Pounds, [removed: $448] [added: $394] million in Japanese Yen, $338 million in Australian Dollars and [removed: $299] [added: $112] million in other foreign currencies.

As of December [removed: 3, 2021,] [added: 2, 2022,] all contracts were set to expire at various dates through [removed: June 2022.][added: November 2023.]

A sensitivity analysis was performed on all of our foreign exchange derivatives as of December [removed: 3, 2021.][added: 2, 2022.]

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: $172] [added: $75] million.

[removed: Conversely, a] [added: A] 10% decrease in the value of the U.S. Dollar would [removed: result in a decrease] [added: lead to an increase] in the fair value of these financial instruments by [removed: $76] [added: $17] million.

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

As of December [removed: 3, 2021] [added: 2, 2022] and [removed: November 27, 2020,] [added: December 3, 2021,] this long-term investment exposure totaled an absolute notional equivalent of [removed: $749] [added: $770] million and [removed: $598] [added: $749] million, [removed: respectively, with the year-over-year increase primarily driven by earnings growth.][added: respectively.]

*Cash Flow Hedges of Forecasted Foreign Currency [removed: Revenue*][added: Revenue and Expenses*]

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

We enter into these foreign exchange contracts to hedge forecasted revenue [added: and expenses] in the normal course of business and accordingly, they are not speculative in nature.

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

When the forecasted transaction affects earnings, we reclassify the related gain or loss on the cash flow hedge to [removed: revenue.][added: revenue or]

In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, we reclassify the gain or loss on the related cash flow hedge from accumulated other comprehensive income (loss) to [removed: revenue.][added: revenue or operating expenses, as applicable.]

For the fiscal year ended December [removed: 3, 2021,] [added: 2, 2022,] there were no net gains or losses recognized in revenue [added: or operating expenses] relating to hedges of forecasted transactions that did not occur.

At December [removed: 3, 2021,] [added: 2, 2022,] 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.](#i43a0f166e9174c8d9d706b477ac3a79e_151)*][added: instruments.](#iebcb91b2b75a4807a5a4d5cb7021397e_157)*]

At December [removed: 3, 2021,] [added: 2, 2022,] we had debt securities classified as short-term investments of [removed: $1.95] [added: $1.86] billion.

A sensitivity analysis was performed on our [added: short-term] investment portfolio as of December [removed: 3, 2021,] [added: 2, 2022,] 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 curve.

A 150 basis point increase in interest rates would lead to a [removed: $27] [added: $20] million decrease in the market value of our short-term investments.

Conversely, a 150 basis point decrease in interest rates would lead to a [removed: $14] [added: $20] million increase in the market value of our short-term investments.

As of December [removed: 3, 2021,] [added: 2, 2022,] 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.

As of December [removed: 3, 2021,] [added: 2, 2022,] the total carrying amount of our senior notes was [removed: $4.12] [added: $4.13] billion and the related fair value based on observable market prices in less active markets was [removed: $4.29] [added: $3.88] billion.

*[See Note 17 of our Notes to Consolidated Financial Statements for information regarding our senior [removed: notes.](#i43a0f166e9174c8d9d706b477ac3a79e_187)*][added: notes.](#iebcb91b2b75a4807a5a4d5cb7021397e_196)*]

operating expenses, as applicable.

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

local currency denominated operating expenses.

For [removed: almost 40 years,] [added: four decades,] Adobe’s innovations have transformed how individuals, teams, businesses and governments engage and interact across all types of media.

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

[added: and] Adobe [added: Document Cloud, which include Adobe Express, Photoshop, Illustrator, Lightroom, Premiere Pro, Acrobat, Adobe Acrobat] Sign and many more products, offering a variety of tools for creative professionals, communicators and other consumers.

Through these tools and services, we help our customers [removed: more efficiently and] effectively make, manage, [removed: measure and] monetize [added: and mobilize] 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 of these areas, where our mission to change the world through digital experiences has never been more relevant, as people seek new ways to [added: create, collaborate and] communicate and businesses continue to invest in digital transformation.

This overview provides an explanation of our markets and a discussion of strategic opportunities in fiscal [removed: 2022] [added: 2023] and beyond for each of our segments.

In today’s digital world, [added: content is fueling the global economy and] design and creativity have never been more relevant, providing a significant market opportunity for Adobe in digital media.

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

In a creator economy that is continually expanding, creators are looking for tools to help them easily make and share unique and beautiful content [removed: without complexity.][added: with speed and ease.]

We believe Adobe is in a strong position to [removed: capitalize on] [added: address] these trends with innovation that will [removed: accelerate the creative process to empower] [added: democratize creativity, empowering] individuals to create wherever inspiration strikes and [removed: enable] [added: enabling] more effective collaboration between creators and stakeholders.

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

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

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

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

[removed: With this digital transformation, we] [added: We] have the opportunity to continue to accelerate document productivity with Adobe Document Cloud, modernizing how people view, [removed: share] [added: share, collaborate] and engage with documents.

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

With content creation, [removed: consumption] [added: consumption, collaboration] 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 [removed: through innovation] to make our creative applications more [removed: accessible] [added: frictionless] and [removed: easier to learn] [added: accessible,] and meeting customer needs holistically to increase the value of our products.

We are [removed: taking] [added: expanding the capabilities of] Creative Cloud [removed: to] [added: on] the [removed: web, beginning] [added: web] with [removed: a] [added: improvements to our] public beta [removed: version] [added: web versions] of [removed: Photoshop,] [added: Photoshop and Illustrator,] which [removed: will] allow [removed: Creative Cloud] subscribers to [removed: make edits to] [added: edit] and [removed: collaborate on] [added: review] their files directly in their browser.

We also offer a range of other creative tools and services, including [removed: hobbyist products, such as Photoshop Elements and Premiere Elements;] libraries of creative assets, such as Adobe Stock and Adobe Fonts; mobile-first apps, such as [removed: Photoshop Camera;] [added: Lightroom Mobile;] and Creative Cloud Libraries, a central place for users to store their assets.

[removed: In our Creative Cloud business, we] [added: We also] continue to employ a pricing strategy, as appropriate, to [removed: move] [added: migrate] our customers to [removed: better-value] [added: higher-value] offerings as well as attract past customers and potential users to try out our products and ultimately subscribe.

[added: We use a data-driven operating model and our Adobe] Experience Cloud [added: 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.

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 [removed: subscriptions to point products.]

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

We use our data-driven operating model [added: and product-led growth strategy] to optimize conversion of our users of free apps and trials to paid subscribers.

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

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

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

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

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

Business customers increasingly have the same expectations, [removed: which drives] [added: driving] business-to-business (“B2B”) companies to deliver [added: equally engaging and seamless experiences as] business-to-consumer (“B2C”) [removed: experiences with a] [added: companies and enterprise brands to adopt] “business-to-everyone” (“B2E”) [removed: strategy.][added: mindsets.]

[added: We continue to believe that addressing the challenges of customer experience management is] a large and growing opportunity and we are in position to help businesses and enterprises invest in solutions that aid their goals to transform how they engage with their customers and constituents digitally.

