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REVENUE | 6 Months Ended
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May 30, 2025
Revenue [Abstract] |
REVENUE | REVENUE Segment Information Our segment results for the three months ended May 30, 2025 and May 31, 2024 were as follows:
(dollars in millions) | Digital Media |  | Digital Experience |  | Publishing and Advertising |  | Total
Three months ended May 30, 2025 |  |  |  |  |  |  |
Revenue | $ | 4,345 |  |  | $ | 1,457 |  |  | $ | 71 |  |  | $ | 5,873 |
Cost of revenue | 208 |  |  | 408 |  |  | 22 |  |  | 638 |
Gross profit | $ | 4,137 |  |  | $ | 1,049 |  |  | $ | 49 |  |  | $ | 5,235 |
Gross profit as a percentage of revenue | 95 | % |  | 72 | % |  | 69 | % |  | 89 | %
Three months ended May 31, 2024 |  |  |  |  |  |  |
Revenue | $ | 3,908 |  |  | $ | 1,327 |  |  | $ | 74 |  |  | $ | 5,309 |
Cost of revenue | 181 |  |  | 395 |  |  | 22 |  |  | 598 |
Gross profit | $ | 3,727 |  |  | $ | 932 |  |  | $ | 52 |  |  | $ | 4,711 |
Gross profit as a percentage of revenue | 95 | % |  | 70 | % |  | 70 | % |  | 89 | %
Our segment results for the six months ended May 30, 2025 and May 31, 2024 were as follows:
(dollars in millions) | Digital Media |  | Digital Experience |  | Publishing and Advertising |  | Total
Six months ended May 30, 2025 |  |  |  |  |  |  |
Revenue | $ | 8,572 |  |  | $ | 2,871 |  |  | $ | 144 |  |  | $ | 11,587 |
Cost of revenue | 407 |  |  | 810 |  |  | 43 |  |  | 1,260 |
Gross profit | $ | 8,165 |  |  | $ | 2,061 |  |  | $ | 101 |  |  | $ | 10,327 |
Gross profit as a percentage of revenue | 95 | % |  | 72 | % |  | 70 | % |  | 89 | %
Six months ended May 31, 2024 |  |  |  |  |  |  |
Revenue | $ | 7,724 |  |  | $ | 2,616 |  |  | $ | 151 |  |  | $ | 10,491 |
Cost of revenue | 352 |  |  | 792 |  |  | 44 |  |  | 1,188 |
Gross profit | $ | 7,372 |  |  | $ | 1,824 |  |  | $ | 107 |  |  | $ | 9,303 |
Gross profit as a percentage of revenue | 95 | % |  | 70 | % |  | 71 | % |  | 89 | %
Revenue by geographic area for the three and six months ended May 30, 2025 and May 31, 2024 were as follows:
| Three Months |  | Six Months
(in millions) | 2025 |  | 2024 |  | 2025 |  | 2024
Americas | $ | 3,500 |  |  | $ | 3,188 |  |  | $ | 6,905 |  |  | $ | 6,298 |
EMEA | 1,541 |  |  | 1,361 |  |  | 3,043 |  |  | 2,680 |
APAC | 832 |  |  | 760 |  |  | 1,639 |  |  | 1,513 |
Total | $ | 5,873 |  |  | $ | 5,309 |  |  | $ | 11,587 |  |  | $ | 10,491 |
Subscription revenue by segment for the three and six months ended May 30, 2025 and May 31, 2024 were as follows:
| Three Months |  | Six Months
(in millions) | 2025 |  | 2024 |  | 2025 |  | 2024
Digital Media | $ | 4,280 |  |  | $ | 3,828 |  |  | $ | 8,439 |  |  | $ | 7,553 |
Digital Experience | 1,334 |  |  | 1,204 |  |  | 2,631 |  |  | 2,368 |
Publishing and Advertising | 27 |  |  | 28 |  |  | 54 |  |  | 55 |
Total subscription revenue | $ | 5,641 |  |  | $ | 5,060 |  |  | $ | 11,124 |  |  | $ | 9,976 |
Digital Media and Digital Experience subscription revenue by customer group for the three and six months ended May 30, 2025 and May 31, 2024 were as follows:
| Three Months |  | Six Months
(in millions) | 2025 |  | 2024 |  | 2025 |  | 2024
Creative and Marketing Professionals | $ | 4,019 |  |  | $ | 3,643 |  |  | $ | 7,941 |  |  | $ | 7,193 |
Business Professionals and Consumers | 1,595 |  |  | 1,389 |  |  | 3,129 |  |  | 2,728 |
Total Digital Media and Digital Experience subscription revenue | $ | 5,614 |  |  | $ | 5,032 |  |  | $ | 11,070 |  |  | $ | 9,921 |
Contract Balances A receivable is recorded when an unconditional right to invoice and receive payment exists, such that only the passage of time is required before payment of consideration is due. Included in trade receivables on the condensed consolidated balance sheets are unbilled receivable balances which have not yet been invoiced, and are typically related to license revenue or services which are delivered prior to invoicing. As of May 30, 2025, the balance of trade receivables, net of allowances for doubtful accounts, was $1.74 billion, inclusive of unbilled receivables of $92 million. As of November 29, 2024, the balance of trade receivables, net