Cover Page
Cover Page - shares shares in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 24, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 03, 2023 | |
Document Transition Report | false | |
Entity File Number | 0-15175 | |
Entity Registrant Name | ADOBE INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0019522 | |
Entity Address, Address Line One | 345 Park Avenue | |
Entity Address, City or Town | San Jose | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95110-2704 | |
City Area Code | 408 | |
Local Phone Number | 536-6000 | |
Title of 12(b) Security | Common Stock, $0.0001 par value per share | |
Trading Symbol | ADBE | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 458.7 | |
Entity Central Index Key | 0000796343 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-01 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 03, 2023 | Dec. 02, 2022 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 4,072 | $ 4,236 | |
Short-term investments | 1,581 | 1,860 | |
Trade receivables, net of allowances for doubtful accounts of $17 and $23, respectively | 1,801 | 2,065 | |
Prepaid expenses and other current assets | 888 | 835 | |
Total current assets | 8,342 | 8,996 | |
Property and equipment, net | 1,967 | 1,908 | |
Operating lease right-of-use assets, net | 402 | 407 | |
Goodwill | 12,792 | 12,787 | |
Other intangibles, net | 1,354 | 1,449 | |
Deferred income taxes | 826 | 777 | |
Other assets | 984 | 841 | |
Total assets | 26,667 | 27,165 | |
Current liabilities: | |||
Trade payables | 308 | 379 | |
Accrued expenses | 1,469 | 1,790 | |
Debt | 0 | 500 | |
Deferred revenue | 5,357 | 5,297 | |
Income taxes payable | 222 | 75 | |
Operating lease liabilities | 81 | 87 | |
Total current liabilities | 7,437 | 8,128 | |
Long-term liabilities: | |||
Debt | 3,630 | 3,629 | |
Deferred revenue | 120 | 117 | |
Income taxes payable | 536 | 530 | |
Operating lease liabilities | 415 | 417 | |
Other liabilities | 323 | 293 | |
Total liabilities | 12,461 | 13,114 | |
Stockholders’ equity: | |||
Preferred stock, $0.0001 par value; 2 shares authorized; none issued | 0 | 0 | |
Common stock, $0.0001 par value; 900 shares authorized; 601 shares issued; 459 and 462 shares outstanding, respectively | 0 | 0 | |
Additional paid-in-capital | 10,284 | 9,868 | |
Retained earnings | 29,435 | 28,319 | |
Accumulated other comprehensive income (loss) | (307) | (293) | |
Treasury stock, at cost (142 and 139 shares, respectively) | (25,206) | (23,843) | |
Total stockholders’ equity | 14,206 | 14,051 | |
Total liabilities and stockholders’ equity | $ 26,667 | $ 27,165 | |
[1]The condensed consolidated balance sheet as of December 2, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Millions, $ in Millions | Mar. 03, 2023 | Dec. 02, 2022 |
Current assets: | ||
Allowances for doubtful accounts | $ 17 | $ 23 |
Stockholders’ equity: | ||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 2 | 2 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 900 | 900 |
Common stock, shares issued (in shares) | 601 | 601 |
Common stock, shares outstanding (in shares) | 459 | 462 |
Treasury stock, shares (in shares) | 142 | 139 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Revenue: | ||
Subscription | $ 4,373 | $ 3,958 |
Product | 120 | 145 |
Services and other | 162 | 159 |
Total revenue | 4,655 | 4,262 |
Cost of revenue: | ||
Subscription | 434 | 393 |
Product | 8 | 10 |
Services and other | 126 | 109 |
Total cost of revenue | 568 | 512 |
Gross profit | 4,087 | 3,750 |
Operating expenses: | ||
Research and development | 827 | 701 |
Sales and marketing | 1,301 | 1,158 |
General and administrative | 331 | 269 |
Amortization of intangibles | 42 | 42 |
Total operating expenses | 2,501 | 2,170 |
Operating income | 1,586 | 1,580 |
Non-operating income (expense): | ||
Interest expense | (32) | (28) |
Investment gains (losses), net | 1 | (9) |
Other income (expense), net | 43 | 0 |
Total non-operating income (expense), net | 12 | (37) |
Income before income taxes | 1,598 | 1,543 |
Provision for income taxes | 351 | 277 |
Net income | $ 1,247 | $ 1,266 |
Basic net income per share (in usd per share) | $ 2.72 | $ 2.68 |
Shares used to compute basic net income per share (in shares) | 459 | 472.6 |
Diluted net income per share (in usd per share) | $ 2.71 | $ 2.66 |
Shares used to compute diluted net income per share (in shares) | 459.5 | 475.4 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 1,247 | $ 1,266 |
Other comprehensive income (loss), net of taxes: | ||
Unrealized gains / losses on available-for-sale securities | 7 | (14) |
Derivatives designated as hedging instruments: | ||
Unrealized gains / losses on derivative instruments | (9) | 23 |
Reclassification adjustment for realized gains / losses on derivative instruments | (16) | (15) |
Net increase (decrease) from derivatives designated as hedging instruments | (25) | 8 |
Foreign currency translation adjustments | 4 | (34) |
Other comprehensive income (loss), net of taxes | (14) | (40) |
Total comprehensive income, net of taxes | $ 1,233 | $ 1,226 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | |
Beginning balances at Dec. 03, 2021 | $ 14,797 | $ 0 | $ 8,428 | $ 23,905 | $ (137) | $ (17,399) | |
Beginning balances (in shares) at Dec. 03, 2021 | 601 | ||||||
Beginning balances, Treasury Stock, Common, Shares at Dec. 03, 2021 | (126) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,266 | 1,266 | |||||
Other comprehensive income (loss), net of taxes | (40) | (40) | |||||
Re-issuance of treasury stock under stock compensation plans | (175) | 0 | (210) | $ 35 | |||
Re-issuance of treasury stock under stock compensation plans (in shares) | 1 | ||||||
Repurchases of common stock | $ (2,400) | $ (2,400) | |||||
Repurchase of common stock (in shares) | (3.8) | (4) | |||||
Stock-based compensation | $ 322 | 322 | |||||
Value of shares in deferred compensation plan | 5 | $ 5 | |||||
Ending balances at Mar. 04, 2022 | 13,775 | $ 0 | 8,750 | 24,961 | (177) | $ (19,759) | |
Ending balances (in shares) at Mar. 04, 2022 | 601 | ||||||
Ending balances, Treasury Stock, Common, Shares at Mar. 04, 2022 | (129) | ||||||
Beginning balances at Dec. 02, 2022 | $ 14,051 | [1] | $ 0 | 9,868 | 28,319 | (293) | $ (23,843) |
Beginning balances (in shares) at Dec. 02, 2022 | 601 | ||||||
Beginning balances, Treasury Stock, Common, Shares at Dec. 02, 2022 | (139) | (139) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 1,247 | 1,247 | |||||
Other comprehensive income (loss), net of taxes | (14) | (14) | |||||
Re-issuance of treasury stock under stock compensation plans | (95) | 0 | (131) | $ 36 | |||
Re-issuance of treasury stock under stock compensation plans (in shares) | 2 | ||||||
Repurchases of common stock | $ (1,400) | $ (1,400) | |||||
Repurchase of common stock (in shares) | (5) | (5) | |||||
Stock-based compensation | $ 416 | 416 | |||||
Value of shares in deferred compensation plan | 1 | $ 1 | |||||
Ending balances at Mar. 03, 2023 | $ 14,206 | $ 0 | $ 10,284 | $ 29,435 | $ (307) | $ (25,206) | |
Ending balances (in shares) at Mar. 03, 2023 | 601 | ||||||
Ending balances, Treasury Stock, Common, Shares at Mar. 03, 2023 | (142) | (142) | |||||
[1]The condensed consolidated balance sheet as of December 2, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 1,247 | $ 1,266 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and accretion | 212 | 213 |
Stock-based compensation | 416 | 322 |
Reduction of operating lease right-of-use assets | 21 | 22 |
Deferred income taxes | (49) | 129 |
Unrealized losses (gains) on investments, net | 3 | 17 |
Other non-cash items | (5) | 2 |
Changes in operating assets and liabilities, net of acquired assets and assumed liabilities: | ||
Trade receivables, net | 269 | 191 |
Prepaid expenses and other assets | (258) | (187) |
Trade payables | (55) | 6 |
Accrued expenses and other liabilities | (323) | (389) |
Income taxes payable | 152 | 36 |
Deferred revenue | 63 | 141 |
Net cash provided by operating activities | 1,693 | 1,769 |
Cash flows from investing activities: | ||
Purchases of short-term investments | 0 | (288) |
Maturities of short-term investments | 254 | 208 |
Proceeds from sales of short-term investments | 33 | 54 |
Acquisitions, net of cash acquired | 0 | (106) |
Purchases of property and equipment | (101) | (100) |
Purchases of long-term investments, intangibles and other assets | (30) | (28) |
Net cash provided by (used for) investing activities | 156 | (260) |
Cash flows from financing activities: | ||
Repurchases of common stock | (1,400) | (2,400) |
Proceeds from re-issuance of treasury stock | 69 | 91 |
Taxes paid related to net share settlement of equity awards | (164) | (266) |
Repayment of debt | 500 | 0 |
Other financing activities, net | (19) | (29) |
Net cash used for financing activities | (2,014) | (2,604) |
Effect of foreign currency exchange rates on cash and cash equivalents | 1 | (10) |
Net change in cash and cash equivalents | (164) | (1,105) |
Cash and cash equivalents at beginning of period | 4,236 | 3,844 |
Cash and cash equivalents at end of period | 4,072 | 2,739 |
Supplemental disclosures: | ||
Cash paid for income taxes, net of refunds | 214 | 59 |
Cash paid for interest | $ 55 | $ 50 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 03, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 2, 2022 on file with the SEC (our “Annual Report”). Use of Estimates In preparing the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, we must make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ materially from these estimates. Significant Accounting Policies There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report. Adopted Accounting Guidance and Accounting Pronouncements Not Yet Effective There have been no recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended March 3, 2023 that are of significance or potential significance to us. |
Revenue
Revenue | 3 Months Ended |
Mar. 03, 2023 | |
Revenue [Abstract] | |