Our goal is to be [removed: the] [added: a] leading provider of cloud-based solutions for delivering digital experiences and enabling digital transformation.

The Adobe Experience Platform further strengthens our differentiation [removed: and competitive advantage] [added: by] offering a way to connect our comprehensive set of solutions.

Our solutions, including Adobe Analytics, Adobe Experience Platform, Customer Journey Analytics, Adobe Audience Manager and our Real-time Customer Data Platform, deliver [removed: robust customer profiles and AI-powered analytics across the customer journey to assist our customers] [added: actionable data] in [removed: providing timely, relevant] [added: real time to provide highly tailored and adaptive] experiences across platforms.

Our solutions help customers manage, deliver and optimize content [removed: delivery,] [added: delivery] through Adobe Experience [removed: Manager] [added: Manager,] and [removed: to enable shopping] [added: build multi-channel commerce] experiences [removed: that scale from mid-market to enterprise businesses,] [added: for B2B and B2C customers on a single platform] with Adobe Commerce.

Our solutions help businesses manage, test, target, personalize and [removed: orchestrate] [added: deliver] campaigns and customer journeys across [removed: B2E] [added: B2B and B2C] use cases, including through [added: Adobe] Marketo Engage, Adobe Campaign, Adobe Target and Journey Optimizer.

Adobe Experience Cloud also offers an open platform and ecosystem through the Adobe Experience Platform, AI [removed: services] [added: services,] and developer services through Adobe I/O.

This open architecture offers scalability with a wide variety of supporting products and services, empowers users to quickly develop innovative applications to interact with [removed: consumers] [added: customers] and enables a broad industry ecosystem.

To drive growth of Adobe Experience Cloud, we are focused on delivering the best customer experience management solutions [removed: for B2E,] [added: across B2B and B2C buyers, and both] enterprise and mid-market [removed: through our applications, services and platform.][added: segments.]

At the same time, creativity is increasingly a team sport that is redefining productivity, making collaboration even more critical to every company’s success.

consumers.

Users can choose between the speed and ease of use of Adobe Express, our task-based, template-first web and mobile application, or the greater power and precision of our flagship Creative Cloud applications.

Trillions of PDF documents are created every year, which reflects the growing role PDF plays across practically every segment of the economy.

We are empowering anyone, including novice content creators, communicators and creative professionals, to create, edit, schedule and share content quickly and easily using Adobe Express, which employs powerful capabilities from our flagship products like Photoshop, Premiere and Acrobat to deliver the best of Adobe to customers at any level.

We are continuing to integrate collaboration capabilities into our applications and workflows such as our native integration of Frame.io’s review and approval capabilities into Premiere Pro and After Effects.

Similarly, our new Share for Review feature in Photoshop, Illustrator and InDesign provides an efficient way for creators to seamlessly request, manage and view feedback from stakeholders that makes exporting to other formats, emailing files, tracking versions and keeping track feedback across different channels obsolete.

Other new features and solutions introduced in our products include Substance 3D Modeler, a new desktop and VR application for creating 3D objects; AI-powered quick actions and social media content scheduling in Adobe Express; direct video upload from select cameras to Frame.io with Camera to Cloud; and improved AI-powered neural filters and content-aware editing in Photoshop and Lightroom.

In our Creative Cloud business, we employ our product-led growth strategy to minimize the friction of customer interactions and drive positive product experiences, which results in increasing customer adoption, conversion, expansion and loyalty.

subscriptions to point products.

We also intend to drive innovation with Adobe Sensei, our cross-platform AI and machine learning technology, to make both new and legacy documents more intelligent and responsive, unlock business workflows through PDF and Adobe Acrobat Sign APIs, accelerate Document Cloud adoption through direct sales, and leverage diversified go-to-market motions to reach all segments.

- *Marketing workflows*.

Adobe Workfront is an enterprise work management application that allows businesses to strategically plan, manage, collaborate and execute on workflows for marketing campaigns and other projects at speed and scale.

Adobe Experience Platform is the foundation of our Adobe Experience Cloud products, with an open system that transforms user data from across Adobe solutions and third-party software into robust customer profiles.

Adobe customer profiles are updated in real time and include AI-driven insights to deliver the right customer experiences across channels.

We are continuing to add new services, functionality and features to our current offerings.

Some examples include a new algorithm in Adobe Target that utilizes machine learning to provide recommendations and tools that allow developers to optimize page load performance and deliver personalized experiences more quickly.

We also maintain several strategic partnerships with other technology companies that allow us to increase our market reach.

and Adobe PDF printing technologies provide advanced functionality to meet the sophisticated requirements of this marketplace.

With Adobe Express, we believe we compete well by making our professional creative technology accessible to a wider audience of first-time creators, communicators and creative professionals and enabling easy-to-use, efficient content creation for quick projects.

We believe competitive factors in our markets include the proven performance, security, scalability, flexibility and reliability of services; the strategic relationships and integration with third-party applications; the intuitiveness and visual appeal

Creative Cloud now includes Adobe Express, a web-native platform directed towards first-time creators, communicators and creative professionals that enables easy-to-use, efficient content creation and features guided tools and one-click solutions for quick projects.

The Creative Cloud all apps subscription offering includes Adobe Acrobat for creating, converting and editing PDFs, which is also available as a standalone product on Adobe.com.

New features in Photoshop include an improved Object Selection tool, one-tap Content-Aware Fill and improved neural filters.

New features in Lightroom include new Select People, Select Objects and Select Background features and Content-Aware Remove.

New features in Illustrator include the Intertwine feature that makes it quick and easy to wrap an illustration in and out of text or another illustration.

New features in Premiere Pro include a native Frame.io review and approval integration, Auto Color and media replacement with motion graphics templates, among others.

We recently launched the new Content Scheduler feature in Adobe Express, which allows creators to plan, schedule, preview and publish social media content across multiple platforms all from one place.

Adobe Express includes both free and premium features.

New features include Frame.io integration, native Apple M1 support, scene edit detection and a 3D Extended Viewer.

Frame.io is now directly integrated into Premiere Pro and After Effects to allow video creators to request and receive streamlined frame-specific comments directly in those applications.

Frame.io’s Camera to Cloud functionality

allows creators to seamlessly and automatically upload footage from cameras and other recording devices on set directly into Frame.io for review and editing.

Content and Commerce; Customer Journeys; Marketing Workflow; and Digital Enrollment and Onboarding, which are each described below.

New features include an algorithm that utilizes machine learning to provide recommendations and tools that allow developers to optimize page load performance and deliver personalized experiences more quickly.

Users can trigger individual journeys and use real-time

We believe that

In other instances, we have licensed or purchased the intellectual property ownership rights of programs

- *Workforce*: We take actions to improve the hiring, retention and promotion of a more diverse workforce to achieve our aspirational goals.

In fiscal 2022, we sourced candidates from a variety of conferences and partnerships, such as AfroTech, AdColor, BreakLine, HBCU 20x20 and Management Leadership for Tomorrow.

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

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

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.

