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Adobe Systems Incorporated (NASDAQ:ADBE)

F4Q09 Earnings Call

December 15, 2009 5:00 pm ET

Executives

Mike Saviage - Vice President, Investor Relations

Shantanu Narayen - President and Chief Executive Officer

Mark Garrett - Chief Financial Officer

Analysts

Michael Olson - Piper Jaffray

Steven Ashley - Robert W. Baird

Heather Bellini – ISI Group

Brent Thill - UBS

Ross MacMillan - Jeffries & Company

Sarah Friar - Goldman Sachs

Adam Holt - Morgan Stanley

Jay Vleeschauer - Ticonderoga Securities

Philip Rueppel - Wells Fargo Securities

Robert Breza - RBC Capital Markets

Brad Zelnick - Macquarrie

Sasa Zorovic - Janney Montgomery Scott

David M. Hilal - Friedman, Billings, Ramsey

Kash Rangan - Banc of America Merrill Lynch

Operator

Good day, everyone and welcome to the Adobe fourth quarter and fiscal year 2009 earnings conference call. As a reminder, today's call is being recorded. At this time, I would like turn the call over to Mr. Mike Saviage, Vice President of Investor Relations. Please go ahead, sir.

Mike Saviage

Good afternoon and thank you for joining us today. Joining me on the call are Adobe's President and CEO, Shantanu Narayen; as well as Mark Garrett, Executive Vice President and CFO.

In the call today, we will discuss Adobe's fourth quarter and fiscal year 2009 financial results. By now, you should have a copy of our earnings press release which crossed the wire approximately one hour ago. If you need a copy of the press release, you can go to adobe.com under the Company and Press links to find an electronic copy.

Before we get started, I want to emphasize that some of the information discussed in this call, particularly our revenue and operating model targets, and our forward-looking product plans, is based on information as of today, December 15, 2009, and contains forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the forward-looking statements disclosure in the earnings press release we issued today, as well as Adobe's SEC filings.

During this call, we will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in today's earnings release and on our investor relations website in the investor data sheet.

Call participants are advised that the audio of this conference call is being broadcast live over the Internet in Acrobat Connect Pro and is also being recorded for playback purposes. An archive of the call will be made available on Adobe's Investor Relations website for approximately 45 days and is the property of Adobe Systems. The audio and archive may not be re-recorded or otherwise reproduced or distributed without prior written permission from Adobe Systems.

I would now like to turn the call over to Shantanu.

Shantanu Narayen

Thanks, Mike and good afternoon. I am pleased to report that in Q4 we experienced an improvement in customer demand for our products across many of our major business areas and geographies and are reporting fourth quarter revenue of $757.3 million.

We have successfully navigated through a difficult environment in 2009. We are reporting annual revenue in fiscal 2009 of $2.95 billion and are proud of how we manage our business during the year.

Accomplishments during the year include we aligned the company around our key strategic imperatives and made investments that we believe will drive top line growth as the economy improves. We grew the relevance of the Adobe Flash platform as the standard for how the world engages with ideas and information across platforms, devices, and operating systems. We maintained our leadership in online video distribution and achieved significant momentum in the mobile space with our open screen project.

We continue to focus on improving the segmentation of our customer base and driving new adoption and penetration of our CS4 and Acrobat products. In the enterprise, we continue to make good progress with LiveCycle and achieved 23% year-over-year revenue growth with our Connect web conferencing business.

And finally, the addition of Omniture in Q4 uniquely positions Adobe to deliver a more complete customer workflow spanning content creation, delivery, and optimization. This strategic acquisition will help Adobe enable customers to realize greater return on their digital media investments and improve the end users' experiences across multiple screens.

Later I'll provide some highlights regarding our performance in Q4 and discuss our priorities for fiscal 2010. But first, I'll turn it over to Mark for a review of our financial results. Mark.

Mark Garrett

Thank you, Shantanu. Our earnings report today covers both Q4 and fiscal year 2009 results. Given the addition of Omniture mid quarter, I have quite a bit to cover today. First, I am going to provide some background on the Omniture business model which will help everyone understand how the addition of Omniture impacts Adobe's results going forward. Second, I am going to review our approach for how we will report our financials with Omniture folded in. As you know, we are reporting results today with roughly one month of Omniture's business concluded in both our fourth quarter and full year 2009 results. Finally, I will discuss results for both Q4 and fiscal 2009, followed by a discussion of our financial targets for Q1 and some color on fiscal year 2010, including the impact of Omniture.

Let's start with an overview of the Omniture business model and an explanation of some key metrics we will provide on a quarterly basis to help you understand Omniture business unit results and momentum.

The Omniture online marketing suite, which we either host and deliver to customers on demand, or provide as an on-premise solution, consists of Omniture's open business analytics platform and an integrated set of optimization applications for online analytics, channel analytics, visitor acquisition, and conversion. Our flagship Omniture product is site catalyst, which represents a majority of the reported Omniture revenue. Increasingly, however, the number and type of services Omniture provides has expanded into areas such as advertising and conversion optimization. Omniture also provides professional services, including training, consulting, and implementation services.

Once a customer contracts for Omniture services, there is generally an implementation period of 30 to 90 days before the products are configured for the customer's use, at which point revenue recognition commences. The value of the contract, including professional services contracted at the same time as the product purchased, is amortized as revenue over the term of the contract which generally ranges from one to three years.

Customers are invoiced on a monthly, quarter, or annual basis, some of which are invoiced in advance. As a result, Omniture deferred revenue represents only future revenues that have already been invoiced. Because Omniture customers generally sign contracts of one to three years in duration, and Omniture has achieved enterprise customer retention rates in excess of 90%, the visibility into future revenues, as well as future contract billings and cash flow, is high.

Although revenue from a customer contract is amortized over the contract term, the majority of the investment made by Omniture on behalf of the customer occurs during the implementation period. This includes training, implementation consulting and capital provisioning to support the customer's projected use of Omniture's hosted products.

To help analysts and investors track and understand the momentum in our Omniture business we will provide several key business metrics beginning in Q1 of fiscal 2010. They include the number of Omniture user transactions captured in the quarter; the enterprise customer retention rate -- this is an important metric which shows the percent of existing enterprise customers that have renewed their contracts during a quarter; the percentage of site catalyst revenue in our reported Omniture segment -- this is a data point Omniture has historically provided and shows how the mix of Omniture revenue is expanding beyond site catalyst, which anchors the analytics business.