REVENUE | REVENUE Segment Information Our segment results for the three months ended March 3, 2023 and March 4, 2022 were as follows: (dollars in millions) Digital Digital Publishing and Total Three months ended March 3, 2023 Revenue $ 3,395 $ 1,176 $ 84 $ 4,655 Cost of revenue 142 404 22 568 Gross profit $ 3,253 $ 772 $ 62 $ 4,087 Gross profit as a percentage of revenue 96 % 66 % 74 % 88 % Three months ended March 4, 2022 Revenue $ 3,110 $ 1,057 $ 95 $ 4,262 Cost of revenue 134 352 26 512 Gross profit $ 2,976 $ 705 $ 69 $ 3,750 Gross profit as a percentage of revenue 96 % 67 % 73 % 88 % Revenue by geographic area for the three months ended March 3, 2023 and March 4, 2022 were as follows: (in millions) 2023 2022 Americas $ 2,779 $ 2,446 EMEA 1,173 1,136 APAC 703 680 Total $ 4,655 $ 4,262 Revenue by major offerings in our Digital Media reportable segment for the three months ended March 3, 2023 and March 4, 2022 were as follows: (in millions) 2023 2022 Creative Cloud $ 2,761 $ 2,548 Document Cloud 634 562 Total Digital Media revenue $ 3,395 $ 3,110 Subscription revenue by segment for the three months ended March 3, 2023 and March 4, 2022 were as follows: (in millions) 2023 2022 Digital Media $ 3,301 $ 2,995 Digital Experience 1,042 932 Publishing and Advertising 30 31 Total subscription revenue $ 4,373 $ 3,958 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 March 3, 2023, the balance of trade receivables, net of allowances for doubtful accounts, was $1.80 billion, inclusive of unbilled receivables of $101 million. As of December 2, 2022, the balance of trade receivables, net of allowances for doubtful accounts, was $2.07 billion, inclusive of unbilled receivables of $93 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 $17 million and $23 million as of March 3, 2023 and December 2, 2022, 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 three months ended March 3, 2023. Contract assets were $82 million and $97 million as of March 3, 2023 and December 2, 2022, 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 March 3, 2023, the balance of deferred revenue was $5.48 billion, which includes $79 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 5% of the total deferred revenue. As of December 2, 2022, the balance of deferred revenue was $5.41 billion. During the three months ended March 3, 2023, approximately $2.31 billion of revenue was recognized that was included in the balance of deferred revenue as of December 2, 2022. 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 March 3, 2023, remaining performance obligations were approximately $15.21 billion. Non-cancellable and non-refundable funds related to some of our enterprise customer agreements referred to in the paragraph above comprised approximately 5% of the total remaining performance obligations. Approximately 73% 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 $656 million and $629 million as of March 3, 2023 and December 2, 2022, 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 on the condensed consolidated balance sheets. Refund liabilities were $103 million and $106 million as of March 3, 2023 and December 2, 2022, respectively. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 03, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS Figma On September 15, 2022, we entered into a definitive agreement under which we intend to acquire Figma, Inc. (“Figma”) for approximately $20 billion, comprised of approximately half cash and half stock, subject to customary purchase price adjustments. Approximately 6 million additional restricted stock units will be granted to Figma’s Chief Executive Officer and employees that will vest over four years subsequent to closing. The transaction is subject to regulatory approvals and customary closing conditions, and is expected to close in 2023. We will be required to pay Figma a reverse termination fee of $1 billion if the transaction fails to receive regulatory clearance, assuming all other closing conditions have been satisfied or waived, or if it fails to close within 18 months from September 15, 2022. Figma is a privately held company that provides a web-first collaborative product design platform. Following the closing, we intend to integrate Figma into our Digital Media reportable segment for financial reporting purposes. |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-Term Investments | 3 Months Ended |
Mar. 03, 2023 | |
Cash, Cash Equivalents, and Short-Term Investments [Abstract] | |
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS | CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTSCash equivalents consist of highly liquid marketable securities with remaining maturities of three months or less at the date of purchase. We classify our investments in marketable debt securities as “available-for-sale.” We carry these investments at fair value, based on quoted market prices or other readily available market information. Unrealized gains and unrealized non-credit-related losses of marketable debt securities are included in accumulated other comprehensive income, net of taxes, in our condensed consolidated balance sheets. Unrealized credit-related losses are recorded to other income (expense), net in our condensed consolidated statements of income with a corresponding allowance for credit-related losses in our condensed consolidated balance sheets. Gains and losses are determined using the specific identification method and recognized when realized in our condensed consolidated statements of income. Cash, cash equivalents and short-term investments consisted of the following as of March 3, 2023: (in millions) Amortized Unrealized Unrealized Estimated Current assets: Cash $ 607 $ — $ — $ 607 Cash equivalents: Money market funds 3,440 — — 3,440 Time deposits 25 — — 25 Total cash equivalents 3,465 — — 3,465 Total cash and cash equivalents 4,072 — — 4,072 Short-term fixed income securities: Asset-backed securities 65 — (1) 64 Corporate debt securities 1,073 — (17) 1,056 Municipal securities 19 — — 19 U.S. agency securities 36 — (1) 35 U.S. Treasury securities 422 — (15) 407 Total short-term investments 1,615 — (34) 1,581 Total cash, cash equivalents and short-term investments $ 5,687 $ — $ (34) $ 5,653 Cash, cash equivalents and short-term investments consisted of the following as of December 2, 2022: (in millions) Amortized Unrealized Unrealized Estimated Current assets: Cash $ 657 $ — $ — $ 657 Cash equivalents: Corporate debt securities 39 — — 39 Money market funds 3,479 — — 3,479 Time deposits 61 — — 61 Total cash equivalents 3,579 — — 3,579 Total cash and cash equivalents 4,236 — — 4,236 Short-term fixed income securities: Asset-backed securities 98 — (1) 97 Corporate debt securities 1,290 — (24) 1,266 Foreign government securities 5 — — 5 Municipal securities 24 — — 24 U.S. agency securities 34 — — 34 U.S. Treasury securities 450 — (16) 434 Total short-term investments 1,901 — (41) 1,860 Total cash, cash equivalents and short-term investments $ 6,137 $ — $ (41) $ 6,096 See Note 5 for further information regarding the fair value of our financial instruments. The following table summarizes the estimated fair value of short-term fixed income debt securities classified as short-term investments based on stated effective maturities as of March 3, 2023: (in millions) Estimated Due within one year $ 906 Due between one and two years 528 Due between two and three years 145 Due after three years 2 Total $ 1,581 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 03, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis The fair value of our financial assets and liabilities at March 3, 2023 was determined using the following inputs: (in millions) Fair Value Measurements at Reporting Date Using Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Money market funds $ 3,440 $ 3,440 $ — $ — Time deposits 25 25 — — Short-term investments: Asset-backed securities 64 — 64 — Corporate debt securities 1,056 — 1,056 — Municipal securities 19 — 19 — U.S. agency securities 35 — 35 — U.S. Treasury securities 407 — 407 — Prepaid expenses and other current assets: Foreign currency derivatives 46 — 46 — Other assets: Deferred compensation plan assets 186 186 — — Total assets $ 5,278 $ 3,651 $ 1,627 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 7 $ — $ 7 $ — The fair value of our financial assets and liabilities at December 2, 2022 was determined using the following inputs: (in millions) Fair Value Measurements at Reporting Date Using Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Corporate debt securities $ 39 $ — $ 39 $ — Money market funds 3,479 3,479 — — Time deposits 61 61 — — Short-term investments: Asset-backed securities 97 — 97 — Corporate debt securities 1,266 — 1,266 — Foreign government securities 5 — 5 — Municipal securities 24 — 24 — U.S. agency securities 34 — 34 — U.S. Treasury securities 434 — 434 — Prepaid expenses and other current assets: Foreign currency derivatives 51 — 51 — Other assets: Deferred compensation plan assets 160 160 — — Total assets $ 5,650 $ 3,700 $ 1,950 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 15 $ — $ 15 $ — See Note 4 for further information regarding the fair value of our financial instruments. Our fixed income available-for-sale debt securities consist of high quality, investment grade securities from diverse issuers with a weighted average credit rating of AA-. We value these securities based on pricing from independent pricing vendors who use matrix pricing valuation techniques including market approach methodologies that model information generated by market transactions involving identical or comparable assets, as well as discounted cash flow methodologies. Inputs include quoted prices in active markets for identical assets or inputs other than quoted prices that are observable either directly or indirectly in determining fair value, including benchmark yields, issuer spreads off benchmark yields, interest rates and U.S. Treasury or swap curves. We therefore classify all of our fixed income available-for-sale securities as Level 2. We perform routine procedures such as comparing prices obtained from multiple independent sources to ensure that appropriate fair values are recorded. The fair values of our money market funds, time deposits and deferred compensation plan assets, which consist of money market and other mutual funds, are based on quoted prices in active markets at the measurement date. Our over-the-counter foreign currency derivatives are valued using pricing models and discounted cash flow methodologies based on observable foreign exchange and interest rate data at the measurement date. Our other current financial assets and current financial liabilities have fair values that approximate their carrying values. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis The fair value of our senior notes was $3.33 billion as of March 3, 2023, based on observable market prices in less active markets and categorized as Level 2. See Note 14 for further details regarding our debt. