Adobe Inc. (NASDAQ:ADBE) Q1 2023 Earnings Call Transcript

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Shantanu Narayen: Well, for a couple of years right now, we’ve been really focused on what we’ve called in the past, the data-driven operating model and really being pretty focused on driving the business both with the narrative and the number. And so I think as we continue to, as David mentioned, have different products. And he is really focused on how we are acquiring them, how are we engaging them, what’s the usage, how do we make sure they are getting value for the product, how do we continuously tell them about what’s new. And then I think as David has come in and introduced the notion of product PLG, I think that part has also really started to reflect in making sure that customers know that we’re building products and features that are relevant for the pain points that they have.

So I would say the underlying business, while they are sort of the digital imperative, I wouldn’t underestimate the incredible execution that the team continues to do on that or in DX. I mean how do you look at the solutions we’re selling? How do you understand cross-sell? How do you understand upsell? And I think the hours and hours of work that goes in is sometimes not appreciated, but I’m incredibly respectful and appreciative of what the teams have done. So a lot of execution is, I think, the short answer.

Jake Roberge: Great. Thanks for taking my questions.

Operator: And we will take the next question from the line of Brad Sills with Bank of America. Please go ahead.

Brad Sills: Great. Thank you so much. I wanted to ask about that top of funnel activity that you have been generating here with Communicator and the consumer segment with Creative Cloud Express, the success you’re seeing there, some exciting new announcements coming here. It sounds like on Creative Cloud Express enhancements here. Could we interpret that to mean that perhaps you’re pivoting more towards upselling those customers to some of these newer features and offerings that are coming with Creative Cloud Express away from that top of funnel activity that you’ve been very successful with thus far? Thank you.

David Wadhwani: Yes. As Shantanu talked about, it’s a holistic process. First of all, we’ve, over the last couple of years, spent a lot of time with product-led growth. What that gives us is confidence that when people come to Adobe.com and they get into the products, they are going to have a great onboarding experience. They are more likely to convert, and they are more likely to stay, which then starts to give us more confidence and growth in terms of improving what has already been a world class in terms of lifetime value. As that happens, we’ve been running more targeted campaigns with things for Photoshop and Acrobat and Illustrator as an example that are more targeted to the growth activities and the landing pages in the products themselves.

And we’ve actually been connecting all of our outbound marketing activities with landing pages in the products themselves. So we have been able to really increase our demand efforts and the ROI associated with that to bring more traffic to top of funnel. In addition to that, we have been investing a lot in growth loops. So people are able to now when using the products actually share some of €“ share the content out to stakeholders. Those stakeholders are able to look at that content, but also become top of funnel opportunity for us. If you look at Acrobat Web, as an example, we have seen a massive increase in terms of Acrobat Web usage driven by things like Share for Review. So, that drives more top of funnel for us. And then third is partnerships.

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