We expect this mix to continue to diversify in favour of the new services and solutions we offer Omniture customers and it demonstrates we are expanding the number of products and solutions Omniture customers are adopting beyond analytics.

And finally, we will provide a gross margin for the Omniture business.

Our investor data sheet will contain this information beginning with Q1 results.

Next, I want to provide clarity around the impact of the write-down of Omniture deferred revenue due to business combination accounting guidelines, which is typical in a software company acquisition. Based on our analysis, we will lose a total of approximately $40 million in Omniture deferred revenue through the end of fiscal 2010. The impact of the write-down of Omniture deferred revenue is broken down by quarter as follows -- Q4 fiscal 2009, $8.3 million; Q1 fiscal 2010, an estimated loss of $14.7 million; Q2 fiscal 2010, an estimated loss of $8.6 million; Q3 fiscal 2010, an estimated loss of $5 million; Q4 fiscal 2010, an estimated loss of $3 million; and for the entire year of fiscal 2010, an estimated loss of $31.3 million in revenue.

We will report this impact on a quarterly basis. We do not plan to report specific pro forma revenue numbers but this impact to revenue information will be helpful to those who wish to factor this into any pro forma revenue models.

I will now comment on our full year fiscal 2009 results.

Adobe achieved revenue of $2.946 billion in the year, compared to $3.580 billion in fiscal 2008. The revenue contribution from our new Omniture business unit was $26.3 million for the year, which does not include the $8.3 million I mentioned that was written down pursuant to business combination accounting guidelines.

GAAP operating income in fiscal 2009 was $691 million, compared to $1.028 billion in fiscal 2008. GAAP operating margins for the year was 23.4% compared to 28.7% in fiscal 2008.

Non-GAAP operating income in fiscal 2009 was $1.035 billion, compared to $1.435 billion in fiscal 2008. Our non-GAAP operating margin was 35.1% in fiscal 2009, compared to 40.1% in fiscal 2008.

Adobe's annual GAAP net income was $387 million in fiscal 2009, compared to $872 million in fiscal 2008. Adobe's annual non-GAAP net income was $815 million in fiscal 2009 compared to $1.136 billion in fiscal 2008. GAAP diluted earnings per share in fiscal 2009 were $0.73 compared to $1.59 in fiscal 2008. Non-GAAP diluted earnings per share $1.54 in fiscal 2009 compared to $2.07 in fiscal 2008.

Given the economic environment throughout the year, we are pleased that our execution and cost controls helped to deliver solid profitability and operating margin.

Now I'd like to discuss our Q4 results. For the fourth quarter of fiscal 2009, Adobe achieved revenue of $757.3 million. This compares to $915.3 million reported in Q4 fiscal 2008 and $697.5 million reported last quarter. Our Q4 fiscal 2009 revenue result includes $26.3 million in Omniture revenue but excludes $8.3 million in deferred Omniture revenue in accordance with business combination accounting guidelines.

We exited the fourth quarter with approximately 9% of reported Q4 revenue in shippable backlog. Q4 GAAP operating expenses were $521.3 million, compared to $555.7 million reported in Q4 fiscal 2008 and $464.9 million last quarter.

Non-GAAP operating expenses in Q4 were $428.8 million, compared to $476.8 million reported for Q4 fiscal 2008 and $409.9 million last quarter.

GAAP operating income in Q4 fiscal 2009 was $153.6 million, or 20.3% of revenue. This compares to GAAP operating income of $273.2 million, or 29.8% of revenue in Q4 fiscal 2008, and $167.6 million, or 24% of revenue last quarter.

Non-GAAP operating income in Q4 fiscal 2009 was $265.2 million, or 35% of revenue. This compares to non-GAAP operating income of $374.9 million, or 41% of revenue in Q4 fiscal 2008, and $237.1 million, or 34% of revenue last quarter.

Adobe's effective GAAP tax rate in Q4 was 120% and the non-GAAP tax rate was 23.5%. The GAAP tax rate for Q4 was in line with the targeted Q4 tax rate we provided in September with the exception of a one-time charge related to our acquisition of Omniture. The charge was the tax cost of inter-company transactions necessary to license certain Omniture assets so that Omniture services can be offered to customers from Adobe companies going forward.

Q4 GAAP net loss was $32 million, compared to net income of $245.9 million reported in Q4 fiscal 2008, and net income of $136 million last quarter. A one-time tax charge and restructuring charges recognized in Q4 were the primary drivers for the GAAP net loss in the quarter.

Non-GAAP net income was $206.8 million, compared to $320.9 million reported in Q4 fiscal 2008, and $186.1 million last quarter. GAAP diluted net loss per share for Q4 fiscal 2009 was $0.06, based on 532 million weighted average shares. This compares with GAAP diluted earnings per share of $0.46 reported in Q4 fiscal 2008, based on 534.9 million weighted average shares, and GAAP diluted earnings per share of $0.26 reported last quarter based on 531.8 million weighted average shares.

Non-GAAP diluted earnings per share for Q4 fiscal 2009 were $0.39. This compares with non-GAAP diluted earnings per share of $0.60 in Q4 fiscal 2008 and $0.35 reported last quarter.

I will now discuss Adobe's revenue in Q4 by business segment. Creative Solutions segment revenue was $429.3 million, compared to $508.7 million in Q4 fiscal 2008 and $400.4 million last quarter. We experienced a pick-up in CS4 demand during the quarter, as well as strength in our hobbyist business due to the new Elements product launch.

Business productivity solutions revenue was $211.8 million, compared to $278 million in Q4 fiscal 2008 and $210 million last quarter. Within business productivity, knowledge worker revenue was $149.3 million, compared to $199 million in Q4 fiscal 2008, and $154.5 million last quarter. Despite a tough year, Acrobat had strong momentum as we exited Q4. Connect continued to perform well with record bookings in Q4 and 2009.

The other component of our business productivity segment is our enterprise business. In Q4, enterprise revenue was $62.5 million compared to $79 million in Q4 fiscal 2008, and $55.5 million last quarter. Sequential growth with our LiveCycle business resumed in Q4 and we enter Q1 with a solid pipeline.

Print and publishing segment revenue was $42.9 million compared to $52 million in Q4 fiscal 2008 and $42.2 million last quarter. Platform revenue in Q4 was $47 million, compared to $76.6 million in Q4 fiscal 2008, and $44.9 million last quarter. The year over year decline was due to the change in our business model as a result of the open screen project.