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 03, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS We may use derivatives to partially offset our business exposure to foreign currency and interest rate risk on expected future cash flows and certain existing assets and liabilities. We do not use any of our derivative instruments for trading purposes. We enter into master netting arrangements to mitigate credit risk in derivative transactions by permitting net settlement of transactions with the same counterparty. We do not offset fair value amounts recognized for derivative instruments under master netting arrangements. We also enter into collateral security agreements with certain of our counterparties to exchange cash collateral when the net fair value of certain derivative instruments fluctuates from contractually established thresholds. Cash Flow Hedges In countries outside the United States, we transact business in U.S. Dollars and in various other currencies. We may use foreign exchange option contracts and forward contracts to hedge a portion of our forecasted foreign currency denominated revenue and expenses. These foreign exchange contracts, carried at fair value, have maturities of up to 12 months. In June 2019, we entered into Treasury lock agreements with large financial institutions which fixed benchmark U.S. Treasury rates for an aggregate notional amount of $1 billion of our future debt issuance. These derivative instruments hedged the impact of changes in the benchmark interest rate to future interest payments and were settled upon debt issuance in the first quarter of fiscal 2020. We incurred a loss related to the settlement of the instruments which is amortized to interest expense over the term of our debt due February 1, 2030. See Note 14 for further details regarding our debt. As of March 3, 2023, we had net derivative gains on our foreign exchange option contracts expected to be recognized within the next 18 months, of which $15 million of gains are expected to be recognized into revenue within the next 12 months. In addition, we had net derivative losses on our foreign exchange forward contracts, of which $1 million of losses are expected to be recognized into operating expenses within the next 12 months, and net derivative losses on our Treasury lock agreements, of which $5 million is expected to be recognized into interest expense within the next 12 months. Non-Designated Hedges Our derivatives not designated as hedging instruments consist of foreign currency forward contracts that we primarily use to hedge monetary assets and liabilities denominated in non-functional currencies. Fair value asset derivatives are included in prepaid expenses and other current assets and fair value liability derivatives are included in accrued expenses on our condensed consolidated balance sheets. The fair value of derivative instruments as of March 3, 2023 and December 2, 2022 were as follows: (in millions) 2023 2022 Fair Value Fair Value Fair Value Fair Value Derivatives designated as hedging instruments: Foreign exchange option contracts $ 41 $ — $ 36 $ — Foreign exchange forward contracts — 1 — 7 Derivatives not designated as hedging instruments: Foreign exchange forward contracts 5 6 15 8 Total derivatives $ 46 $ 7 $ 51 $ 15 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 3 Months Ended |
Mar. 03, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES Goodwill as of March 3, 2023 and December 2, 2022 was $12.79 billion for both periods presented. Other intangible assets subject to amortization as of March 3, 2023 and December 2, 2022 were as follows: (in millions) 2023 2022 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Customer contracts and relationships $ 1,203 $ (526) $ 677 $ 1,204 $ (495) $ 709 Purchased technology 1,060 (583) 477 1,060 (530) 530 Trademarks 376 (183) 193 375 (172) 203 Other 20 (13) 7 61 (54) 7 Other intangibles, net $ 2,659 $ (1,305) $ 1,354 $ 2,700 $ (1,251) $ 1,449 Amortization expense related to other intangibles was $96 million and $101 million for the three months ended March 3, 2023 and March 4, 2022, respectively. Of these amounts, $54 million and $59 million were included in cost of revenue for the three months ended March 3, 2023 and March 4, 2022, respectively. As of March 3, 2023, the estimated aggregate amortization expense in future periods was as follows: (in millions) Fiscal Year Other Intangibles (1) Remainder of 2023 $ 281 2024 331 2025 295 2026 142 2027 104 Thereafter 182 Total expected amortization expense $ 1,335 _________________________________________ (1) Excludes capitalized in-process research and development which is considered indefinite lived until the completion or abandonment of the associated research and development efforts. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 03, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses as of March 3, 2023 and December 2, 2022 consisted of the following: (in millions) 2023 2022 Accrued compensation and benefits $ 525 $ 485 Accrued bonuses 158 489 Accrued corporate marketing 134 154 Taxes payable 111 117 Refund liabilities 103 106 Other 438 439 Accrued expenses $ 1,469 $ 1,790 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 03, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Restricted Stock Units Restricted stock unit activity for the three months ended March 3, 2023 was as follows: Number of Shares (in millions) Weighted Average Aggregate Fair Value (1) (in millions) Beginning outstanding balance 7.4 $ 449.94 Awarded 4.1 $ 360.54 Released (1.2) $ 445.73 Forfeited (0.1) $ 461.85 Ending outstanding balance 10.2 $ 413.87 $ 3,506 Expected to vest 9.0 $ 414.72 $ 3,081 _________________________________________ (1) The aggregate fair value is calculated using the closing stock price as of March 3, 2023 of $344.04. The total fair value of restricted stock units vested during the three months ended March 3, 2023 was $423 million. Performance Shares In the first quarter of fiscal 2023, the Executive Compensation Committee of our Board of Directors (the “ECC”) approved the 2023 Performance Share Program, the terms of which are similar to the 2022 Performance Share Program that is still outstanding. For information regarding our outstanding Performance Share Programs, including the terms, see “Note 12. Stock-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended December 2, 2022. As of March 3, 2023, the shares awarded under our 2023, 2022 and 2021 Performance Share Programs remained outstanding and were yet to be earned. For information regarding our outstanding 2022 and 2021 Performance Share Programs, including the terms, see “Note 12. Stock-Based Compensation” of our Annual Report on Form 10-K for the fiscal year ended December 2, 2022. Performance share activity for the three months ended March 3, 2023 was as follows: Number of Shares (in millions) Weighted Average Aggregate Fair Value (1) (in millions) Beginning outstanding balance 0.4 $ 495.23 Awarded 0.2 $ 437.52 Released (0.1) $ 498.74 Forfeited — $ 497.45 Ending outstanding balance 0.5 $ 466.29 $ 169 Expected to vest 0.4 $ 466.54 $ 143 _________________________________________ (1) The aggregate fair value is calculated using the closing stock price as of March 3, 2023 of $344.04. Under our Performance Share Programs, participants generally have the ability to receive up to 200% of the target number of shares originally granted. Shares released during the three months ended March 3, 2023 resulted from 63% achievement of target for the 2020 Performance Share Program, as certified by the ECC in the first quarter of fiscal 2023. The total fair value of performance shares vested during the three months ended March 3, 2023 was $39 million. Employee Stock Purchase Plan Shares Employees purchased 0.2 million shares at an average price of $286.05 and 0.2 million shares at an average price of $393.30 for the three months ended March 3, 2023 and March 4, 2022, respectively. The intrinsic value of shares purchased during the three months ended March 3, 2023 and March 4, 2022 was $12 million and $40 million, respectively. The intrinsic value is calculated as the difference between the market value on the date of purchase and the purchase price of the shares. Compensation Costs As of March 3, 2023, there was $3.85 billion of unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock-based awards and purchase rights which will be recognized over a weighted average period of 2.68 years. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. Total stock-based compensation costs included in our condensed consolidated statements of income for the three months ended March 3, 2023 and March 4, 2022 were as follows: (in millions) 2023 2022 Cost of revenue $ 29 $ 21 Research and development 209 161 Sales and marketing 122 93 General and administrative 56 47 Total $ 416 $ 322 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 03, 2023 | |
Stockholders' Equity Note [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The components of accumulated other comprehensive income (loss) and activity, net of related taxes, were as follows: (in millions) December 2, Increase / Decrease Reclassification Adjustments March 3, Net unrealized gains / losses on available-for-sale securities $ (41) $ 7 $ — (1) $ (34) Net unrealized gains / losses on derivative instruments designated as hedging instruments 17 (9) (16) (2) (8) Cumulative foreign currency translation adjustments (269) 4 — (265) Total accumulated other comprehensive income (loss), net of taxes $ (293) $ 2 $ (16) $ (307) _________________________________________ (1) Reclassification adjustments for gains / losses on available-for-sale securities are classified in other income (expense), net. (2) Reclassification adjustments for gains / losses on foreign currency hedges are classified in revenue or operating expenses, depending on the nature of the underlying transaction, and reclassification adjustments for gains / losses on Treasury lock hedges are classified in interest expense. Taxes related to each component of other comprehensive income (loss) for the three months ended March 3, 2023 and March 4, 2022 were immaterial. |
Stock Repurchase Program
Stock Repurchase Program | 3 Months Ended |
Mar. 03, 2023 | |
Stock Repurchase Program [Abstract] | |
