Adobe's 10-Q for the third quarter of fiscal 2024 highlights strong performance in both its Digital Media and Digital Experience segments. The company's Digital Media segment, which includes Creative Cloud and Document Cloud offerings, experienced robust growth in software-based subscription revenue. Creative Cloud, with its desktop tools, mobile apps, and cloud-based services, saw an increase in Annualized Recurring Revenue (ARR) to $13.45 billion, up from $12.49 billion in fiscal 2023. Document Cloud ARR also grew to $3.31 billion, up from $2.84 billion in fiscal 2023. Total Digital Media ARR reached $16.76 billion at the end of the third quarter of fiscal 2024, compared to $15.33 billion in fiscal 2023.
This growth in ARR positively impacted Adobe's revenue, with Creative revenue reaching $3.19 billion in the third quarter of fiscal 2024, representing a 10% year-over-year increase. Document Cloud revenue also saw significant growth, reaching $807 million, an 18% year-over-year increase. The total Digital Media segment revenue grew to $4.00 billion in the third quarter of fiscal 2024, up from $3.59 billion in the same period of fiscal 2023, driven by strong net new user growth.
In the Digital Experience segment, which includes the Adobe Experience Cloud apps and services, revenue reached $1.35 billion in the third quarter of fiscal 2024, up from $1.23 billion in the same period of fiscal 2023, representing a 10% year-over-year growth. Subscription revenue within the Digital Experience segment also showed strong growth, reaching $1.23 billion, up 12% year-over-year.
Adobe attributes its success in driving growth to its innovative product roadmap, AI-powered solutions, and a data-driven operating model (DDOM). The company's focus on delivering new features and products, such as Adobe Express and Adobe Firefly, has attracted new users while providing enhanced technologies to existing customers.
The 10-Q also highlights Adobe's exposure to macroeconomic conditions, including global inflationary pressures, interest rates, foreign currency exchange rate fluctuations, and geopolitical pressures. While the company's revenue and earnings are relatively predictable due to its subscription-based business model, the broader implications of these macroeconomic events on its business remain uncertain.
In terms of critical accounting policies, Adobe emphasizes the impact of assumptions, judgments, and estimates on the reported amounts of assets, liabilities, revenue, and expenses. The company considers revenue recognition and income taxes as its critical accounting policies, with historical assumptions, judgments, and estimates not differing materially from actual results.
Following these announcements, the company's shares moved -1.2%, and are now trading at a price of $517.9. Check out the company's full 10-Q submission here.