Finally, in our new Omniture segment, revenue for the partial quarter was $26.3 million, and as I indicated earlier, $8.3 million in Q4 Omniture deferred revenue was excluded from this result due to purchase accounting.

Turning to our geographic segments, results on a percent of revenue basis were as follows -- the Americas, 51%; Europe, 32%; Asia, 17%. Our business in North America showed signs of improvement. We had a strong quarter in Europe, particularly in Germany and France. This strength was offset by normal seasonal weakness in Asia.

Employees at the end of Q4 totaled 8,660 versus 7,564 at the end of the third quarter. We added a total of 1,184 employees as part of the Omniture acquisition. We also implemented a restructuring in Adobe during the fourth quarter which will result in a reduction of approximately 630 positions at Adobe. The purpose of the restructuring was to align our costs with our strategic priorities and our fiscal 2010 operating plan. Cost benefits from the restructuring will occur over several quarters as some affected employees remain on transition plans.

Our trade DSO in Q4 fiscal 2009 was 49 days and includes the impact of Omniture. This compares to 46 days in Q4 fiscal 2008 and 37 days last quarter. Excluding Omniture receivables our trade DSO in Q4 fiscal 2009 was 37 days. Our global channel inventory position at the end of the quarter was within company policy.

During the quarter, cash flow from operations was $254 million. Our ending cash and short-term investment position was $1.9 billion compared to $2.6 billion at the end of last quarter. We assumed an additional $137.4 million in cash from Omniture's balance sheet as part of the acquisition. We used cash as well as a draw-down on our $1 billion credit line to pay for the Omniture acquisition, the net of which was responsible for the sequential decline in our cash position. In Q4, we repurchased approximately 5.3 million shares at a total cost of $174 million. For the year, we have repurchased approximately 15.2 million shares, returning approximately $425 million to our stockholders.

This concludes my discussion of our financial results. I would now like to comment on our financial targets for the first quarter of fiscal 2010.

We are targeting a Q1 revenue range of $800 million to $850 million. This target range includes the benefit of an extra week of revenue in our first quarter due to our corporate 52, 53 week financial calendar. It also includes a full quarter of Omniture revenue but excludes the estimated loss of $14.7 million in Omniture revenue that I discussed earlier in accordance with business combination accounting guidelines. Despite the positive business momentum we experienced at the end of our fourth quarter, we are being prudent in our expectations given we historically experience a modest sequential seasonal decline in Q1.

As such, and assuming achievement of the mid-point of our targeted revenue range, our Q1 revenue expectations by business segment are as follows -- we expect our creative and business productivity segments to increase modestly on a sequential basis. We expect our platform business to decline and we expect print and publishing business to be flat with revenues achieved in Q4.

We expect our Omniture business to report revenue of between $78 million and $83 million, which does not include approximately $14.7 million in deferred revenue that I noted earlier.

From a geographic perspective, our Americas segment will benefit from a full quarter of Omniture revenue and grow sequentially. We also expect Asia to grow sequentially due to normal Q1 seasonal strength in Japan, and we expect EMEA to be flat on a quarter over quarter basis.

For margins, we are targeting a Q1 GAAP operating margin range of 19% to 21%, and a non-GAAP operating margin of 30% to 32%. We believe these margin target ranges represent the low point for fiscal year 2010 and will improve during the year as a result of realizing the full benefit of our recent restructuring, as well as new product launches that come later in the year.

We are targeting our Q1 share count to be 530 million to 532 million shares.

For non-operating income, we are targeting a loss of between $2 million and $4 million on both a GAAP and non-GAAP basis.

For our Q1 GAAP and non-GAAP effective tax rates, we are targeting approximately 24%.

These targets lead to a GAAP earnings per share range of $0.21 to $0.25 per share, and a non-GAAP earnings per share range of $0.34 to $0.39.

We are optimistic about fiscal 2010 but due to continuing economic uncertainty, we are not providing full year financial targets at this time. However, as we outlined at our analyst meeting in October, we remain committed to delivering at least a 34% non-GAAP operating margin for the year.

This concludes my section. I'd now like to turn the call back over to Shantanu.

Shantanu Narayen

Thanks, Mark. I'll spend the next few minutes reviewing business results from Q4. In creative solutions, our business was strong, benefitting from the increased demand for Creative Suite 4 in both North America and Europe. This positive trend was seen with our Creative Suites and extends to our digital imaging business.

We had a successful Q4 launch for our hobbyist products. Photoshop Elements version 8 for Windows and Mac and Premiere Elements Version 8 for Windows were launched in September and received great reviews. In particular, Photoshop Elements had strong results in the Mac retail market.

Our dynamic media business remains stable and momentum continued for Flash video on the web. Over the past two years, the annual volume of video streamed in the Flash format has grown 1,300%. Just last week, both Bandai and NHK in Japan announced they are switching to Flash video.

Scene 7 had a strong bookings quarter in Q4. We expanded our go-to-market reach with the introduction of Scene 7 services in the Asia-Pacific market. We expect synergy between our Scene 7 offering and our Omniture business in the targeting of e-commerce customers that can utilize both solutions.

At Adobe Max, and at our financial analyst meeting in October, we highlighted key features for the next release of our Creative Suite product family. We expect CS5 will be a must-have upgrade when it ships this fiscal year.

In business productivity solutions, LiveCycle revenue grew sequentially, exceeding revenue achieved in both Q2 and Q3. We believe there's a large market opportunity to transform the way customers and enterprises do business using solutions to create interactive multi-channel experiences that incite action and dramatically improve business outcomes.

Our strategy is to deliver comprehensive solutions based on LiveCycle and Connect, leveraging the reach of the Adobe Flash platform.

Connect Pro had a record bookings quarter and government revenue doubled on a year over year basis. In Q4, we announced significant updates for Connect Pro. New features enable organizations to provide rich communication and collaboration experiences for their employees, partners, and customers.

Our integration of Omniture is going well, and customers are excited about our vision to deliver a more complete customer workflow, spanning content creation, delivery, and optimization. We are leveraging the strength of Adobe's brand and global infrastructure to expand opportunities for Omniture solutions and the integration of Omniture technology into CS5 is on the way.

We added 70 new Omniture customers in October and November. We quickly rolled out a unified go-to-market strategy, enabling each of the product sales organizations to widen and deepen their executive level relationships. We have completed training of the various solutions across the sales organization. We are now focused on a strong close to the selling season for Omniture and on pursuing strategic customer opportunities in streaming media, mobile, and e-commerce, all of which represent large growth opportunities.