STOCK REPURCHASE PROGRAM | STOCK REPURCHASE PROGRAM To facilitate our stock repurchase program, designed to return value to our stockholders and minimize dilution from stock issuances, we may repurchase our shares in the open market or enter into structured repurchase agreements with third parties. In December 2020, our Board of Directors granted authority to repurchase up to $15 billion in our common stock through the end of fiscal 2024. During the three months ended March 3, 2023 and March 4, 2022, we entered into accelerated share repurchase agreements (“ASRs”) with large financial institutions whereupon we provided them with prepayments of $1.4 billion and $2.4 billion, respectively. Under the terms of our ASRs, the financial institutions agree to deliver a portion of shares to us at contract inception and the remaining shares at settlement. The total number of shares delivered and average purchase price paid per share are determined upon settlement based on the Volume Weighted Average Price (“VWAP”) over the term of the ASR, less an agreed upon discount. At settlement, the financial institution may be required to deliver additional shares of our common stock to us or, under certain circumstances, we may be required to make a cash payment or deliver shares of our common stock to the financial institution, with the method of settlement at our election. We also enter into structured stock repurchase agreements in which financial institutions agree to deliver shares to us at monthly intervals during the respective contract terms, and the number of shares delivered each month are determined based on the total notional amount of the contracts, the number of trading days in the intervals and the VWAP during the intervals, less an agreed upon discount. During the three months ended March 3, 2023, we repurchased a total of 5.0 million shares, including approximately 1.8 million shares at an average price of $330.52 through a structured repurchase agreement entered into during fiscal 2022, as well as 3.2 million shares from the initial delivery of the ASR entered into during the three months ended March 3, 2023. During the three months ended March 4, 2022, we repurchased a total of 3.8 million shares, including approximately 0.6 million shares at an average price of $635.15 through a structured repurchase agreement entered into during fiscal 2021, as well as 3.2 million shares from the initial delivery of the ASR entered into during the three months ended March 4, 2022. For the three months ended March 3, 2023, the prepayments were classified as treasury stock, a component of stockholders’ equity on our condensed consolidated balance sheets, at the payment date, though only shares physically delivered to us by March 3, 2023 were excluded from the computation of net income per share. As of March 3, 2023, a portion of the $1.4 billion prepayment under our outstanding ASR was evaluated as an unsettled forward contract indexed to our own stock, classified within stockholders’ equity. Subsequent to March 3, 2023, the outstanding ASR was settled which resulted in total repurchases of 4.0 million shares at an average purchase price of $348.46. Subsequent to March 3, 2023, as part of the December 2020 stock repurchase authority, we entered into a structured stock repurchase agreement with a large financial institution whereupon we provided them with a prepayment of $1 billion. Upon completion of the $1 billion stock repurchase agreement, $4.15 billion remains under our December 2020 authority. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 03, 2023 | |
Earnings Per Share [Abstract] | |
NET INCOME PER SHARE | NET INCOME PER SHARE The following table sets forth the computation of basic and diluted net income per share for the three months ended March 3, 2023 and March 4, 2022: (in millions, except per share data) 2023 2022 Net income $ 1,247 $ 1,266 Shares used to compute basic net income per share 459.0 472.6 Dilutive potential common shares from stock plans and programs 0.5 2.8 Shares used to compute diluted net income per share 459.5 475.4 Basic net income per share $ 2.72 $ 2.68 Diluted net income per share $ 2.71 $ 2.66 Anti-dilutive potential common shares 6.2 0.9 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 03, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Indemnifications In the ordinary course of business, we provide indemnifications of varying scope to customers and channel partners against claims of intellectual property infringement made by third parties arising from the use of our products and from time to time, we are subject to claims by our customers under these indemnification provisions. Historically, costs related to these indemnification provisions have not been significant and we are unable to estimate the maximum potential impact of these indemnification provisions on our future results of operations. To the extent permitted under Delaware law, we have agreements whereby we indemnify our officers and directors for certain events or occurrences while the officer or director is or was serving at our request in such capacity. The indemnification period covers all pertinent events and occurrences during the officer’s or director’s lifetime. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have director and officer insurance coverage that reduces our exposure and enables us to recover a portion of any future amounts paid. We believe the estimated fair value of these indemnification agreements in excess of applicable insurance coverage is minimal. Legal Proceedings In connection with disputes relating to the validity or alleged infringement of third-party intellectual property rights, including patent rights, we have been, are currently and may in the future be subject to claims, negotiations or complex, protracted litigation. Intellectual property disputes and litigation may be very costly and can be disruptive to our business operations by diverting the attention and energies of management and key technical personnel. Although we have successfully defended or resolved past litigation and disputes, we may not prevail in any ongoing or future litigation and disputes. Third-party intellectual property disputes could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from licensing certain of our products or offering certain of our services, subject us to injunctions restricting our sale of products or services, cause severe disruptions to our operations or the markets in which we compete, or require us to satisfy indemnification commitments with our customers including contractual provisions under various license arrangements and service agreements. In addition to intellectual property disputes, we are subject to legal proceedings, claims, including claims relating to commercial, employment and other matters, and investigations, including government investigations. Some of these disputes, legal proceedings and investigations may include speculative claims for substantial or indeterminate amounts of damages. We consider all claims on a quarterly basis in accordance with GAAP and based on known facts assess whether potential losses are considered reasonably possible or probable and estimable. Based upon this assessment, we then evaluate disclosure requirements and whether to accrue for such claims in our financial statements. This determination is then reviewed and discussed with the Audit Committee of the Board of Directors. We make a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. Unless otherwise specifically disclosed in this note, we have determined that no provision for liability nor disclosure is required related to any claim against us because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial. All legal costs associated with litigation are expensed as incurred. Litigation is inherently unpredictable. However, we believe that we have valid defenses with respect to the legal matters pending against us. It is possible, nevertheless, that our consolidated financial position, results of operations or cash flows could be negatively affected by an unfavorable resolution of one or more of such proceedings, claims or investigations. In connection with our anti-piracy efforts, conducted both internally and through organizations such as the Business Software Alliance, from time to time we undertake litigation against alleged copyright infringers. Such lawsuits may lead to counter-claims alleging improper use of litigation or violation of other laws. We believe we have valid defenses with respect to such counter-claims; however, it is possible that our consolidated financial position, results of operations or cash flows could be negatively affected in any particular period by the resolution of one or more of these counter-claims. |
Debt
Debt | 3 Months Ended |
Mar. 03, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT The carrying value of our borrowings as of March 3, 2023 and December 2, 2022 were as follows: (dollars in millions) Issuance Date Due Date Effective Interest Rate 2023 2022 1.70% 2023 Notes February 2020 February 2023 1.92% $ — $ 500 1.90% 2025 Notes February 2020 February 2025 2.07% 500 500 3.25% 2025 Notes January 2015 February 2025 3.67% 1,000 1,000 2.15% 2027 Notes February 2020 February 2027 2.26% 850 850 2.30% 2030 Notes February 2020 February 2030 2.69% 1,300 1,300 Total debt outstanding, at par $ 3,650 $ 4,150 Current portion of debt, at par — (500) Unamortized discount and debt issuance costs (20) (21) Carrying value of long-term debt $ 3,630 $ 3,629 Carrying value of current debt, net of unamortized discount and debt issuance costs $ — $ 500 Senior Notes In January 2015, we issued $1 billion of senior notes due February 1, 2025. The related discount and issuance costs are amortized to interest expense over the term of the notes using the effective interest method. Interest is payable semi-annually, in arrears, on February 1 and August 1. In February 2020, we issued $500 million of senior notes due February 1, 2023, $500 million of senior notes due February 1, 2025, $850 million of senior notes due February 1, 2027 and $1.30 billion of senior notes due February 1, 2030. Our total proceeds of approximately $3.14 billion, net of issuance discount, were used for general corporate purposes including repayment of debt instruments due in fiscal 2020. The related discount and issuance costs are amortized to interest expense over the respective terms of the notes using the