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

In our Adobe Document Cloud business, Adobe Acrobat has achieved strong market adoption and a leadership position in document-intensive industries such as government, financial services, pharmaceutical, legal, aerospace, insurance and technical publishing.

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 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.

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

We continue to believe that addressing the challenges of customer experience management is

- *Marketing workflow*.

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

Adobe Experience Platform provides the underlying infrastructure to make customer experience management possible by standardizing data into an easily sharable format consumable by Adobe Sensei and provides an open and extensible cloud infrastructure for Adobe Experience Cloud that allows data to flow freely within the Adobe Experience Platform and between Adobe Experience Cloud solutions and third-party software.

We are continuing to add new services, such as Adobe Developer App Builder and Adobe Experience Cloud for Healthcare, and add new functionality and features to our current offerings, such as a new B2B edition of Adobe Real-Time Customer Data Platform, Adobe Experience Manager Screens and new personalization features in Adobe Experience Cloud.

Strategic partnerships, such as the ones we have formed with Microsoft, IBM, Fluent Commerce and Dentsu, continue to increase our market reach.

brings together the world’s largest collection of vector and raster brushes and Live Brushes, powered by Adobe Sensei, to deliver a natural painting and drawing experience.

New features in Premiere Pro include Speech-to-Text, automatic caption generation, native support for Apple M1 chips and tools for stylizing text, among others.

Adobe XD is our all-in-one experience design (“XD”) app on desktop and mobile used to build user experiences (“UX”) and user interfaces (“UI”) when designing websites, mobile apps and more.

Adobe XD brings design and prototyping together with tools, such as Responsive Resize, Repeat Grid and Auto Animate, that deliver precision and performance, save time, enable seamless collaboration and make sharing easy at each step of the process, allowing individuals and teams to create everything from low-fidelity wireframes to fully interactive prototypes.

Adobe XD is available as a free or premium version.

*Creative Cloud Express*

Creative Cloud Express is available as a free or premium version.

New features include real-time 3D draft preview, a 3D ground plane and improvements to collaboration tools.

the best customer experience and deliver that experience across all touchpoints.

New features include integration with Adobe Real-Time Customer Data Platform, same page segment qualification and enhanced AI-powered capabilities.

- *Pipeline*: We help build the pipeline of future technical talent by encouraging young people of all backgrounds to learn and get excited about software coding and careers in tech.

In fiscal 2021, we partnered with many visionary organizations including Braven, BRIDGEGOOD, OneSchool and ScholarMatch.

- *Candidates*: We source candidates from a variety of backgrounds and work to ensure fairness in our interview and hiring processes.

In fiscal 2021, we introduced a program called Hiring at Adobe that requires hiring managers to

complete a training to ensure diverse candidates are part of the interview and screening process; we sourced candidates from a variety of conferences and partnerships, such as AfroTech, BreakLine, Disability:IN and Techqueria; and we initiated the Adobe Anchor School Program, which includes partnerships with historically black colleges and universities and a Hispanic-Serving Institution.

- *Employees*: We are creating an inclusive workplace through community-building, training and internal awareness.

In fiscal 2021, we continued to support our many employee resource groups (“ERGs”) that build community for employees from underrepresented groups, including the recent addition of an Indigenous/First Nations ERG.

We hosted our annual global diversity and inclusion event, Adobe For All Week, bringing together thousands of employees to focus on ways to strengthen inclusion and empathy every day.

- *Industry*: We join forces with our customers, partners, vendors and peers to drive broader progress on diversity.

For the fiscal year ended December [removed: 3, 2021][added: 2, 2022]

The aggregate market value of the registrant’s common stock, $0.0001 par value per share, held by non-affiliates of the registrant on June [removed: 4, 2021,] [added: 3, 2022,] the last business day of the registrant’s most recently completed second fiscal quarter, was [removed: $188.31] [added: $159.00] billion (based on the closing sales price of the registrant’s common stock on that date).

As of January [removed: 14, 2022, 471.7] [added: 6, 2023, 457.8] 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: 2022] [added: 2023] Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the end of the fiscal year ended December [removed: 3, 2021,] [added: 2, 2022,] are incorporated by reference in Part III hereof.

| Item 1. | | | [removed: [Business](#i43a0f166e9174c8d9d706b477ac3a79e_13)] [added: [Business](#iebcb91b2b75a4807a5a4d5cb7021397e_13)] | | | [removed: [3](#i43a0f166e9174c8d9d706b477ac3a79e_13)] [added: [3](#iebcb91b2b75a4807a5a4d5cb7021397e_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i43a0f166e9174c8d9d706b477ac3a79e_49)] [added: Factors](#iebcb91b2b75a4807a5a4d5cb7021397e_49)] | | | [removed: [21](#i43a0f166e9174c8d9d706b477ac3a79e_49)] [added: [20](#iebcb91b2b75a4807a5a4d5cb7021397e_49)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i43a0f166e9174c8d9d706b477ac3a79e_52)] [added: Comments](#iebcb91b2b75a4807a5a4d5cb7021397e_52)] | | | [removed: [36](#i43a0f166e9174c8d9d706b477ac3a79e_52)] [added: [34](#iebcb91b2b75a4807a5a4d5cb7021397e_52)] | | |

| Item 2. | | | [removed: [Properties](#i43a0f166e9174c8d9d706b477ac3a79e_55)] [added: [Properties](#iebcb91b2b75a4807a5a4d5cb7021397e_55)] | | | [removed: [36](#i43a0f166e9174c8d9d706b477ac3a79e_55)] [added: [34](#iebcb91b2b75a4807a5a4d5cb7021397e_55)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i43a0f166e9174c8d9d706b477ac3a79e_61)] [added: Proceedings](#iebcb91b2b75a4807a5a4d5cb7021397e_61)] | | | [removed: [36](#i43a0f166e9174c8d9d706b477ac3a79e_61)] [added: [34](#iebcb91b2b75a4807a5a4d5cb7021397e_61)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i43a0f166e9174c8d9d706b477ac3a79e_64)] [added: Disclosures](#iebcb91b2b75a4807a5a4d5cb7021397e_64)] | | | [removed: [36](#i43a0f166e9174c8d9d706b477ac3a79e_64)] [added: [34](#iebcb91b2b75a4807a5a4d5cb7021397e_64)] | | |

| Item 5. | | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i43a0f166e9174c8d9d706b477ac3a79e_70)] [added: Securities](#iebcb91b2b75a4807a5a4d5cb7021397e_70)] | | | [removed: [37](#i43a0f166e9174c8d9d706b477ac3a79e_70)] [added: [35](#iebcb91b2b75a4807a5a4d5cb7021397e_70)] | | |

| Item 6 | | | [removed: [\[Reserved\]](#i43a0f166e9174c8d9d706b477ac3a79e_73)] [added: [\[Reserved\]](#iebcb91b2b75a4807a5a4d5cb7021397e_73)] | | | [removed: [37](#i43a0f166e9174c8d9d706b477ac3a79e_73)] [added: [35](#iebcb91b2b75a4807a5a4d5cb7021397e_73)] | | |