At the Adobe Max conference in October, we unveiled Flash player 10.1 and Air 2.0, enabling rich web content, video and applications to reach more users across a broader set of devices. We announced new HDTV streaming technology for video delivered on the Flash platform, released betas of Adobe Flash Builder and Flash Catalyst software, and introduced new Adobe Flash platform services.

In the recent Gardner report discussing mobile consumer application platforms, Adobe was positioned in the visionary's magic quadrant. The report highlights Adobe's long-term commitment to mobile support and vision for experiences across multiple devices, as well as our strong reputation for content creation and high awareness with developers.

We are excited about our prospects for 2010. As we highlighted at our recent financial analyst meeting, our areas of focus in the coming year continue to be delivering a must-have release of Creative Suite, driving double-digit growth in the enterprise with our LiveCycle, Connect, and Acrobat businesses, integrating and delivering incremental value with or Omniture business to help customers optimize their businesses on the web, and advancing the flash platform, which provides a basis for these and other Adobe businesses to thrive and grow, and gives Adobe distinct competitive advantages in a cross-platform, cross-device multiple screen, always connected world.

Assuming the economy remains stable, we believe our investment throughout the past year in these areas, combined with our outstanding global team of employees and the innovative new products we will ship this year, has positioned Adobe to return to strong top line growth in 2010.

Thank you for joining us today. Now, I will turn the call back over to Mike.

Mike Saviage

Thanks, Shantanu. Before we being Q&A, I need to point out we are changing our reporting segments slightly in fiscal 2010. Given our enterprise focus on customer interaction solutions, we will report Connect Pro revenue in our enterprise segment starting in Q1. This means in fiscal 2010 our knowledge worker segment will contain all Acrobat revenue, whereas our enterprise segment will contain LiveCycle and Connect Pro revenue. The investor data sheet we are providing today contains a table showing the new segment classifications. The investor data sheet we provide as part of our Q1 earnings report in March will contain these revenue reporting changes with restated historical business segment revenue for comparison purposes.

In regard to today's earnings report, we have posted several documents on our investor relations webpage today, including a copy of the script containing our prepared remarks for today's call. To access these documents and other investor related information, you can go to our website at www.adobe.com/adbe. For those who wish to listen to a playback of today's conference call, a web-based Acrobat Connect Pro archive of the call will be available from the IR page on Adobe.com later today. Alternatively, you can listen to a phone replay by calling 888-203-1112. Use conference ID number 3044898. Again, the phone number is 888-203-1112, with ID number 3044898. International callers should dial 719-457-0820. The phone play back service will be available beginning at 4:00 p.m. Pacific Time today and ending at 4:00 p.m. Pacific Time on Friday, December 18, 2009.

We would now be happy to take your questions. Operator.

Question-and-Answer Session

Operator

(Operator Instructions) We will go first to Mike Olson with Piper Jaffray.

Michael Olson - Piper Jaffray

Good afternoon. A couple of quick questions, one for Shantanu and then one for Mark -- Creative was actually ahead of what we were expecting while business productivity was a little below. If anything, I would have expected it would be the opposite, as kind of Creative maybe starts to slow down into CS5. What are the factors that may still be weighing on business productivity and is CS4 holding up better than expected as we get closer to CS5?

And then for Mark, what kind of near-term and long-term gross margins are you expecting for the overall business with Omniture built in? Is it something like a high 80s number? And then can you repeat the shippable backlog number? Thanks.

Shantanu Narayen

-- in really all of our products, and in both North America and EMEA, so that extends to both the Creative as well as the Acrobat products, and let me say that with respect to Creative, we've always maintained that we do see a correlation with GDP. CS4 was a great product, is a great product and shipped in I think what we now recognize as a bad economic environment. And as Creative professionals realize that they have old hardware and software, I think we are continuing to see them upgrade and that's benefiting Adobe.

I will also say that we've really focused a lot with the Creative business on better segmentation, crisper marketing messages, and driving adoption and penetration, and I think we are seeing some of the benefits of the focused marketing efforts that we have put to try and get new people to adopt creative and for existing customers to upgrade.

On the Acrobat side, again while Acrobat 9 has been impacted by the economic environment, we are definitely seeing PDF as a platform continue to gain momentum. There are more PDFs that are being created and one of the things we also see is frankly the PDF creation business is also becoming more server based and as we are offering LiveCycle, there's a fair amount of the LiveCycle revenue that can be attributed to PDF generation because it's happening on the server. We had a strong end of year enterprise licensing part of the Acrobat business and so we will continue to focus on driving growth in both businesses.

Mark Garrett

And then on the gross margin question, the addition of Omniture into our business for 2010 will pull our gross margins down approximately 2 to 3 percentage points, so it will be closer to that 90% range, if you look at it going forward. And we do expect to be able to improve that over time as we drive better purchasing and better data center consolidation but that will take a little bit of time, so assume for now roughly 90% and on the backlog question, it was 9% of total revenue or 9% of the $757 million.

Michael Olson - Piper Jaffray

Thank you.

Operator

Your next question comes from the line of Steven Ashley with Robert W. Baird.

Steven Ashley - Robert W. Baird

In terms of the first quarter margin guidance, when we look at the 9% reduction in force you are doing, just trying to understand how much of that benefit will be realized in the first quarter, you know, maybe as a percentage basis and how we might think about that being phased in over the fiscal year.

Mark Garrett

Let me talk about operating expenses a little bit -- one way for you guys to think about it is if you took the midpoint of our revenue range of $825 million and you assume the 90% gross margin that I just talked about, and the middle of our range for operating margin of 31%, that would suggest that OpEx goes up approximately $58 million from Q4 to Q1. The biggest piece of that, of course, is we have a full quarter of Omniture in Q1 that we only had a month of in the fourth quarter. We also have an extra week of cost that goes along with the extra week of revenue that we talked about on my prepared notes. And then we have the variable costs that we've been talking to you about for a few quarters now that we layer back into the business, assuming of course we pay out bonuses and variable compensation going forward. And then some of that gets offset by some of the restructuring that we took, Steve, but the bulk of the restructuring really occurs later in the year as people that are on transition roll off from the company.

Steven Ashley - Robert W. Baird

Great, and then just Shantanu, a very high level question -- when you look at CS5, outside of the improved feature functionality that will be in that product, what factors give you confidence that we may be back to a normal product cycle with that? Thanks.