effective interest method. Interest is payable semi-annually, in arrears, on February 1 and August 1. During the first quarter of fiscal 2023, the $500 million of senior notes due February 1, 2023 became due and were repaid. Our senior notes rank equally with our other unsecured and unsubordinated indebtedness. We may redeem the notes at any time, subject to a make-whole premium. In addition, upon the occurrence of certain change of control triggering events, we may be required to repurchase the notes, at a price equal to 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. The notes do not contain financial covenants but include covenants that limit our ability to grant liens on assets and to enter into sale and leaseback transactions, subject to significant allowances. Term Loan Credit Agreement In January 2023, we entered into a delayed draw term loan credit agreement (the “Term Loan Credit Agreement”), providing for a senior unsecured term loan (the “Term Loan”) of up to $3.5 billion for the purpose of partially funding the purchase price for our acquisition of Figma and the related fees and expenses incurred in connection with the acquisition. The Term Loan is available for funding in a single drawing upon the closing of the Figma acquisition at any time prior to March 15, 2024. The Term Loan will mature two years following the initial funding date and requires no scheduled principal amortization payments prior to maturity. The Term Loan may be prepaid and terminated at our election at any time without premium or penalty. At our election, the Term Loan will bear interest at either (i) term Secured Overnight Financing Rate (“SOFR”), plus a margin, (ii) adjusted daily SOFR, plus a margin, or (iii) base rate, plus a margin. Base rate is defined as the highest of (a) the federal funds rate plus 0.50%, (b) the agent’s prime rate, or (c) term SOFR plus 1.00%. The margin for term SOFR and adjusted daily SOFR loans is based on our debt ratings, and ranges from 0.750% to 1.250%. The margin for base rate loans is based on our debt ratings, and ranges from 0.000% to 0.250%. In addition, commitment fees determined according to our debt ratings are payable quarterly in an amount ranging from 0.040% to 0.100% per annum until the funding of the Term Loan. The Term Loan Credit Agreement contains customary representations, warranties, affirmative and negative covenants, events of default and indemnification provisions in favor of the lenders similar to those contained in the Revolving Credit Agreement. As of March 3, 2023, there were no outstanding borrowings under the Term Loan. Revolving Credit Agreement In June 2022, we entered into a credit agreement (“Revolving Credit Agreement”), providing for a five-year $1.5 billion senior unsecured revolving credit facility, which replaced our previous five-year $1 billion senior unsecured revolving credit agreement entered into in October 2018 (the “Prior Revolving Credit Agreement”). The Revolving Credit Agreement provides for loans to Adobe and certain of its subsidiaries that may be designated from time to time as additional borrowers. Pursuant to the terms of the Revolving Credit Agreement, we may, subject to the agreement of lenders to provide additional commitments, obtain up to an additional $500 million in commitments, for a maximum aggregate commitment of $2 billion. At our election, loans under the Revolving Credit Agreement will bear interest at either (i) term SOFR, plus a margin, (ii) adjusted daily SOFR, plus a margin, (iii) alternative currency rate, plus a margin, or (iv) base rate, which is defined as the highest of (a) the federal funds rate plus 0.50%, (b) the agent’s prime rate, or (c) term SOFR plus 1.00%. The margin for term SOFR, adjusted daily SOFR and alternative currency rate loans is based on our debt ratings, and ranges from 0.460% to 0.900%. In addition, facility fees determined according to our debt ratings are payable on the aggregate commitments, regardless of usage, quarterly in an amount ranging from 0.040% to 0.100% per annum. We are permitted to permanently reduce the aggregate commitment under the Revolving Credit Agreement at any time. Subject to certain conditions stated in the Revolving Credit Agreement, Adobe and any of its subsidiaries designated as additional borrowers may borrow, prepay and re-borrow amounts at any time during the term of the Revolving Credit Agreement. The Revolving Credit Agreement contains customary representations, warranties, affirmative and negative covenants, including events of default and indemnification provisions in favor of the lenders. The negative covenants include restrictions regarding the incurrence of liens and indebtedness, certain merger transactions, dispositions and other matters, all subject to certain exceptions. The facility will terminate and all amounts owing thereunder will be due and payable on the maturity date unless (a) the commitments are terminated earlier upon the occurrence of certain events, including an event of default, or (b) the maturity date is further extended upon our request, subject to the agreement of the lenders. As of March 3, 2023, there were no outstanding borrowings under this Revolving Credit Agreement. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 03, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | We have prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 2, 2022 on file with the SEC (our “Annual Report”). |
Use of Estimates | Use of Estimates In preparing the condensed consolidated financial statements and related disclosures in conformity with GAAP and pursuant to the rules and regulations of the SEC, we must make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ materially from these estimates. |
Significant Accounting Policies | Significant Accounting PoliciesThere have been no material changes to our significant accounting policies as compared to the significant accounting policies described in our Annual Report. |
Adopted Accounting Guidance and Accounting Pronouncements Not Yet Effective | Adopted Accounting Guidance and Accounting Pronouncements Not Yet Effective There have been no recent accounting pronouncements, changes in accounting pronouncements or recently adopted accounting guidance during the three months ended March 3, 2023 that are of significance or potential significance to us. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 03, 2023 | |
Revenue [Abstract] | |
Disaggregation of Revenue | Segment Information Our segment results for the three months ended March 3, 2023 and March 4, 2022 were as follows: (dollars in millions) Digital Digital Publishing and Total Three months ended March 3, 2023 Revenue $ 3,395 $ 1,176 $ 84 $ 4,655 Cost of revenue 142 404 22 568 Gross profit $ 3,253 $ 772 $ 62 $ 4,087 Gross profit as a percentage of revenue 96 % 66 % 74 % 88 % Three months ended March 4, 2022 Revenue $ 3,110 $ 1,057 $ 95 $ 4,262 Cost of revenue 134 352 26 512 Gross profit $ 2,976 $ 705 $ 69 $ 3,750 Gross profit as a percentage of revenue 96 % 67 % 73 % 88 % Revenue by geographic area for the three months ended March 3, 2023 and March 4, 2022 were as follows: (in millions) 2023 2022 Americas $ 2,779 $ 2,446 EMEA 1,173 1,136 APAC 703 680 Total $ 4,655 $ 4,262 Revenue by major offerings in our Digital Media reportable segment for the three months ended March 3, 2023 and March 4, 2022 were as follows: (in millions) 2023 2022 Creative Cloud $ 2,761 $ 2,548 Document Cloud 634 562 Total Digital Media revenue $ 3,395 $ 3,110 Subscription revenue by segment for the three months ended March 3, 2023 and March 4, 2022 were as follows: (in millions) 2023 2022 Digital Media $ 3,301 $ 2,995 Digital Experience 1,042 932 Publishing and Advertising 30 31 Total subscription revenue $ 4,373 $ 3,958 |
Cash, Cash Equivalents and Sh_2
Cash, Cash Equivalents and Short-Term Investments (Tables) | 3 Months Ended |
Mar. 03, 2023 | |
Cash, Cash Equivalents, and Short-Term Investments [Abstract] | |
Cash Cash Equivalents and Short-Term Investments | Cash, cash equivalents and short-term investments consisted of the following as of March 3, 2023: (in millions) Amortized Unrealized Unrealized Estimated Current assets: Cash $ 607 $ — $ — $ 607 Cash equivalents: Money market funds 3,440 — — 3,440 Time deposits 25 — — 25 Total cash equivalents 3,465 — — 3,465 Total cash and cash equivalents 4,072 — — 4,072 Short-term fixed income securities: Asset-backed securities 65 — (1) 64 Corporate debt securities 1,073 — (17) 1,056 Municipal securities 19 — — 19 U.S. agency securities 36 — (1) 35 U.S. Treasury securities 422 — (15) 407 Total short-term investments 1,615 — (34) 1,581 Total cash, cash equivalents and short-term investments $ 5,687 $ — $ (34) $ 5,653 Cash, cash equivalents and short-term investments consisted of the following as of December 2, 2022: (in millions) Amortized Unrealized Unrealized Estimated Current assets: Cash $ 657 $ — $ — $ 657 Cash equivalents: Corporate debt securities 39 — — 39 Money market funds 3,479 — — 3,479 Time deposits 61 — — 61 Total cash equivalents 3,579 — — 3,579 Total cash and cash equivalents 4,236 — — 4,236 Short-term fixed income securities: Asset-backed securities 98 — (1) 97 Corporate debt securities 1,290 — (24) 1,266 Foreign government securities 5 — — 5 Municipal securities 24 — — 24 U.S. agency securities 34 — — 34 U.S. Treasury securities 450 — (16) 434 Total short-term investments 1,901 — (41) 1,860 Total cash, cash equivalents and short-term investments $ 6,137 $ — $ (41) $ 6,096 |