| Item 7. | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i43a0f166e9174c8d9d706b477ac3a79e_76)] [added: Operations](#iebcb91b2b75a4807a5a4d5cb7021397e_76)] | | | [removed: [38](#i43a0f166e9174c8d9d706b477ac3a79e_76)] [added: [36](#iebcb91b2b75a4807a5a4d5cb7021397e_76)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i43a0f166e9174c8d9d706b477ac3a79e_109)] [added: Risk](#iebcb91b2b75a4807a5a4d5cb7021397e_115)] | | | [removed: [52](#i43a0f166e9174c8d9d706b477ac3a79e_109)] [added: [50](#iebcb91b2b75a4807a5a4d5cb7021397e_115)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i43a0f166e9174c8d9d706b477ac3a79e_112)] [added: Data](#iebcb91b2b75a4807a5a4d5cb7021397e_118)] | | | [removed: [54](#i43a0f166e9174c8d9d706b477ac3a79e_112)] [added: [52](#iebcb91b2b75a4807a5a4d5cb7021397e_118)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i43a0f166e9174c8d9d706b477ac3a79e_202)] [added: Disclosure](#iebcb91b2b75a4807a5a4d5cb7021397e_211)] | | | [removed: [95](#i43a0f166e9174c8d9d706b477ac3a79e_202)] [added: [92](#iebcb91b2b75a4807a5a4d5cb7021397e_211)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i43a0f166e9174c8d9d706b477ac3a79e_205)] [added: Procedures](#iebcb91b2b75a4807a5a4d5cb7021397e_214)] | | | [removed: [95](#i43a0f166e9174c8d9d706b477ac3a79e_205)] [added: [92](#iebcb91b2b75a4807a5a4d5cb7021397e_214)] | | |

| Item 9B. | | | [Other [removed: Information](#i43a0f166e9174c8d9d706b477ac3a79e_208)] [added: Information](#iebcb91b2b75a4807a5a4d5cb7021397e_217)] | | | [removed: [95](#i43a0f166e9174c8d9d706b477ac3a79e_208)] [added: [92](#iebcb91b2b75a4807a5a4d5cb7021397e_217)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i43a0f166e9174c8d9d706b477ac3a79e_214)] [added: Governance](#iebcb91b2b75a4807a5a4d5cb7021397e_223)] | | | [removed: [96](#i43a0f166e9174c8d9d706b477ac3a79e_214)] [added: [93](#iebcb91b2b75a4807a5a4d5cb7021397e_223)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i43a0f166e9174c8d9d706b477ac3a79e_217)] [added: Compensation](#iebcb91b2b75a4807a5a4d5cb7021397e_226)] | | | [removed: [96](#i43a0f166e9174c8d9d706b477ac3a79e_217)] [added: [93](#iebcb91b2b75a4807a5a4d5cb7021397e_226)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i43a0f166e9174c8d9d706b477ac3a79e_220)] [added: Matters](#iebcb91b2b75a4807a5a4d5cb7021397e_229)] | | | [removed: [96](#i43a0f166e9174c8d9d706b477ac3a79e_220)] [added: [93](#iebcb91b2b75a4807a5a4d5cb7021397e_229)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i43a0f166e9174c8d9d706b477ac3a79e_223)] [added: Independence](#iebcb91b2b75a4807a5a4d5cb7021397e_232)] | | | [removed: [96](#i43a0f166e9174c8d9d706b477ac3a79e_223)] [added: [93](#iebcb91b2b75a4807a5a4d5cb7021397e_232)] | | |

| Item 14. | | | [Principal Accounting Fees and [removed: Services](#i43a0f166e9174c8d9d706b477ac3a79e_226)] [added: Services](#iebcb91b2b75a4807a5a4d5cb7021397e_235)] | | | [removed: [96](#i43a0f166e9174c8d9d706b477ac3a79e_226)] [added: [93](#iebcb91b2b75a4807a5a4d5cb7021397e_235)] | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#i43a0f166e9174c8d9d706b477ac3a79e_232)] [added: Schedules](#iebcb91b2b75a4807a5a4d5cb7021397e_241)] | | | [removed: [96](#i43a0f166e9174c8d9d706b477ac3a79e_232)] [added: [94](#iebcb91b2b75a4807a5a4d5cb7021397e_241)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i43a0f166e9174c8d9d706b477ac3a79e_238)] [added: Summary](#iebcb91b2b75a4807a5a4d5cb7021397e_247)] | | | [removed: [99](#i43a0f166e9174c8d9d706b477ac3a79e_238)] [added: [96](#iebcb91b2b75a4807a5a4d5cb7021397e_247)] | | |

*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, [added: fluctuations in foreign currency exchange rates,] strategic [removed: initiatives,] [added: investments,] industry positioning, customer acquisition and retention, the amount of annualized recurring revenue, revenue growth and anticipated impacts on our business of the ongoing COVID-19 pandemic and related public health measures.

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 fiscal [removed: 2022,] [added: 2023,] should be carefully reviewed.

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](#iebcb91b2b75a4807a5a4d5cb7021397e_2044) | | | [92](#iebcb91b2b75a4807a5a4d5cb7021397e_2044) | | |

| [Signatures](#iebcb91b2b75a4807a5a4d5cb7021397e_250) | | | | | | [97](#iebcb91b2b75a4807a5a4d5cb7021397e_250) | | |

| [Summary of Trademarks](#iebcb91b2b75a4807a5a4d5cb7021397e_253) | | | | | | [99](#iebcb91b2b75a4807a5a4d5cb7021397e_253) | | |

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

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

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

Our corporate headquarters is located in San Jose, California where we occupy approximately 1.1 million square feet of office [removed: space.][added: space as of December 2, 2022.]

The largest properties we occupy outside of the United States are [removed: the] [added: our] Bangalore, India and Noida, India offices which are approximately 0.4 million and 0.5 million square feet, respectively.

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

*[See Note 18 [removed: of](#i43a0f166e9174c8d9d706b477ac3a79e_190) [o](#i43a0f166e9174c8d9d706b477ac3a79e_190)[ur](#i43a0f166e9174c8d9d706b477ac3a79e_190) [](#i43a0f166e9174c8d9d706b477ac3a79e_190)[N](#i43a0f166e9174c8d9d706b477ac3a79e_190)[otes] [added: of our Notes] to Consolidated Financial [removed: Statements](#i43a0f166e9174c8d9d706b477ac3a79e_190) [for] [added: Statements for] further information regarding our lease [removed: obligations.](#i43a0f166e9174c8d9d706b477ac3a79e_190)*][added: obligations.](#iebcb91b2b75a4807a5a4d5cb7021397e_199)*]

Construction of a new building at our corporate headquarters in San Jose, California is substantially complete and was opened for occupancy in January 2023.

During fiscal 2022, we fully re-opened our offices and evolved to a hybrid work model.

We believe our existing facilities, both owned and leased, are in good operating condition and suitable for the conduct of our business.

As of December 3, 2021, we have not terminated any significant lease arrangements.

During fiscal 2021, our employees across all geographic regions continued to work from home due to the COVID-19 pandemic.