Shantanu Narayen

Well, Steve, at the analyst meeting, we talked about a number of factors that we think will lead to CS5 being a must-have upgrade. We are clearly seeing an ageing of hardware. When I talk to my peers across the industry, they have certainly held off on hardware transitions and I think you will find in many cases that the Windows operating system that is still being run is 7 or 8 years old, if that's Windows Professional. So the move towards Windows 7, some of the new hardware changes, we have clearly demonstrated how for both imaging and video we are taking advantage of all the GPU acceleration that is now available. The desire from our customers to have multi-screen capability as they increasingly target multiple devices for their content. Snow Leopard on the Mac also should help because it's a new OS. And frankly, thinking about Omniture and demonstrating to our customers how we can help them drive business value from the investment that we are making in Creative. And the fact that the economy should see improvement -- I think all of those lead us to have more confidence looking forward to 2010 and CS5.

Steven Ashley - Robert W. Baird

Great. Thank you.

Operator

Your next question comes from the line of Heather Bellini with ISI Group.

Heather Bellini – ISI Group

Thank you. Two questions for you -- Shantanu, I was wondering if you could talk to us a little bit about the 64-bit enablement and how you think that could drive upgrades. I know you were just talking about the ageing hardware base a second ago but in particular, I'm wondering how much of a driver that is in and of itself.

And secondly, I'm wondering if you have a view on how you would place CS5 in terms of your prior CS releases, and obviously it's not out yet but should we think that CS5 could be a cycle that tops that of CS3 from a revenue perspective based on again the comments you were making before about from a hardware perspective? Thank you.

Shantanu Narayen

On the 64-bit enablement, I mean, it is certainly one of the multiple features that we will be introducing and I think where it has the most dramatic impact will be in video and in some of the imaging functions that we provide, both on the Mac and on Windows we are going to start to support 64-bit. When you are thinking about rendering video in particular, the more we can take advantage of hardware advances, the more you really see the benefits that that provides, as well as GPU acceleration, frankly. I mean, when we think about a movie like Avatar that is being release, a significant amount of the time that is taken goes in rendering. So whatever we can do to accelerate the rendering really improves both the creativity and productivity. So I would say it's one important feature but frankly there are thousands of features that are going into CS5 that should help make it be a very compelling release.

While we are very excited and I want to highlight the excitement that we have with respect to CS5, I think comparisons are still a little bit early. We are focused on CS4 and continue to drive adoption and penetration for CS4, and as you know, a large part will also rely on what happens with the economic environment in 2010. Again, the peers that I talked to, people feel like the entire supply chain has been building up for a strong end of year and I think when we get into early 2010, people are going to look back and see if there is going to be continued demand to really determine if the recession is finally over.

But we are excited. We are doing everything that we can within our power to deliver a really compelling value. There have clearly been people who haven’t switched as a result of the economic environment, and how strong it is I think GDP will be one important factor in determining that.

Heather Bellini – ISI Group

Okay, great. Thank you.

Operator

Your next question comes from the line of Brent Thill with UBS.

Brent Thill - UBS

A follow-up on Heather's questions on CS4 -- I know you are not giving us a release date but Shantanu, what leaves you comfortable that you are on time with your internal plan? I don’t know if code complete or the release date being fixed is something that you have discussed but any color would be helpful, just to give us a sense of kind of where you are at, not without giving us a day.

Shantanu Narayen

Well, I think we've demonstrated over the last decade that we have had very, very good reliability and predictability in delivering what are really massive products, as large as really any operating system releases that go out, when you think about the number of applications and technologies. I will say I do a review of the engineering schedule very frequently. I had one this Monday and the teams are making great progress. So we've been focused on it.

What I am particularly excited about also is some of the work that we've been able to do with respect to integrating Omniture into CS5 and if you go back to when we put Adobe and Macromedia together, what we are finding is as you get these two teams together, the number of ideas that we have in terms of providing even more value to people who either used Omniture but didn’t use Creative Suite or use Creative Suite but didn’t use Omniture is quite significant. I'll give you two examples of that -- what we are able to do is in terms of tracking Flash video that might exist on the web, we now have the ability through that open source media framework that we have built to, with a single line of code, turn on analytics for Flash video if you want to use Omniture in conjunction with that.

Another example is with the Creative products, if you are trying to do test and target or allow people to measure how their Flash media applications are being consumed, you can do that through point and click and no code to write.

So there's still a fair amount of work that has to go in the glide path to get this out to our customers. We have the early betas in the hands of our customers, feedback has been positive but this is -- it's not in the bag but based on what we have seen and past history, I am confident that this will be a great release.

Brent Thill - UBS

Thanks.

Operator

Your next question comes from the line of Ross MacMillan with Jeffries & Company.

Ross MacMillan - Jeffries & Company

Just going back, Mark, to the massive jump in unshipped product at the end of the quarter, can you just talk to the linearity and I don’t think we've seen that sort of number since Q407 as a dollar number. Is there any way you could help us understand that linearity and then maybe the mix between CS and other products that constitute that? Thanks.

Mark Garrett

Sure, Ross. There is no doubt that we saw a demand up-tick more towards the end of the quarter. If you go way back to the beginning of this year, we said that the U.S. was stable back in February. That started to improve over the course of the year. We definitely saw an up-tick in demand from there in Europe and in North America, particularly at the end of the quarter that was the large driver of that substantial backlog.

Ross MacMillan - Jeffries & Company

Great, and then maybe just --

Mark Garrett

In terms of mix, we don’t dive into the details of what is in that backlog number by the [EU], Ross, so I can't help you there.

Ross MacMillan - Jeffries & Company

Okay, and then maybe just a follow-up, just to be clear, Mark, when you talked about your 34% non-GAAP op margin floor, you are talking about it in the context of the way you are reporting, which is excluding the deferred revenue write-down, correct?

Mark Garrett

Yes, that's correct, so that's without -- everything that we are going to talk about will consistently be without that $30 million and we will constantly remind you of the impact each quarter of what that $30 million was. By the way, on the backlog, it's pretty evenly distributed around all the products.

Ross MacMillan - Jeffries & Company

Great. And then just, I wonder if you might -- we could probably work it out but any -- is there any way to think about the EPS impact from the $31 million of deferred this year? Is that a number you have at hand?