Estimated Fair Value of Short-Term Fixed Income Debt Securities | The following table summarizes the estimated fair value of short-term fixed income debt securities classified as short-term investments based on stated effective maturities as of March 3, 2023: (in millions) Estimated Due within one year $ 906 Due between one and two years 528 Due between two and three years 145 Due after three years 2 Total $ 1,581 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 03, 2023 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities at fair value on a recurring basis | The fair value of our financial assets and liabilities at March 3, 2023 was determined using the following inputs: (in millions) Fair Value Measurements at Reporting Date Using Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Money market funds $ 3,440 $ 3,440 $ — $ — Time deposits 25 25 — — Short-term investments: Asset-backed securities 64 — 64 — Corporate debt securities 1,056 — 1,056 — Municipal securities 19 — 19 — U.S. agency securities 35 — 35 — U.S. Treasury securities 407 — 407 — Prepaid expenses and other current assets: Foreign currency derivatives 46 — 46 — Other assets: Deferred compensation plan assets 186 186 — — Total assets $ 5,278 $ 3,651 $ 1,627 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 7 $ — $ 7 $ — The fair value of our financial assets and liabilities at December 2, 2022 was determined using the following inputs: (in millions) Fair Value Measurements at Reporting Date Using Quoted Prices Significant Significant Total (Level 1) (Level 2) (Level 3) Assets: Cash equivalents: Corporate debt securities $ 39 $ — $ 39 $ — Money market funds 3,479 3,479 — — Time deposits 61 61 — — Short-term investments: Asset-backed securities 97 — 97 — Corporate debt securities 1,266 — 1,266 — Foreign government securities 5 — 5 — Municipal securities 24 — 24 — U.S. agency securities 34 — 34 — U.S. Treasury securities 434 — 434 — Prepaid expenses and other current assets: Foreign currency derivatives 51 — 51 — Other assets: Deferred compensation plan assets 160 160 — — Total assets $ 5,650 $ 3,700 $ 1,950 $ — Liabilities: Accrued expenses: Foreign currency derivatives $ 15 $ — $ 15 $ — |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 03, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments | The fair value of derivative instruments as of March 3, 2023 and December 2, 2022 were as follows: (in millions) 2023 2022 Fair Value Fair Value Fair Value Fair Value Derivatives designated as hedging instruments: Foreign exchange option contracts $ 41 $ — $ 36 $ — Foreign exchange forward contracts — 1 — 7 Derivatives not designated as hedging instruments: Foreign exchange forward contracts 5 6 15 8 Total derivatives $ 46 $ 7 $ 51 $ 15 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 3 Months Ended |
Mar. 03, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other intangible assets | Other intangible assets subject to amortization as of March 3, 2023 and December 2, 2022 were as follows: (in millions) 2023 2022 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net Customer contracts and relationships $ 1,203 $ (526) $ 677 $ 1,204 $ (495) $ 709 Purchased technology 1,060 (583) 477 1,060 (530) 530 Trademarks 376 (183) 193 375 (172) 203 Other 20 (13) 7 61 (54) 7 Other intangibles, net $ 2,659 $ (1,305) $ 1,354 $ 2,700 $ (1,251) $ 1,449 |
Amortization expense in future periods | As of March 3, 2023, the estimated aggregate amortization expense in future periods was as follows: (in millions) Fiscal Year Other Intangibles (1) Remainder of 2023 $ 281 2024 331 2025 295 2026 142 2027 104 Thereafter 182 Total expected amortization expense $ 1,335 _________________________________________ (1) Excludes capitalized in-process research and development which is considered indefinite lived until the completion or abandonment of the associated research and development efforts. |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 03, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses as of March 3, 2023 and December 2, 2022 consisted of the following: (in millions) 2023 2022 Accrued compensation and benefits $ 525 $ 485 Accrued bonuses 158 489 Accrued corporate marketing 134 154 Taxes payable 111 117 Refund liabilities 103 106 Other 438 439 Accrued expenses $ 1,469 $ 1,790 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 03, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Restricted Stock Unit Activity | Restricted stock unit activity for the three months ended March 3, 2023 was as follows: Number of Shares (in millions) Weighted Average Aggregate Fair Value (1) (in millions) Beginning outstanding balance 7.4 $ 449.94 Awarded 4.1 $ 360.54 Released (1.2) $ 445.73 Forfeited (0.1) $ 461.85 Ending outstanding balance 10.2 $ 413.87 $ 3,506 Expected to vest 9.0 $ 414.72 $ 3,081 _________________________________________ |
Performance Share Activity | Performance share activity for the three months ended March 3, 2023 was as follows: Number of Shares (in millions) Weighted Average Aggregate Fair Value (1) (in millions) Beginning outstanding balance 0.4 $ 495.23 Awarded 0.2 $ 437.52 Released (0.1) $ 498.74 Forfeited — $ 497.45 Ending outstanding balance 0.5 $ 466.29 $ 169 Expected to vest 0.4 $ 466.54 $ 143 _________________________________________ |
Stock-Based Compensation, Income Statement Location | Total stock-based compensation costs included in our condensed consolidated statements of income for the three months ended March 3, 2023 and March 4, 2022 were as follows: (in millions) 2023 2022 Cost of revenue $ 29 $ 21 Research and development 209 161 Sales and marketing 122 93 General and administrative 56 47 Total $ 416 $ 322 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 03, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss) and activity, net of related taxes, were as follows: (in millions) December 2, Increase / Decrease Reclassification Adjustments March 3, Net unrealized gains / losses on available-for-sale securities $ (41) $ 7 $ — (1) $ (34) Net unrealized gains / losses on derivative instruments designated as hedging instruments 17 (9) (16) (2) (8) Cumulative foreign currency translation adjustments (269) 4 — (265) Total accumulated other comprehensive income (loss), net of taxes $ (293) $ 2 $ (16) $ (307) _________________________________________ (1) Reclassification adjustments for gains / losses on available-for-sale securities are classified in other income (expense), net. (2) Reclassification adjustments for gains / losses on foreign currency hedges are classified in revenue or operating expenses, depending on the nature of the underlying transaction, and reclassification adjustments for gains / losses on Treasury lock hedges are classified in interest expense. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 03, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | The following table sets forth the computation of basic and diluted net income per share for the three months ended March 3, 2023 and March 4, 2022: (in millions, except per share data) 2023 2022 Net income $ 1,247 $ 1,266 Shares used to compute basic net income per share 459.0 472.6 Dilutive potential common shares from stock plans and programs 0.5 2.8 Shares used to compute diluted net income per share 459.5 475.4 Basic net income per share $ 2.72 $ 2.68 Diluted net income per share $ 2.71 $ 2.66 Anti-dilutive potential common shares 6.2 0.9 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 03, 2023 | |
Debt Disclosure [Abstract] | |
Carrying value of outstanding debt | The carrying value of our borrowings as of March 3, 2023 and December 2, 2022 were as follows: (dollars in millions) Issuance Date Due Date Effective Interest Rate 2023 2022 1.70% 2023 Notes February 2020 February 2023 1.92% $ — $ 500 1.90% 2025 Notes February 2020 February 2025 2.07% 500 500 3.25% 2025 Notes January 2015 February 2025 3.67% 1,000 1,000 2.15% 2027 Notes February 2020 February 2027 2.26% 850 850 2.30% 2030 Notes February 2020 February 2030 2.69% 1,300 1,300 Total debt outstanding, at par $ 3,650 $ 4,150 Current portion of debt, at par — (500) Unamortized discount and debt issuance costs (20) (21) Carrying value of long-term debt $ 3,630 $ 3,629 Carrying value of current debt, net of unamortized discount and debt issuance costs $ — $ 500 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Segment Reporting Information | ||
Revenue | $ 4,655 | $ 4,262 |
Cost of revenue | 568 | 512 |
Gross profit | $ 4,087 | $ 3,750 |
Gross profit as a percentage of revenue | 88% | 88% |
Digital Media | ||
Segment Reporting Information | ||
Revenue | $ 3,395 | $ 3,110 |
Cost of revenue | 142 | 134 |
Gross profit | $ 3,253 | $ 2,976 |
Gross profit as a percentage of revenue | 96% | 96% |
Digital Experience | ||
Segment Reporting Information | ||
Revenue | $ 1,176 | $ 1,057 |
Cost of revenue | 404 | 352 |
Gross profit | $ 772 | $ 705 |
Gross profit as a percentage of revenue | 66% | 67% |
Publishing and Advertising | ||
Segment Reporting Information | ||
Revenue | $ 84 | $ 95 |
Cost of revenue | 22 | 26 |
Gross profit | $ 62 | $ 69 |
Gross profit as a percentage of revenue | 74% | 73% |
Revenue - Disaggregation of R_2
Revenue - Disaggregation of Revenue by Geography (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Revenue | ||
Revenue | $ 4,655 | $ 4,262 |
Americas | ||
Revenue | ||
Revenue | 2,779 | 2,446 |
EMEA | ||
Revenue | ||
Revenue | 1,173 | 1,136 |
APAC | ||
Revenue | ||
Revenue | $ 703 | $ 680 |
Revenue - Disaggregation of Dig
Revenue - Disaggregation of Digital Media Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Revenue | ||
Revenue | $ 4,655 | $ 4,262 |
Digital Media | ||
Revenue | ||
Creative Cloud | 2,761 | 2,548 |
Document Cloud | 634 | 562 |
Revenue | $ 3,395 | $ 3,110 |
Revenue - Disaggregation of Sub
Revenue - Disaggregation of Subscription Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Disaggregation of Revenue | ||
Subscription revenue | $ 4,373 | $ 3,958 |
Digital Media | ||
Disaggregation of Revenue | ||
Subscription revenue | 3,301 | 2,995 |
Digital Experience | ||
Disaggregation of Revenue | ||
Subscription revenue | 1,042 | 932 |
Publishing and Advertising | ||
Disaggregation of Revenue | ||
Subscription revenue | $ 30 | $ 31 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 03, 2023 | Dec. 02, 2022 | ||
Disaggregation of Revenue | |||
Trade receivables, net of allowances for doubtful accounts | $ 1,801 | $ 2,065 | [1] |
Unbilled receivables included in balance of trade receivables, net | 101 | 93 | |
Allowances for doubtful accounts | 17 | 23 | |
Contract assets | 82 | 97 | |
Deferred revenue | $ 5,480 | 5,410 | |
Non-Cancellable Committed Funds, Deferred Revenue, Percentage | 5% | ||
Revenue recognized that was included in the beginning balance of deferred revenue | $ 2,310 | ||
Remaining performance obligations | $ 15,210 | ||
Non-Cancellable Committed Funds, Remaining Performance Obligation, Percentage | 5% | ||
Percent of remaining performance obligations expected to be recognized in next 12 months | 73% | ||
Capitalized contract acquisition costs | $ 656 | 629 | |
Refund liabilities | 103 | $ 106 | |
Refundable customer deposits | |||
Disaggregation of Revenue | |||
Deferred revenue | $ 79 | ||
[1]The condensed consolidated balance sheet as of December 2, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - Figma shares in Millions, $ in Billions | Sep. 15, 2022 USD ($) shares |
