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. This segment also includes our commerce platform offerings from the Magento acquisition in the third quarter of fiscal 2018.


•	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 August 31, 2018 and September 1, 2017 were as follows (dollars in thousands):



	Digital Media			Digital Experience			Publishing			Total
Three months ended August 31, 2018
Revenue	$	1,608,875		$	613,983		$	68,218		$	2,291,076
Cost of revenue	61,417			227,731			6,344			295,492
Gross profit	$	1,547,458		$	386,252		$	61,874		$	1,995,584
Gross profit as a percentage of revenue	96		%	63		%	91		%	87		%
Three months ended September 1, 2017
Revenue	$	1,270,215		$	507,764		$	63,095		$	1,841,074
Cost of revenue	69,533			187,647			5,742			262,922
Gross profit	$	1,200,682		$	320,117		$	57,353		$	1,578,152
Gross profit as a percentage of revenue	95		%	63		%	91		%	86		%

Our segment results for the nine months ended August 31, 2018 and September 1, 2017 were as follows (dollars in thousands):



	Digital Media			Digital Experience			Publishing			Total
Nine months ended August 31, 2018
Revenue	$	4,615,860		$	1,754,042		$	195,481		$	6,565,383
Cost of revenue	171,646			647,219			16,873			835,738
Gross profit	$	4,444,214		$	1,106,823		$	178,608		$	5,729,645
Gross profit as a percentage of revenue	96		%	63		%	91		%	87		%
Nine months ended September 1, 2017
Revenue	$	3,620,282		$	1,480,451		$	194,177		$	5,294,910
Cost of revenue	182,935			539,574			17,110			739,619
Gross profit	$	3,437,347		$	940,877		$	177,067		$	4,555,291
Gross profit as a percentage of revenue	95		%	64		%	91		%	86		%