Mark Garrett

Well, I mean, you could definitely do the math but it works out that roughly $7 million is a penny -- $7 million of revenue as a rule of thumb works out to be a penny if you just take that through the margin, tax rate, and share count calculation.

Ross MacMillan - Jeffries & Company

Perfect. Thanks so much.

Operator

Your next question comes from the line of Sarah Friar with Goldman Sachs.

Sarah Friar - Goldman Sachs

Just to finish up that question that Ross was asking, so Mark, to be ultra clear, as we go, as we annualize through the acquisition, in effect you almost see margin expansion as you hit kind of the full revenue potential of Omniture without the deferred revenue write-down, correct?

Mark Garrett

Yes, that's right -- in fact, this margin number in Q1 will be the low point and it's a good opportunity, Sarah, for me to add on the OpEx line, it's very conceivable that we could keep OpEx at this Q1 level through the rest of the year because we will be continuing to invest but we also get the offset of some of the restructuring that helps us later in the year, so depending on what we see from a revenue perspective, it's conceivable that we could keep OpEx at this level for the rest of the year, roughly, and then drive towards a minimum of 34%, again without the benefit of that $30 million of deferred revenue write-down.

Sarah Friar - Goldman Sachs

Sure. And then maybe as a follow-up to that in terms of thinking about costs, because we've not really talked to you live since we got the news on the incremental headcount reduction in force, I mean, is the view that there's still more low-hanging fruit in terms of optimizing the core Adobe operating line still or are you now kind of refocusing back to growth in a way and you are done with a lot of the pulling out of the incremental costs that can come up when you go through a bad time like we've just been through?

Shantanu Narayen

Maybe I'll take that, Sarah -- when we think about 2009, it was clearly a tough year and in terms of the restructuring, we did a restructuring both at the end of last year as well as the end of this fiscal year 2009. As a company, based on what we are seeing in the marketplace, based on the product roadmap that we see ahead of us, based on the opportunities to continue to drive top line growth, we think we are done with the focus on the costs. It's going to be a lot more focus on driving top line growth and meeting customer needs, because we have some significant opportunities as we talked about at the analyst meeting, whether it's with the Omniture marketing suite, customer interaction solutions and driving LiveCycle and connect and clearly the Acrobat and the Creative products. So that's really going to be the focus of the management team for 2010.

Sarah Friar - Goldman Sachs

Great. And if I could ask just one more follow-on, Shantanu, on the revenue side -- so clearly we see that very nice sequential up-tick in Europe. Just qualitatively, where are you finding Europe relative to the Americas? Is it still somewhat lagging or are you really starting to see a turn come in EMEA as well?

Shantanu Narayen

Well, as you know, entering in Q4, we were a little concerned about and cautious about what would happen because we go through the typical holiday season in Q3 in Europe. We did see an up-tick, as Mark said. It was really pretty late in the end of the quarter, Q4 and I would say it's still lagging the U.S. a little bit but we definitely saw an up-tick in improvement.

Sarah Friar - Goldman Sachs

Perfect. Thank you very much.

Operator

Your next question comes from the line of Adam Holt with Morgan Stanley.

Adam Holt - Morgan Stanley

My first question, Mark, is maybe a housekeeping question -- is sizing the extra week for the quarter as easy as just dividing the guidance by the 13 weeks?

Mark Garrett

No, it's not, Adam, because it's really the volume business, so you really have to look at what goes through the channel from a shrink-wrap and a licensing perspective, so it's less -- substantially less than just dividing by the number of weeks in the quarter.

Adam Holt - Morgan Stanley

Okay. I guess what I am getting at is you obviously -- the quarter, you've got more visibility heading into a Q1 than normal with that backlog number. I was trying to understand how we should be thinking about the guidance relative to normal seasonality if we ex out that extra week and in particular, are you baking in some assumption for maybe a little bit of softness on the CS side as we get closer to the CS5 release?

Mark Garrett

So the extra week, you can think roughly as $20 million, just to size it for you, so you don’t have to try to guess. And the way we came up with the guidance for Q1 is as you pointed out, there is Q1 seasonality that we want to be careful of and we want to be prudent about the guidance from a seasonality perspective, as well as still an economic perspective. To the extent that we see this Q4 strength that we saw at the end of the quarter continue into Q1, that is exactly what would put us toward the high-end of the range as opposed to the middle or low-end of the range.

Adam Holt - Morgan Stanley

And just one more question -- what was the impact of currency in the quarter and how are you thinking about currency on a going forward basis?

Mark Garrett

So in the quarter, from a year-over-year perspective, we had a gain of $22 million. It was 16 from the Euro and 6 from the YEN. And again, whenever we give guidance, we kind of factor in what we think rates are going to do based on where they are today, so basically that rates would stay the same. We don’t try to forecast what rates are going to do.

Adam Holt - Morgan Stanley

Terrific. Great finish to the year.

Operator

Your next question comes from the line of Jay [Vleeschauer] with Ticonderoga Securities.

Jay Vleeschauer - Ticonderoga Securities

A couple of questions -- Shantanu, irrespective of the recurring revenues that you now get with Omniture, what else could or should the company do for Adobe's creative business in particular to establish for contractually recurring revenue? This is the maintenance or subscription question that has come up from time to time. LiveCycle gives you that but what can you do on the creative side? You experimented with the tier pricing earlier this year. Maybe you could talk about that effect, or anything else you might do of a more recurring nature on the creative side, and then a follow-up.

Shantanu Narayen

First, the big win for us with Omniture is the strategic opportunity to really provide the more complete solution to our creative customers and to complete the marketing loop. Without a doubt, that continues to be the area that is most exciting for us and when we talk to customers, I have been out on the road, they are really pretty excited about the vision for providing both the creative tools as well as a playback environment with Flash and now tools to help them optimize their online content. So without a doubt, that's the most exciting part for us.

But specifically, I think there are a couple of things that you will see us do, because whether it's CS5 or Scene 7 or LiveCycle or Flash platform, they all actually benefit from increased integration with the analytic products that we get from Omniture. We've talked about the subscription at the analyst meeting -- as we have said, we are running a pilot. That pilot continues to have promising results. Don’t expect us to roll out the subscriptions on a worldwide basis. I think when the next version of Creative launches, we will continue to stick with our current offering but I think you are going to continue to see us offer subscriptions as an alternate mechanism to get people who don’t want to give all the money up front into the platform.