of allowances for doubtful accounts, was $2.07 billion, inclusive of unbilled receivables of $66 million. We maintain an allowance for doubtful accounts which reflects our best estimate of potentially uncollectible trade receivables and is based on both specific and general reserves. We maintain general reserves on a collective basis by considering factors such as historical experience, credit-worthiness, the age of the trade receivable balances, current economic conditions and a reasonable and supportable forecast of future economic conditions. The allowance for doubtful accounts was $16 million and $14 million as of May 30, 2025 and November 29, 2024, respectively. A contract asset is recognized when a conditional right to consideration exists and transfer of control has occurred. Contract assets are included in prepaid expenses and other current assets for the current portion and other assets for the long-term portion on the condensed consolidated balance sheets. We regularly review contract asset balances for impairment, considering factors such as historical experience, credit-worthiness, age of the balance, current economic conditions and a reasonable and supportable forecast of future economic conditions. Contract asset impairments were not material for the six months ended May 30, 2025. Contract assets were $224 million and $248 million as of May 30, 2025 and November 29, 2024, respectively. Deferred revenue primarily consists of billings or payments received in advance of revenue recognition from subscription services, including non-cancellable and non-refundable committed funds and refundable customer deposits. Deferred revenue is recognized as revenue when transfer of control to customers has occurred. As of May 30, 2025, the balance of deferred revenue was $6.33 billion, which includes $87 million of refundable customer deposits. Arrangements with some of our enterprise customers with non-cancellable and non-refundable committed funds provide options to either renew monthly on-premise term-based licenses or use some or all funds to purchase other Adobe products or services. Non-cancellable and non-refundable committed funds related to these agreements comprised approximately 4% of the total deferred revenue. As of November 29, 2024, the balance of deferred revenue was $6.26 billion. During the three and six months ended May 30, 2025, approximately $1.76 billion and $4.63 billion of revenue, respectively, was recognized that was included in the balance of deferred revenue as of November 29, 2024. Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and unbilled amounts that will be recognized as revenue in future periods. As of May 30, 2025, remaining performance obligations were approximately $19.69 billion. Non-cancellable and non-refundable funds related to some of our enterprise customer agreements referred to above comprised approximately 4% of the total remaining performance obligations. Approximately 67% of the remaining performance obligations, excluding the aforementioned enterprise customer agreements, are expected to be recognized over the next 12 months with the remainder recognized thereafter. Incremental costs of obtaining a contract with a customer are capitalized if we expect the benefit of those costs to be longer than one year and primarily relate to sales commissions paid to our sales force personnel. Capitalized contract acquisition costs are included in prepaid expenses and other current assets for the current portion and other assets for the long-term portion on the condensed consolidated balance sheets. Capitalized contract acquisition costs were $730 million and $717 million as of May 30, 2025 and November 29, 2024, respectively. We record refund liabilities for amounts that may be subject to future refunds, which include sales returns reserves and customer rebates and credits. Refund liabilities are included in accrued expenses and other current liabilities on the condensed consolidated balance sheets. Refund liabilities were $119 million and $141 million as of May 30, 2025 and November 29, 2024, respectively.

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