Business Acquisition | |
Total purchase price | $ 20 |
Termination fee, merger agreement | $ 1 |
Closing period | 18 months |
Restricted Stock Units | |
Business Acquisition | |
Share based compensation arrangement, post-combination | shares | 6 |
Vesting period | 4 years |
Cash, Cash Equivalents and Sh_3
Cash, Cash Equivalents and Short-Term Investments (Details) - USD ($) $ in Millions | Mar. 03, 2023 | Dec. 02, 2022 |
Marketable Securities [Line Items] | ||
Amortized Cost | $ 5,687 | $ 6,137 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (34) | (41) |
Estimated Fair Value | 5,653 | 6,096 |
Cash | Cash | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 607 | 657 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 607 | 657 |
Total cash equivalents | Corporate debt securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 39 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Estimated Fair Value | 39 | |
Total cash equivalents | Money market funds | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 3,440 | 3,479 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 3,440 | 3,479 |
Total cash equivalents | Time deposits | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 25 | 61 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 25 | 61 |
Total cash equivalents | Total cash equivalents | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 3,465 | 3,579 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 3,465 | 3,579 |
Total cash and cash equivalents | Total cash and cash equivalents | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 4,072 | 4,236 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 4,072 | 4,236 |
Short-term fixed income securities: | Asset-backed securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 65 | 98 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (1) | (1) |
Estimated Fair Value | 64 | 97 |
Short-term fixed income securities: | Corporate debt securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 1,073 | 1,290 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (17) | (24) |
Estimated Fair Value | 1,056 | 1,266 |
Short-term fixed income securities: | Foreign government securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 5 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Estimated Fair Value | 5 | |
Short-term fixed income securities: | Municipal securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 19 | 24 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Estimated Fair Value | 19 | 24 |
Short-term fixed income securities: | U.S. agency securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 36 | 34 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (1) | 0 |
Estimated Fair Value | 35 | 34 |
Short-term fixed income securities: | U.S. Treasury securities | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 422 | 450 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (15) | (16) |
Estimated Fair Value | 407 | 434 |
Total short-term investments | Total short-term investments | ||
Marketable Securities [Line Items] | ||
Amortized Cost | 1,615 | 1,901 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (34) | (41) |
Estimated Fair Value | $ 1,581 | $ 1,860 |
Cash, Cash Equivalents and Sh_4
Cash, Cash Equivalents and Short-Term Investments - Estimated Fair Value (Details) $ in Millions | Mar. 03, 2023 USD ($) |
Estimated fair value of short-term fixed income securities | |
Due within one year | $ 906 |
Due between one and two years | 528 |
Due between two and three years | 145 |
Due after three years | 2 |
Total | $ 1,581 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets And Liabilities At Fair Value On A Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Mar. 03, 2023 | Dec. 02, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Deferred compensation plan assets | $ 186 | $ 160 |
Total assets | 5,278 | 5,650 |
Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 64 | 97 |
Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 39 | |
Short-term investments | 1,056 | 1,266 |
Foreign government securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 5 | |
Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 3,440 | 3,479 |
Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 25 | 61 |
Municipal securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 19 | 24 |
U.S. agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 35 | 34 |
U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 407 | 434 |
Foreign currency derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign currency derivatives, asset | 46 | 51 |
Foreign currency derivatives, liability | 7 | 15 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Deferred compensation plan assets | 186 | 160 |
Total assets | 3,651 | 3,700 |
Fair Value, Inputs, Level 1 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 0 | 0 |
Fair Value, Inputs, Level 1 | Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 0 | |
Short-term investments | 0 | 0 |
Fair Value, Inputs, Level 1 | Foreign government securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 0 | |
Fair Value, Inputs, Level 1 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 3,440 | 3,479 |
Fair Value, Inputs, Level 1 | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 25 | 61 |
Fair Value, Inputs, Level 1 | Municipal securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 0 | 0 |
Fair Value, Inputs, Level 1 | U.S. agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 0 | 0 |
Fair Value, Inputs, Level 1 | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 0 | 0 |
Fair Value, Inputs, Level 1 | Foreign currency derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign currency derivatives, asset | 0 | 0 |
Foreign currency derivatives, liability | 0 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Deferred compensation plan assets | 0 | 0 |
Total assets | 1,627 | 1,950 |
Fair Value, Inputs, Level 2 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 64 | 97 |
Fair Value, Inputs, Level 2 | Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 39 | |
Short-term investments | 1,056 | 1,266 |
Fair Value, Inputs, Level 2 | Foreign government securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 5 | |
Fair Value, Inputs, Level 2 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 0 | 0 |
Fair Value, Inputs, Level 2 | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 0 | 0 |
Fair Value, Inputs, Level 2 | Municipal securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 19 | 24 |
Fair Value, Inputs, Level 2 | U.S. agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 35 | 34 |
Fair Value, Inputs, Level 2 | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 407 | 434 |
Fair Value, Inputs, Level 2 | Foreign currency derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign currency derivatives, asset | 46 | 51 |
Foreign currency derivatives, liability | 7 | 15 |
Fair Value, Inputs, Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Deferred compensation plan assets | 0 | 0 |
Total assets | 0 | 0 |
Fair Value, Inputs, Level 3 | Asset-backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 0 | 0 |
Fair Value, Inputs, Level 3 | Corporate debt securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 0 | |
Short-term investments | 0 | 0 |
Fair Value, Inputs, Level 3 | Foreign government securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 0 | |
Fair Value, Inputs, Level 3 | Money market funds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 0 | 0 |
Fair Value, Inputs, Level 3 | Time deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Cash and cash equivalents | 0 | 0 |
Fair Value, Inputs, Level 3 | Municipal securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 0 | 0 |
Fair Value, Inputs, Level 3 | U.S. agency securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 0 | 0 |
Fair Value, Inputs, Level 3 | U.S. Treasury securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Short-term investments | 0 | 0 |
Fair Value, Inputs, Level 3 | Foreign currency derivatives | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Foreign currency derivatives, asset | 0 | 0 |
Foreign currency derivatives, liability | $ 0 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) $ in Millions | Mar. 03, 2023 USD ($) |
Outstanding Notes | Fair Value, Nonrecurring | Fair Value, Inputs, Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Senior Notes, Fair Value | $ 3,330 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Additional Information (Details) - Cash Flow Hedging - USD ($) $ in Millions | Mar. 03, 2023 | Jun. 07, 2019 |
Foreign Exchange Contract | ||
Derivatives and Hedging | ||
Maximum remaining maturity of foreign currency derivatives | 12 months | |
Designated as Hedging Instrument | Treasury Lock | ||
Derivatives and Hedging | ||
Notional amount | $ 1,000 | |
Cash flow hedge gain (loss) to be reclassified within twelve months | $ (5) | |
Designated as Hedging Instrument | Foreign exchange option contracts | ||
Derivatives and Hedging | ||
Maximumlength of time, foreign currency cash flow hedge | 18 months | |
Foreign currency cash flow hedge gain (Loss) to be reclassified during next 12 months | $ 15 | |
Designated as Hedging Instrument | Foreign exchange forward contracts | ||
Derivatives and Hedging | ||
Foreign currency cash flow hedge gain (Loss) to be reclassified during next 12 months | $ (1) |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 03, 2023 | Dec. 02, 2022 |
Derivative, Fair Value, Net | ||
Fair Value Asset Derivatives | $ 46 | $ 51 |
Fair Value Liability Derivatives | 7 | 15 |
Designated as Hedging Instrument | Foreign exchange option contracts | ||
Derivative, Fair Value, Net | ||
Fair Value Asset Derivatives | 41 | 36 |
Fair Value Liability Derivatives | 0 | 0 |
Designated as Hedging Instrument | Foreign exchange forward contracts | ||
Derivative, Fair Value, Net | ||
Fair Value Asset Derivatives | 0 | 0 |
Fair Value Liability Derivatives | 1 | 7 |
Derivatives not designated as hedging instruments | Foreign exchange forward contracts | ||
Derivative, Fair Value, Net | ||
Fair Value Asset Derivatives | 5 | 15 |
Fair Value Liability Derivatives | $ 6 | $ 8 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Derivative Instruments, Gain (Loss) | ||
Unrealized gains / losses on derivative instruments | $ (9) | $ 23 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign exchange option contracts | ||