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.

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.

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

We believe our facilities continue to be suitable for the conduct of our business should we decide to fully reopen our facilities in the next twelve months.

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

According to the records of our transfer agent, there were [removed: 940] [added: 928] holders of record of our common stock on January [removed: 14, 2022.][added: 6, 2023.]

Below is a summary of stock repurchases for the three months ended December [removed: 3, 2021.][added: 2, 2022.]

*[See Note 14 of our Notes to Consolidated Financial Statements for information regarding our stock repurchase [removed: programs.](#i43a0f166e9174c8d9d706b477ac3a79e_178)*][added: programs.](#iebcb91b2b75a4807a5a4d5cb7021397e_187)*]

| Beginning repurchase authority | | | | | | | | | | | | | | | | | | | | | | | | $ | [removed: 14,434] [added: 8,700] | | | | |

| October [removed: 30] [added: 29] — December [removed: 3, 2021] [added: 2, 2022] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

(2)In September [removed: 2021,] [added: 2022,] we entered into a structured stock repurchase agreement with a large financial institution whereupon we provided them with a prepayment of [removed: $1] [added: $1.75] billion.

As of December [removed: 3, 2021,] [added: 2, 2022,] approximately [removed: $334] [added: $583] million of the prepayment remained under this agreement.

| September 3 — September 30, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Shares repurchased | | | | | | 1.1 | | | | | | $ | 371.04 | | | | | 1.1 | | | | | | $ | (400) | | | | |

| October 1 — October 28, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Shares repurchased | | | | | | 2.1 | | | | | | $ | 285.40 | | | | | 2.1 | | | | | | $ | (584) | | (2) | | |

| Shares repurchased | | | | | | 1.8 | | | | | | $ | 317.04 | | | | | 1.8 | | | | | | $ | (583) | | (2) | | |

| Total | | | | | | 5.0 | | | | | | | | | | | | 5.0 | | | | | | $ | 7,133 | | | | |

| September 4 — October 1, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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

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

| Shares repurchased | | | | | | 0.6 | | | | | | $ | 596.55 | | | | | 0.6 | | | | | | $ | (333) | | (2) | | |

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

| Total | | | | | | 1.6 | | | | | | | | | | | | 1.6 | | | | | | $ | 13,434 | | | | |

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

| [Consolidated Balance [removed: Sheets](#i43a0f166e9174c8d9d706b477ac3a79e_115)] [added: Sheets](#iebcb91b2b75a4807a5a4d5cb7021397e_121)] | | | [removed: [55](#i43a0f166e9174c8d9d706b477ac3a79e_115)] [added: [53](#iebcb91b2b75a4807a5a4d5cb7021397e_121)] | | |

| [Consolidated Statements of [removed: Income](#i43a0f166e9174c8d9d706b477ac3a79e_118)] [added: Income](#iebcb91b2b75a4807a5a4d5cb7021397e_124)] | | | [removed: [56](#i43a0f166e9174c8d9d706b477ac3a79e_118)] [added: [54](#iebcb91b2b75a4807a5a4d5cb7021397e_124)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i43a0f166e9174c8d9d706b477ac3a79e_121)] [added: Income](#iebcb91b2b75a4807a5a4d5cb7021397e_127)] | | | [removed: [57](#i43a0f166e9174c8d9d706b477ac3a79e_121)] [added: [55](#iebcb91b2b75a4807a5a4d5cb7021397e_127)] | | |

| [Consolidated Statements of Stockholders' [removed: Equity](#i43a0f166e9174c8d9d706b477ac3a79e_124)] [added: Equity](#iebcb91b2b75a4807a5a4d5cb7021397e_130)] | | | [removed: [58](#i43a0f166e9174c8d9d706b477ac3a79e_124)] [added: [56](#iebcb91b2b75a4807a5a4d5cb7021397e_130)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i43a0f166e9174c8d9d706b477ac3a79e_127)] [added: Flows](#iebcb91b2b75a4807a5a4d5cb7021397e_133)] | | | [removed: [59](#i43a0f166e9174c8d9d706b477ac3a79e_127)] [added: [57](#iebcb91b2b75a4807a5a4d5cb7021397e_133)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i43a0f166e9174c8d9d706b477ac3a79e_130)] [added: Statements](#iebcb91b2b75a4807a5a4d5cb7021397e_136)] | | | [removed: [60](#i43a0f166e9174c8d9d706b477ac3a79e_130)] [added: [58](#iebcb91b2b75a4807a5a4d5cb7021397e_136)] | | |

| [Report [removed: of KPMG LLP, Independent] [added: of](#iebcb91b2b75a4807a5a4d5cb7021397e_208) [Independent] Registered Public Accounting [removed: Firm](#i43a0f166e9174c8d9d706b477ac3a79e_199)] [added: Firm](#iebcb91b2b75a4807a5a4d5cb7021397e_208) (KPMG LLP[,](#iebcb91b2b75a4807a5a4d5cb7021397e_208) Santa Clara, California[,](#iebcb91b2b75a4807a5a4d5cb7021397e_208) PCAOB ID 185)] | | | [removed: [93](#i43a0f166e9174c8d9d706b477ac3a79e_199)] [added: [90](#iebcb91b2b75a4807a5a4d5cb7021397e_208)] | | |

| | | | December [added: 2, 2022 | | | | | | December] 3, 2021 | | | | | | November 27, 2020 | | |

| Cash and cash equivalents | | | $ | [removed: 3,844] [added: 4,236] | | | | | $ | [removed: 4,478] [added: 3,844] | |

| Short-term investments | | | [removed: 1,954] [added: 1,860] | | | | | | [removed: 1,514] [added: 1,954] | | |

| Trade receivables, net of allowances for doubtful accounts of [removed: $16] [added: $23] and of [removed: $21,] [added: $16,] respectively | | | [removed: 1,878] [added: 2,065] | | | | | | [removed: 1,398] [added: 1,878] | | |

| Prepaid expenses and other current assets | | | [removed: 993] [added: 835] | | | | | | [removed: 756] [added: 993] | | |

| Total current assets | | | [removed: 8,669] [added: 8,996] | | | | | | [removed: 8,146] [added: 8,669] | | |

| Property and equipment, net | | | [removed: 1,673] [added: 1,908] | | | | | | [removed: 1,517] [added: 1,673] | | |

| Operating lease right-of-use assets, net | | | [removed: 443] [added: 407] | | | | | | [removed: 487] [added: 443] | | |

| Goodwill | | | [removed: 12,668] [added: 12,787] | | | | | | [removed: 10,742] [added: 12,668] | | |

| Other intangibles, net | | | [removed: 1,820] [added: 1,449] | | | | | | [removed: 1,359] [added: 1,820] | | |

| Deferred income taxes | | | [removed: 1,085] [added: 777] | | | | | | [removed: 1,370] [added: 1,085] | | |

| Other assets | | | [removed: 883] [added: 841] | | | | | | [removed: 663] [added: 883] | | |

| Total assets | | | $ | [removed: 27,241] [added: 27,165] | | | | | $ | [removed: 24,284] [added: 27,241] | |