Clearly the other thing that you are going to also continue to see is software plus services, and one of the key features that we will deliver in the next version of creative suite will be new services like we have already announced. We have announced the acquisition of a company called business catalyst. There's browser lab, which allows people to see how the websites that they are creating will render on mobile devices and alternate platforms. So you are going to see us also deliver these new services and those services will also be recognized rateably.

And finally, when we do Acrobat in the latter half of 2010, everything that we have done with Acrobat.com and the 7 million subscribers that we have there, we are going to also deliver that as a software plus service collaboration capability, so --

Jay Vleeschauer - Ticonderoga Securities

Okay, the second question is at the time of the restructuring in October, it was mentioned that Adobe has something over at that time 100 products and projects but that there's only so much even you as a company can do or support. Is there an update on the extent of the portfolio now -- again, ex Omniture and more specifically, what are the criteria for keeping or not keeping a business? When is something too small to matter for you or conversely, what small businesses do you have that have the potential to perhaps become even nine-figure businesses at some point?

Shantanu Narayen

Well, every year we have a very comprehensive strategic plan where we do a portfolio analysis much like other companies would do, and look at for each of the projects that are underway what the potential is, both from a short-term perspective as well as from a long-term perspective and we are clearly driving a balanced portfolio so we have a number of businesses which are high growth opportunities but earlier on in their life cycle, like Scene 7, like Connect that we invest in. We have seed businesses which are a gleam in somebody's eye -- it's a $0 billion business but it hopefully has great potential.

So I would say that we have done a really good job of optimizing the business across the entire portfolio that we have, and that is something that we will continue to do. So do we have new creative things underway? At Max in our sneak peeks we showed some examples of some very creative things that we believe will lead us into new businesses moving forward. But in addition to that, we do have more mature products where we are constantly looking to see how we can optimize it.

Jay Vleeschauer - Ticonderoga Securities

Thanks, Shantanu.

Operator

Your next question comes from the line of Philip Rueppel with Wells Fargo.

Philip Rueppel - Wells Fargo Securities

You talked about some new ideas for integrating Omniture with Creative Suite that have bubbled up recently. Has there been any significant change in the original schedule of CS5 due to the Omniture acquisition?

And then second of all, just looking at Omniture standalone, now that you have had it under your belt for a few months -- has there been any disruption in that business and are you comfortable as you head into the, as you said, the seasonally strong year-end that things are moving along fine with that business? Thanks.

Shantanu Narayen

So on the first question, as it relates to the CS5 product schedule, we are not going to make any changes in the CS5 product schedule as a result of Omniture -- we are going to stick to the current schedule and we are going to try and, as I said, get some quick wins in from integration perspective and I have been very pleased with what the team has been able to do, so the creativity has been fabulous.

With respect to Omniture itself, we are very pleased. We actually have got most of the employee population in Omniture excited and signed up as part of Adobe and I would divide the integration into three or four different work streams. We have talked a significant amount about the products so I won't repeat myself. On the sales side, we really focused on making sure that we had a strong end-of-year close, so we've kept the Omniture sales force separate because they had a traditional end-of-December close, so we are continuing to have them focused on driving to a strong close.

But what we have already done is we have had our annual sales kick-off with a combined organization where we have trained both organizations in the combined value proposition and we are certainly starting to see some joint account value propositions. There was a large food company, services, for example, that is a big user of LiveCycle, now wants to know which of their small and medium business customers are using that technology and are very excited about integrating Omniture as part of that.

I would also say that we have been able to open a lot of doors. Josh talked at the analyst meeting about how the brand will help Omniture sales force open doors and we are certainly starting to see that as well.

Philip Rueppel - Wells Fargo Securities

Great, thank you.

Operator

Your next question comes from the line of Robert Breza with RBC Capital Markets.

Robert Breza - RBC Capital Markets

Shantanu, I was just wondering -- I think in Mark's prepared comments, he talked about Asia just being seasonally down. Was there anything else economically that you are seeing over in Asia that would cause it not to I guess follow the normal seasonal patterns?

And then Mark, just one comment for you -- if you could help us understand maybe the direct expenses associated with Omniture for Q1, that would be great. Thank you.

Shantanu Narayen

No, Robert, we saw nothing in Asia that would lead us to believe that it is not following normal seasonal patterns. As you know, Japan is a large market for us and the traditional strong months in Japan tend to be February and March as part of their fiscal year-end, and so we expect as Mark said, I think, that to reflect in the Q1 results for Asia. And the rest of Asia, while piracy continues to be an issue in terms of what we are seeing for adoption of our solutions, that continues much like it has in the past.

Mark Garrett

And for Omniture for -- I will give you this for the first quarter, and then frankly just like every other business unit, we will probably just stick to the gross margin going forward, but Omniture in our first quarter will be something slightly less than $50 million in OpEx for Q1, and then the COGS or the gross margin you can figure out based on the fact that the total company will, like I said, come down from 92%, 93% range to roughly 90% range.

Robert Breza - RBC Capital Markets

Great. Nice quarter.

Operator

Your next question comes from the line of Brad Zelnick with Macquarrie.

Brad Zelnick - Macquarrie

Just in follow-up to comments, now that you have closed on Omniture and when we think about the ultimate opportunity to bring it into the product set and combine capabilities with the creative solutions, I guess the question would be what is the ultimate vision and how much of that vision do you expect you will be able to achieve in the CS5 timeframe, Shantanu? And then I have just a quick follow-up for Mark.

Shantanu Narayen

So the long-term vision for us continues to be for anybody who is creating online media digital assets to be able to allow them to provide a complete workflow that spans the creation, distribution, and optimization of those media assets. It's a big vision that will, much like when we acquired Macromedia, will take a few years to realize. We want to demonstrate clear commitment to that vision and early successes with the CS5 timeframe, and so you will see that in the CS5 timeframe. We want to continue to demonstrate successes with the next generation of the Flash platform and delivery of the Flash platform. And what is very interesting is even in government, as government continues to use more LiveCycle solutions, they clearly want us to provide them better analytics. So you will start to see early results with CS5 but frankly it's going to be multiple generational effort here.

The other two things that I will talk about is video -- video is clearly an explosive opportunity. Flash video being 75% of all online video. People have really been clamouring for who is watching that video, how can they optimize search spend by providing better analytics into that? Huge opportunity for us. Mobile -- mobile is a very nascent opportunity. RIM announced at their RIM developer conference that they are working both with us on the Flash side to enable Flash to work on the RIM platform. They also announced that they were working with Omniture so that as advertising becomes really a bigger form of revenue on mobile devices, they can provide each of their publishers and advertisers with information about who is actually accessing this information.

