SEGMENTS

We report segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reportable segments.

Our CEO, the chief operating decision maker, reviews revenue and gross margin information for each of our reportable segments, but does not review operating expenses on a segment by segment basis. In addition, with the exception of goodwill and intangible assets, we do not identify or allocate our assets by the reportable segments.

Effective in fiscal 2018, our business organized into three reportable segments: Digital Media, Digital Experience (formerly Digital Marketing), and Publishing (formerly Print and Publishing). These segments provide our senior management with a comprehensive financial view of our key businesses. Our segments are aligned around our two strategic growth opportunities described above, placing our Publishing business in a third segment that contains some of our mature products and solutions.

Additionally, in the first quarter of fiscal 2018, we moved our legacy enterprise offerings—Adobe Connect web conferencing platform and Adobe LiveCycle, an enterprise document and forms platform—from our Digital Experience segment into Publishing, in order to more closely align our Digital Experience business with the strategic growth opportunity. Prior year information in the tables below have been reclassified to reflect this change.

We have the following reportable segments:

•

Digital Media—Our Digital Media segment provides tools and solutions that enable individuals, small and medium businesses and enterprises to create, publish, promote and monetize their digital content anywhere. Our customers include traditional content creators, web application developers and digital media professionals, as well as their management in marketing departments and agencies, companies and publishers. Our customers also include knowledge workers who create, collaborate and distribute documents.


•	Digital Experience—Our Digital Experience segment provides solutions and services for how digital advertising and marketing are created, managed, executed, measured and optimized. Our customers include digital marketers, advertisers, publishers, merchandisers, web analysts, chief marketing officers, chief information officers and chief revenue officers.


•	Publishing—Our Publishing segment addresses market opportunities ranging from the diverse authoring and publishing needs of technical and business publishing to our legacy type and OEM printing businesses. It also includes our web conferencing and document and forms platforms effective the first quarter of fiscal 2018.

Our segment results for the three months ended June 1, 2018 and June 2, 2017 were as follows (dollars in thousands):



	Digital Media			Digital Experience			Publishing			Total
Three months ended June 1, 2018
Revenue	$	1,546,424		$	585,952		$	62,984		$	2,195,360
Cost of revenue	54,760			220,696			5,888			281,344
Gross profit	$	1,491,664		$	365,256		$	57,096		$	1,914,016
Gross profit as a percentage of revenue	96		%	62		%	91		%	87		%
Three months ended June 2, 2017
Revenue	$	1,211,988		$	495,415		$	64,787		$	1,772,190
Cost of revenue	58,350			175,164			5,846			239,360
Gross profit	$	1,153,638		$	320,251		$	58,941		$	1,532,830
Gross profit as a percentage of revenue	95		%	65		%	91		%	86		%

Our segment results for the six months ended June 1, 2018 and June 2, 2017 were as follows (dollars in thousands):



	Digital Media			Digital Experience			Publishing			Total
Six months ended June 1, 2018
Revenue	$	3,006,985		$	1,140,059		$	127,263		$	4,274,307
Cost of revenue	110,229			419,488			10,529			540,246
Gross profit	$	2,896,756		$	720,571		$	116,734		$	3,734,061
Gross profit as a percentage of revenue	96		%	63		%	92		%	87		%
Six months ended June 2, 2017
Revenue	$	2,350,067		$	972,687		$	131,082		$	3,453,836
Cost of revenue	113,402			351,927			11,368			476,697
Gross profit	$	2,236,665		$	620,760		$	119,714		$	2,977,139
Gross profit as a percentage of revenue	95		%	64		%	91		%	86		%