| Trade payables | | | $ | [removed: 312] [added: 379] | | | | | $ | [removed: 306] [added: 312] | |

| Accrued expenses | | | [removed: 1,736] [added: 1,790] | | | | | | [removed: 1,422] [added: 1,736] | | |

| Deferred revenue | | | [removed: 4,733] [added: 5,297] | | | | | | [removed: 3,629] [added: 4,733] | | |

| Income taxes payable | | | [removed: 54] [added: 75] | | | | | | [removed: 63] [added: 54] | | |

| Operating lease liabilities | | | [removed: 97] [added: 87] | | | | | | [removed: 92] [added: 97] | | |

| Total current liabilities | | | [removed: 6,932] [added: 8,128] | | | | | | [removed: 5,512] [added: 6,932] | | |

| Debt | | | [removed: 4,123] [added: 3,629] | | | | | | [removed: 4,117] [added: 4,123] | | |

| Deferred revenue | | | [removed: 145] [added: 117] | | | | | | [removed: 130] [added: 145] | | |

| Income taxes payable | | | [removed: 534] [added: 530] | | | | | | [removed: 529] [added: 534] | | |

| Deferred income taxes | | | [removed: 5] [added: 328] | | | | | | [removed: 10] [added: 183] | | | [added: | | | (1,501) | | |]

| Operating lease liabilities | | | [removed: 453] [added: 417] | | | | | | [removed: 499] [added: 453] | | |

| Total liabilities | | | [removed: 12,444] [added: 13,114] | | | | | | [removed: 11,020] [added: 12,444] | | |

| Common stock, $0.0001 par value; 900 shares authorized; 601 shares issued; [removed: 475] [added: 462] and [removed: 479] [added: 475] shares outstanding, respectively | | | — | | | | | | — | | |

| Additional paid-in-capital | | | [removed: 8,428] [added: 9,868] | | | | | | [removed: 7,357] [added: 8,428] | | |

| Retained earnings | | | [removed: 23,905] [added: 28,319] | | | | | | [removed: 19,611] [added: 23,905] | | |

| Accumulated other comprehensive income (loss) | | | [removed: (137)] [added: (293)] | | | | | | [removed: (158)] [added: (137)] | | |

| Treasury stock, at cost [removed: (126] [added: (139] and [removed: 122] [added: 126] shares, respectively) | | | [removed: (17,399)] [added: (23,843)] | | | | | | [removed: (13,546)] [added: (17,399)] | | |

| Total stockholders’ equity | | | [removed: 14,797] [added: 14,051] | | | | | | [removed: 13,264] [added: 14,797] | | |

| Total liabilities and stockholders’ equity | | | $ | [removed: 27,241] [added: 27,165] | | | | | $ | [removed: 24,284] [added: 27,241] | |

| | | | December [removed: 3, 2021] [added: 2, 2022] | | | | | | [removed: November 27, 2020] [added: December 3, 2021] | | | | | | November [removed: 29, 2019] [added: 27, 2020] | | |

| | | | December 2, 2022 | | | | | | December 3, 2021 | | |

| Debt | | | 500 | | | | | | — | | |

| Other liabilities | | | 293 | | | | | | 257 | | |

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

| Balances at December 2, 2022 | | | | | | 601 | | | | | | $ | — | | | | | $ | 9,868 | | | | | $ | 28,319 | | | | | $ | (293) | | | | | (139) | | | | | | $ | (23,843) | | | | | $ | 14,051 | |

| | | | December 2, 2022 | | | | | | December 3, 2021 | | | | | | November 27, 2020 | | |

| Net income | | | $ | 4,756 | | | | | $ | 4,822 | | | | | $ | 5,260 | |

Significant judgment is required in determining our current provision for income taxes and deferred tax assets or liabilities.

Our assumptions, judgments and estimates relative to the current provision for income taxes take into account our interpretation and application of current tax laws and possible outcomes of current and future examinations conducted by domestic and foreign tax authorities.

We have established reserves for income taxes to address potential exposures involving tax positions that could be challenged by tax authorities.

We regularly assess the likelihood of outcomes resulting from these examinations to determine the adequacy of our provision for income taxes and associated reserves.

Our policy is to record interest and penalties related to unrecognized tax benefits in income tax expense.

Prior year amounts have been recast to conform to current year presentation, which reflect changes to modernize the categorization of costs reported as advertising expenses, primarily associated with the inclusion of certain digital advertising costs.

There was no impact to the Consolidated Statements of Income resulting from this change.

There have been no recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during fiscal 2022 that are of significance or potential significance to us.

| Fiscal 2022 | | | | | | | | | | | | | | | | | | | | | | | |

| Revenue | | | $ | 12,842 | | | | | $ | 4,422 | | | | | $ | 342 | | | | | $ | 17,606 | |

| Cost of revenue | | | 561 | | | | | | 1,502 | | | | | | 102 | | | | | | 2,165 | | |

| Gross profit | | | $ | 12,281 | | | | | $ | 2,920 | | | | | $ | 240 | | | | | $ | 15,441 | |

The allowance for doubtful accounts was $23 million and $16 million as of December 2, 2022 and December 3, 2021, respectively.

*Figma*

On September 15, 2022, we entered into a definitive agreement under which we intend to acquire Figma, Inc. (“Figma”) for approximately $20 billion, comprised of approximately half cash and half stock, subject to customary purchase price adjustments.

Approximately 6 million additional restricted stock units will be granted to Figma’s Chief Executive Officer and employees that will vest over four years subsequent to closing.

The transaction is subject to regulatory approvals and customary closing conditions, and is expected to close in 2023.

We will be required to pay Figma a reverse termination fee of $1 billion if the transaction fails to receive regulatory clearance, assuming all other closing conditions have been satisfied or waived, or if it fails to close within 18 months from September 15, 2022.

Figma is a privately held company that provides a web-first collaborative product design platform.

Following the closing, we intend to integrate Figma into our Digital Media reportable segment for financial reporting purposes.

| Goodwill (2) | | | 915 | | | | | | N/A | | |

| Cash | | | $ | 657 | | | | | $ | — | | | | | $ | — | | | | | $ | 657 | |

| U.S. agency securities | | | 34 | | | | | | — | | | | | | — | | | | | | 34 | | |

| U.S. Treasury securities | | | 450 | | | | | | — | | | | | | (16) | | | | | | 434 | | |

| Total | | | | | | | | | $ | 1,860 | |

| U.S. agency securities | | | 34 | | | | | | — | | | | | | 34 | | | | | | — | | |

| U.S. Treasury securities | | | 434 | | | | | | — | | | | | | 434 | | | | | | — | | |

| Total assets | | | $ | 5,650 | | | | | $ | 3,700 | | | | | $ | 1,950 | | | | | $ | — | |

*[See Note 17 for further details regarding our debt.](#iebcb91b2b75a4807a5a4d5cb7021397e_196)*

When the forecasted transaction affects earnings, we reclassify the related gain or loss on the foreign currency revenue, foreign currency expense or Treasury lock cash flow hedge to revenue, operating expense or interest expense, as applicable.

| *(in millions)* | | | 2022 | | | | | | | | | | | | 2021 | | | | | | | | |

| Foreign exchange forward contracts | | | $ | (5) | | | | | $ | — | | | | | $ | — | |

| *(in millions)* | | | | | | 2022 | | | | | | 2021 | | |

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

ADOBE INC.

| Other liabilities | | | 252 | | | | | | 223 | | |

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

| Impacts of adoption of the new revenue standard | | | | | | — | | | | | | — | | | | | | — | | | | | | 442 | | | | | | — | | | | | | — | | | | | | — | | | | | | 442 | | |

| Deferred income taxes | | | 183 | | | | | | (1,501) | | | | | | 3 | | |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

to exchange cash collateral when the net fair value of certain derivative instruments fluctuates from contractually established thresholds.