So there are some very big market opportunities that this combination allows us to go pursue.

Brad Zelnick - Macquarrie

Thanks, Shantanu and a follow-up for Mark, the announced restructuring, you had said that you expected an impact of $18 million to $20 million on the fourth quarter and I think we ended up in excess of $25 million. Could you just talk a little bit about what accounted for the variance? And maybe in terms of headcount against your 680 add target, where are we in that process? Thanks again and nice quarter.

Mark Garrett

The restructure ended up at about 630 people when we finished it all out. We do a lot of puts and takes at the end of that process and it ended up at like I said, $25 million so we are done with it. But like I said, the savings doesn’t all happen in the first quarter. There are people on transition, there are facilities that get consolidated later in the year, so the full benefit doesn’t happen until later in the year.

Brad Zelnick - Macquarrie

Thanks.

Operator

Your next question comes from the line of Sasa Zorovic with Janney.

Sasa Zorovic - Janney Montgomery Scott

I have a question regarding the usage of your cash. So one would be -- and I don’t want to kind of feel bad just after a month into an acquisition but for potential other M&A opportunities out there, there are great technologies that are available for very compelling prices at this point, and then secondly also about buy-backs -- obviously you've done some in the past year and how you look in terms of -- particularly with the economy continues to recover and you have a strong release, about maybe speeding up some of the buy-back programs.

Mark Garrett

From an M&A perspective, we continue to believe that that's strategic for us. There will be a lot of technology plug-ins that we will continue to look at like we've done in the past and we certainly have the available cash to do that. We are very fortunate that we have a great business model that generates $200 million to $300 million in free cash flow every quarter, so we have definitely got the capital to do that. As it relates to buy-backs, we clearly slowed down a little bit because of the acquisition of Omniture but we have continued to buy back shares, like I mentioned this quarter, and the $350 million [view app] that I talked about last quarter still has some room left in it, so there's still about $60 million worth of room on that program where those shares will get delivered most likely in the first quarter and we still believe that from a shareholder perspective, it's the best vehicle for us to return excess cash and when we have it, we will continue to use it for that.

Sasa Zorovic - Janney Montgomery Scott

Great, thank you.

Mike Saviage

Operator, we are running tight on time. We will take two more questions.

Operator

Your next question comes from the line of David Hilal with Friedman, Billings, Ramsey.

David M. Hilal - Friedman, Billings, Ramsey

Just two questions on Omniture -- first, Mark, on the revenue in the quarter and your guidance, could you share with us the mix or maybe the rough mix between subscription and services? And then my second question I think Shantanu mentioned the new customer additions. I was hoping you could talk a little bit about at least qualitatively about churn and renewal rates that they have seen in their business the last few months. Thanks.

Shantanu Narayen

Let me take that, David. I think as it relates to Omniture, what we wanted to do was make sure that we gave you a significant amount of information as it relates to the business model as well as some of the key metrics that we will measure moving forward. Overall I would say with respect to the Omniture business, we didn’t see anything different in the six weeks or so that they were part of Adobe and really I think at the end of Q1, when we look at a full quarter under the Adobe belt, that makes a lot more sense. As you know, a significant amount of the Omniture revenue in the quarter is already there and it's just a question of continuing to deliver. So the services stayed up really nicely, the customers continue to be pleased, so I would say there really hasn’t been any significant change in customer retention rates or in the sources of revenue.

Mark Garrett

And just to clarify that even further, they were running -- Omniture was running standalone about $10 million roughly per quarter in 2009 for professional services revenue and in our one month in Q4, they were somewhere between $3 million and $4 million in professional services, so very consistent with that run-rate.

Operator

Your next question comes from the line of Kash Rangan with Banc of America Merrill Lynch.

Kash Rangan - Banc of America Merrill Lynch

Thank you very much. Shantanu, I was wondering, when you talked about double-digit targets for LiveCycle, Acrobat, and Connect, I was just wondering, you didn’t talk about talk about a specific growth target for Creative Suite, how are you thinking about Creative Suite in fiscal 2010? I'm asking that just because you didn’t explicitly address the topic. I'm just wondering if there's any variables, external variables that still cause you to not give any particular forecast out, and I understand timing is one of those variables. I just wanted to get a little bit more color on that. Thanks.

Shantanu Narayen

First overall for the company, I think we are excited as we said about fiscal 2010 but we are definitely going to be cautious about providing annual guidance until we get through the holiday season and get a little bit more data under the belt.

What I was attempting to do with the business productivity business was reflect how we saw the overall growth opportunity for that entire business and how it's actually transitioning to be a combination of Acrobat on the desktop, as well as LiveCycle on the server and I believe that that continues to be a large growth opportunity for us.

So it was more about talking about the target market opportunity, both in terms of how rich Internet applications and document services come together, rather than a specific target for fiscal 2010 for any of our businesses, and clearly we continue to think that there is significant opportunity in the creative business as well.

Kash Rangan - Banc of America Merrill Lynch

Maybe a question for you, Mark, so as we get closer to CS5 launch, I guess you will alert us to the transition in the quarter before that release and incorporate that into the guidance, right? Because I look at Q1 guidance, it doesn’t look like a lot of seasonal slow-down at all if you exclude the Omniture piece of it, so obviously it doesn’t look like we are very, very close to the transition quarter. I just wanted to get your thoughts on how we should be thinking about how we should interpret your guidance as you get closer to CS5.

Mark Garrett

Well, I guess the simple answer is when we are ready to announce CS5 publicly, then clearly I will provide you guys guidance as it relates to CS5 but until we announce it publicly, I can't give you anymore than that.

Shantanu Narayen

I just wanted to say thank you again for joining us today. We are really pleased with Q4. As I said, we saw increased demand and I think the company did a really good job in a tough economic climate of continuing to focus on our long-term strategic opportunities while making sure that we delivered back to our shareholders. And as we look forward, frankly, when we think of the breadth of Adobe's opportunities, we just see significant opportunity across multiple customer segments. There's going to be an amazing line-up of products and with Omniture now on board and the Flash platform as a competitive advantage, we are really entering the year with the goal of continuing to deliver top line growth and increasing shareholder value. So thank you again for joining us on the call today.

Mike Saviage

And this concludes our call. Thank you again.

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