Recently Adopted Accounting Guidance

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.

These updates require the measurement and recognition of expected credit losses for financial assets held at amortized cost, which include our trade receivables and contract assets.

The standard also requires that we recognize credit impairment losses related to our available-for-sale debt securities through an allowance for credit losses instead of a reduction in the cost basis.

On November 28, 2020, the beginning of our fiscal year 2021, we adopted the accounting requirements of the updated standard utilizing the modified retrospective method of transition.

The adoption of this standard did not have a material impact on our Consolidated Financial Statements and related disclosures.

There have been no other new accounting pronouncements made effective during fiscal 2021 that have significance, or potential significance, to our Consolidated Financial Statements.

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

experiences that span from analytics to commerce.

| Fiscal 2019 | | | | | | | | | | | | | | | | | | | | | | | |

| Revenue | | | $ | 7,707 | | | | | $ | 2,795 | | | | | $ | 669 | | | | | $ | 11,171 | |

| Cost of revenue | | | 290 | | | | | | 1,056 | | | | | | 327 | | | | | | 1,673 | | |

| Gross profit | | | $ | 7,417 | | | | | $ | 1,739 | | | | | $ | 342 | | | | | $ | 9,498 | |

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

During fiscal 2021, 2020 and 2019, our allowance for doubtful accounts activities were as follows:

| Increase due to acquisition | | | | | | 3 | | | | | | — | | | | | | — | | |

| 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.

The fair values assigned to assets acquired and liabilities assumed are based on management’s best estimates and assumptions as of the reporting date.

Fair values associated with the net tax liabilities assumed and their related impact to goodwill were pending finalization as of the reporting date.

| Goodwill (2) | | | 865 | | | | | | N/A | | |

_________________________________________

Pro forma financial information has not been presented for the Frame.io acquisition as the impact to our Consolidated Financial Statements was not material.

Pro forma financial information has not been presented for the Workfront acquisition as the impact to our Consolidated Financial Statements was not material.

*Allegorithmic*

On January 23, 2019, we completed the acquisition of Allegorithmic, a privately held 3D editing and authoring software company for gaming and entertainment, and integrated it into our Digital Media reportable segment.

Prior to the acquisition, we held an equity interest that was accounted for as an equity-method investment.

We acquired the remaining equity interest for approximately $106 million in cash consideration.

The total purchase price, inclusive of the acquisition-date fair-value of our pre-existing equity interest, was approximately $161 million.

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 December [removed: 3, 2021.][added: 2, 2022.]

Based on their evaluation as of December [removed: 3, 2021,] [added: 2, 2022,] 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, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal [removed: controls] [added: control] over financial reporting will prevent all errors and all fraud.

Management’s Annual Report on Internal [removed: Controls] [added: Control] over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal [removed: controls] [added: control] over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended).

Our management assessed the effectiveness of our internal [removed: controls] [added: control] over financial reporting as of December [removed: 3, 2021.][added: 2, 2022.]

Our management has concluded that, as of December [removed: 3, 2021,] [added: 2, 2022,] our internal [removed: controls] [added: control] over financial reporting are effective based on these criteria.

KPMG LLP, the independent registered public accounting firm that audited our financial statements included in this Annual Report on Form 10-K, has issued an attestation report on our internal [removed: controls] [added: control] over financial reporting, which is included herein.

Changes in Internal [removed: Controls] [added: Control] over Financial Reporting

There were no changes in our internal [removed: controls] [added: control] over financial reporting during the quarter ended December [removed: 3, 2021] [added: 2, 2022] that have materially affected, or are reasonably likely to materially affect, our internal [removed: controls] [added: control] over financial reporting.

PART III

Not applicable.

PART III

The information required by this Item 10 of Form 10-K that is found in our [removed: 2022] [added: 2023] Proxy Statement to be filed with the SEC in connection with the solicitation of proxies for the Company’s [removed: 2022] [added: 2023] Annual Meeting of Stockholders [removed: (“2022] [added: (“2023] Proxy Statement”) is incorporated herein by reference to our [removed: 2022] [added: 2023] Proxy Statement.

The [removed: 2022] [added: 2023] 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](#i43a0f166e9174c8d9d706b477ac3a79e_46) [the] [added: [see the] section [removed: titled](#i43a0f166e9174c8d9d706b477ac3a79e_46) [“Executive Officers”](#i43a0f166e9174c8d9d706b477ac3a79e_46)] [added: titled “Executive Officers”](#iebcb91b2b75a4807a5a4d5cb7021397e_46)] in [Part I, Item [removed: 1](#i43a0f166e9174c8d9d706b477ac3a79e_46)] [added: 1](#iebcb91b2b75a4807a5a4d5cb7021397e_46)] of this report.

The information required by this Item 11 of Form 10-K is incorporated herein by reference to our [removed: 2022] [added: 2023] Proxy Statement.

The information required by this Item 12 of Form 10-K is incorporated herein by reference to our [removed: 2022] [added: 2023] Proxy Statement.

The information required by this Item 13 of Form 10-K is incorporated herein by reference to our [removed: 2022] [added: 2023] Proxy Statement.

The information required by this Item 14 of Form 10-K is incorporated herein by reference to our [removed: 2022] [added: 2023] Proxy Statement.

[See Index to Consolidated Financial Statements in Part II, Item [removed: 8](#i43a0f166e9174c8d9d706b477ac3a79e_112)] [added: 8](#iebcb91b2b75a4807a5a4d5cb7021397e_118)] of this Form 10-K.

| 4.5 | | | | | | [Description of Adobe’s Common [removed: Stock](https://www.sec.gov/Archives/edgar/data/796343/000079634322000032/adbeex45fy21.htm)] [added: Stock](https://www.sec.gov/Archives/edgar/data/796343/000079634323000007/adbeex45fy22.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| [removed: 10.2D] [added: 10.3F] | | | | | | [removed: [2019] [added: [2022] 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*](https://www.sec.gov/Archives/edgar/data/796343/000079634322000056/adbeex1028-k12722.htm)] | | | | | | 8-K | | | | | | [removed: 1/28/19] [added: 1/27/22] | | | | | | 10.2 | | | | | | 000-15175 | | | | | | | | |

| [removed: 10.2E] [added: 10.3G] | | | | | | [Form of [removed: 2019] [added: 2022] Performance Share Award Grant Notice and Award Agreement pursuant to [removed: 2019] [added: 2022] 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*](https://www.sec.gov/Archives/edgar/data/796343/000079634322000056/adbeex1038-k12722.htm)] | | | | | | 8-K | | | | | | [removed: 1/28/19] [added: 1/27/22] | | | | | | 10.3 | | | | | | 000-15175 | | | | | | | | |

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

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

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

| 10.7 | | | | | | [Credit Agreement, dated as of [removed: October 17, 2018,] [added: June 30, 2022,] among [removed: Adobe Inc. and] [added: the Company,] certain subsidiaries [removed: as Borrowers, JPMorgan Chase Bank, N.A., Wells Fargo Bank National Association, U.S Bank National Association, Société Générale S.A. as Co-Syndication Agents,] [added: of the Company party thereto,] Bank of America, N.A. as Administrative Agent and [removed: Swing Line Lender, and] the [removed: Other Lenders Party Thereto](http://www.sec.gov/Archives/edgar/data/796343/000079634318000172/exhibit101revolvingcredita.htm)] [added: other lenders party thereto](https://www.sec.gov/Archives/edgar/data/796343/000119312522186450/d368091dex101.htm)] | | | | | | 8-K | | | | | | [removed: 10/19/18] [added: 7/1/22] | | | | | | 10.1 | | | | | | 000-15175 | | | | | | | | |

| [removed: 10.10] [added: 10.9] | | | | | | [removed: [2021] [added: [2022] Executive Annual Incentive [removed: Plan, as amended and restated*](http://www.sec.gov/Archives/edgar/data/796343/000079634321000028/adbeex1048-k.htm)] [added: Plan*](https://www.sec.gov/Archives/edgar/data/796343/000079634322000056/adbeex1048-k12722.htm)] | | | | | | 8-K | | | | | | [removed: 1/27/21] [added: 1/27/22] | | | | | | 10.4 | | | | | | 000-15175 | | | | | | | | |

| [removed: 10.11] [added: 10.10] | | | | | | [Description of 2021 and 2022 Director Compensation*](http://www.sec.gov/Archives/edgar/data/796343/000079634321000004/adbeex1012fy20.htm) | | | | | | 10-K | | | | | | 1/15/21 | | | | | | 10.12 | | | | | | 000-15175 | | | | | | | | |

| 21 | | | | | | [Subsidiaries of the [removed: Registrant](https://www.sec.gov/Archives/edgar/data/796343/000079634322000032/adbeex21fy21.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/796343/000079634323000007/adbeex21fy22.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting Firm, KPMG [removed: LLP](https://www.sec.gov/Archives/edgar/data/796343/000079634322000032/adbeex231fy21.htm)] [added: LLP](https://www.sec.gov/Archives/edgar/data/796343/000079634323000007/adbeex231fy22.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 24.1 | | | | | | [Power of Attorney (set forth on the signature page to this Annual Report on Form [removed: 10-K)](#i43a0f166e9174c8d9d706b477ac3a79e_241)] [added: 10-K)](#iebcb91b2b75a4807a5a4d5cb7021397e_250)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 31.1 | | | | | | [Certification of Chief Executive Officer, as required by Rule 13a-14(a) of the Securities Exchange Act of [removed: 1934](https://www.sec.gov/Archives/edgar/data/796343/000079634322000032/adbeex311fy21.htm)] [added: 1934](https://www.sec.gov/Archives/edgar/data/796343/000079634323000007/adbeex311fy22.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 31.2 | | | | | | [Certification of Chief Financial Officer, as required by Rule 13a-14(a) of the Securities Exchange Act of [removed: 1934](https://www.sec.gov/Archives/edgar/data/796343/000079634322000032/adbeex312fy21.htm)] [added: 1934](https://www.sec.gov/Archives/edgar/data/796343/000079634323000007/adbeex312fy22.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 32.1 | | | | | | [Certification of Chief Executive Officer, as required by Rule 13a-14(b) of the Securities Exchange Act of [removed: 1934†](https://www.sec.gov/Archives/edgar/data/796343/000079634322000032/adbeex321fy21.htm)] [added: 1934†](https://www.sec.gov/Archives/edgar/data/796343/000079634323000007/adbeex321fy22.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 32.2 | | | | | | [Certification of Chief Financial Officer, as required by Rule 13a-14(b) of the Securities Exchange Act of [removed: 1934†](https://www.sec.gov/Archives/edgar/data/796343/000079634322000032/adbeex322fy21.htm)] [added: 1934†](https://www.sec.gov/Archives/edgar/data/796343/000079634323000007/adbeex322fy22.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 2.1 | | | | | | [Agreement and Plan of Merger, dated as of September 15, 2022, by and among Adobe Inc., Figma, Inc., Saratoga Merger Sub I, Inc., Saratoga Merger Sub II, LLC and Fortis Advisors LLC](https://www.sec.gov/Archives/edgar/data/796343/000114036122033412/ny20005310x2_ex2-1.htm) | | | | | | 8-K | | | | | | 9/15/22 | | | | | | 2.1 | | | | | | 000-15175 | | | | | | | | |

| 10.11 | | | | | | [Description of 2023 and 2024 Director Compensation*](https://www.sec.gov/Archives/edgar/data/796343/000079634323000007/adbeex1011fy22.htm) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | X | | |

| 10.12 | | | | | | [Voting and Support Agreement, dated as of September 15, 2022, by and among Adobe Inc. and the Key Stockholders party thereto](https://www.sec.gov/Archives/edgar/data/796343/000114036122033412/ny20005310x2_ex10-1.htm) | | | | | | 8-K | | | | | | 9/15/22 | | | | | | 10.1 | | | | | | 000-15175 | | | | | | | | |

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| | | | | | | | | | | | | Incorporated by Reference | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Exhibit Number | | | | | | Exhibit Description | | | | | | Form | | | | | | Filing Date | | | | | | Exhibit Number | | | | | | SEC File No. | | | | | | Filed Herewith | | |

Date: January [removed: 21, 2022][added: 17, 2023]

| /s/ SHANTANU NARAYEN | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ DANIEL DURN | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| Daniel Durn | | | | | | Executive Vice [removed: President,] [added: President and] Chief Financial Officer (Principal Financial Officer) | | | | | | | | |

| /s/ MARK GARFIELD | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| Mark Garfield | | | | | | Senior Vice President, [removed: Corporate Controller and] Chief Accounting Officer (Principal Accounting Officer) | | | | | | | | |

| /s/ FRANK CALDERONI | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ AMY BANSE | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ BRETT BIGGS | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ MELANIE BOULDEN | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ LAURA DESMOND | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ SPENCER NEUMANN | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ KATHLEEN OBERG | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ DHEERAJ PANDEY | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ DAVID RICKS | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ DAN ROSENSWEIG | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

| /s/ JOHN WARNOCK | | | | | | | | | | | | January [removed: 21, 2022] [added: 17, 2023] | | |

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Adobe Campaign

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