Derivative Instruments, Gain (Loss) | ||
Unrealized gains / losses on derivative instruments | (13) | 23 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign exchange option contracts | Revenue | ||
Derivative Instruments, Gain (Loss) | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ 18 | $ 16 |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles - Other Intangible Assets (Details) - USD ($) $ in Millions | Mar. 03, 2023 | Dec. 02, 2022 |
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 2,659 | $ 2,700 |
Accumulated Amortization | (1,305) | (1,251) |
Net | 1,354 | 1,449 |
Customer contracts and relationships | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 1,203 | 1,204 |
Accumulated Amortization | (526) | (495) |
Net | 677 | 709 |
Purchased technology | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 1,060 | 1,060 |
Accumulated Amortization | (583) | (530) |
Net | 477 | 530 |
Trademarks | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 376 | 375 |
Accumulated Amortization | (183) | (172) |
Net | 193 | 203 |
Other | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 20 | 61 |
Accumulated Amortization | (13) | (54) |
Net | $ 7 | $ 7 |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 03, 2023 | Mar. 04, 2022 | Dec. 02, 2022 | [1] | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill | $ 12,792 | $ 12,787 | ||
Amortization of other intangible assets | 96 | $ 101 | ||
Amortization included in cost of revenue | $ 54 | $ 59 | ||
[1]The condensed consolidated balance sheet as of December 2, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles - Amortization Expense In Future Period (Details) - Other intangibles $ in Millions | Mar. 03, 2023 USD ($) |
Amortization Expense in Future Periods | |
Remainder of 2023 | $ 281 |
2024 | 331 |
2025 | 295 |
2026 | 142 |
2027 | 104 |
Thereafter | 182 |
Total expected amortization expense | $ 1,335 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Millions | Mar. 03, 2023 | Dec. 02, 2022 | |
Accrued Expense | |||
Accrued compensation and benefits | $ 525 | $ 485 | |
Accrued bonuses | 158 | 489 | |
Accrued corporate marketing | 134 | 154 | |
Taxes payable | 111 | 117 | |
Refund liabilities | 103 | 106 | |
Other | 438 | 439 | |
Accrued expenses | $ 1,469 | $ 1,790 | [1] |
[1]The condensed consolidated balance sheet as of December 2, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Unit Activity (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Mar. 03, 2023 USD ($) $ / shares shares | |
Other | |
Share price (in usd per share) | $ 344.04 |
Restricted Stock Units | |
Share Activity | |
Beginning outstanding balance (in shares) | shares | 7.4 |
Awarded (in shares) | shares | 4.1 |
Released (in shares) | shares | (1.2) |
Forfeited (in shares) | shares | (0.1) |
Ending outstanding balance (in shares) | shares | 10.2 |
Expected to vest (in shares) | shares | 9 |
Weighted Average Grant Date Fair Value | |
Beginning outstanding balance, weighted average grant date fair value (in usd per share) | $ 449.94 |
Awarded, weighted average grant date fair value (in usd per share) | 360.54 |
Released, weighted average grant date fair value (in usd per share) | 445.73 |
Forfeited, weighted average grant date fair value (in usd per share) | 461.85 |
Ending outstanding balance, weighted average grant date fair value (in usd per share) | 413.87 |
Expected to vest, weighted average grant date fair value (in usd per share) | $ 414.72 |
Aggregate Fair Value | |
Ending outstanding balance, aggregate fair value | $ | $ 3,506 |
Expected to vest, aggregate fair value | $ | 3,081 |
Other | |
Total fair value of restricted stock units vested | $ | $ 423 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance Share Activity (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Mar. 03, 2023 USD ($) $ / shares shares | |
Other | |
Share price (in usd per share) | $ 344.04 |
Performance Shares | |
Share Activity | |
Beginning outstanding balance (in shares) | shares | 0.4 |
Awarded (in shares) | shares | 0.2 |
Released (in shares) | shares | (0.1) |
Forfeited (in shares) | shares | 0 |
Ending outstanding balance (in shares) | shares | 0.5 |
Expected to vest (in shares) | shares | 0.4 |
Weighted Average Grant Date Fair Value | |
Beginning outstanding balance, weighted average grant date fair value (in usd per share) | $ 495.23 |
Awarded, weighted average grant date fair value (in usd per share) | 437.52 |
Released, weighted average grant date fair value (in usd per share) | 498.74 |
Forfeited, weighted average grant date fair value (in usd per share) | 497.45 |
Ending outstanding balance, weighted average grant date fair value (in usd per share) | 466.29 |
Expected to vest, weighted average grant date fair value (in usd per share) | $ 466.54 |
Aggregate Fair Value | |
Ending outstanding balance, aggregate fair value | $ | $ 169 |
Expected to vest, aggregate fair value | $ | $ 143 |
Other | |
Maximum target percentage | 200% |
Total fair value of performance shares vested | $ | $ 39 |
Performance Shares | Program 2020 | |
Other | |
Actual percentage achieved | 63% |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - Employee Stock Purchase Plan - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Shares purchased, ESPP | 0.2 | 0.2 |
Average purchase price of shares, ESPP ( in usd per share) | $ 286.05 | $ 393.30 |
Total intrinsic value of shares purchased, ESPP | $ 12 | $ 40 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation, Income Statement Location (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Total stock-based compensation costs | ||
Stock-based compensation costs | $ 416 | $ 322 |
Cost of revenue | ||
Total stock-based compensation costs | ||
Stock-based compensation costs | 29 | 21 |
Research and development | ||
Total stock-based compensation costs | ||
Stock-based compensation costs | 209 | 161 |
Sales and marketing | ||
Total stock-based compensation costs | ||
Stock-based compensation costs | 122 | 93 |
General and administrative | ||
Total stock-based compensation costs | ||
Stock-based compensation costs | $ 56 | $ 47 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) $ in Millions | Mar. 03, 2023 USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award | |
Unrecognized compensation cost, non-vested awards | $ 3,850 |
Period for recognition, unrecognized compensation cost | 2 years 8 months 4 days |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 03, 2023 | Mar. 04, 2022 | ||
Net unrealized gains / losses on available-for-sale securities | |||
Beginning balance, net unrealized gains / losses on available-for-sale securities | $ (41) | ||
Net unrealized gains / losses on available-for-sale securities, increase or decrease | 7 | $ (14) | |
Net unrecognized gains / losses on available-for-sale securities, reclassification adjustments | 0 | ||
Ending balance, net unrealized gains / losses on available-for-sale securities | (34) | ||
Net unrealized gains / losses on derivatives designated as hedging instruments | |||
Beginning balance, net unrealized gains / losses on derivative instruments designated as hedging instruments | 17 | ||
Net unrealized gains / losses on derivative instruments designated as hedging instruments, increase or decrease | (9) | 23 | |
Net unrealized gains / losses on derivative instruments designated as hedging instruments, reclassification adjustments | (16) | (15) | |
Ending balance, net unrealized gains / losses on derivative instruments designated as hedging instruments | (8) | ||
Cumulative foreign currency translation adjustments | |||
Beginning balance, cumulative foreign currency translation adjustments | (269) | ||
Cumulative foreign currency translation adjustment, increase or decrease | 4 | $ (34) | |
Cumulative foreign currency translation adjustment, reclassification adjustments | 0 | ||
Ending balance, cumulative foreign currency translation adjustments | (265) | ||
Accumulated other comprehensive income totals | |||
Beginning balance, total accumulated other comprehensive income, net of taxes | [1] | (293) | |
Accumulated other comprehensive income, increase or decrease | 2 | ||
Accumulated other comprehensive income, reclassification adjustments | (16) | ||
Ending balance, total accumulated other comprehensive income, net of taxes | $ (307) | ||
[1]The condensed consolidated balance sheet as of December 2, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | ||
Mar. 29, 2023 | Mar. 03, 2023 | Mar. 04, 2022 | Dec. 10, 2020 | |
Stock Repurchase Program [Line Items] | ||||
Stock repurchase program, authorized amount | $ 15,000 | |||
Payments for repurchase of common stock | $ 1,400 | $ 2,400 | ||
Repurchase of common stock, shares, acquired (in shares) | 5 | 3.8 | ||
Accelerated Share Repurchase Agreement | ||||
Stock Repurchase Program [Line Items] | ||||
Payments for repurchase of common stock | $ 1,400 | $ 2,400 | ||
Repurchase of common stock, shares, acquired (in shares) | 3.2 | 3.2 | ||
Accelerated Share Repurchase Agreement | Subsequent Event | ||||
Stock Repurchase Program [Line Items] | ||||
Repurchase of common stock, shares, acquired (in shares) | 4 | |||
Treasury stock acquired, average cost per share (in usd per share) | $ 348.46 | |||
Structured Stock Repurchase Agreement | ||||
Stock Repurchase Program [Line Items] | ||||
Repurchase of common stock, shares, acquired (in shares) | 1.8 | 0.6 | ||
Treasury stock acquired, average cost per share (in usd per share) | $ 330.52 | $ 635.15 | ||
Structured Stock Repurchase Agreement | Subsequent Event | ||||
Stock Repurchase Program [Line Items] | ||||
Payments for repurchase of common stock | $ 1,000 | |||
Stock repurchase program, remaining authorized repurchase amount | $ 4,150 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 03, 2023 | Mar. 04, 2022 | |
Earnings Per Share [Abstract] | ||
Net income | $ 1,247 | $ 1,266 |
Shares used to compute basic net income per share (in shares) | 459 | 472.6 |
Dilutive potential common shares from stock plans and programs (in shares) | 0.5 | 2.8 |
Shares used to compute diluted net income per share (in shares) | 459.5 | 475.4 |
Basic net income per share (in usd per share) | $ 2.72 | $ 2.68 |
Diluted net income per share (in usd per share) | $ 2.71 | $ 2.66 |
Anti-dilutive potential common shares | 6.2 | 0.9 |
Debt - Carrying Value of Outsta
Debt - Carrying Value of Outstanding Debt (Details) - USD ($) $ in Millions | Mar. 03, 2023 | Dec. 02, 2022 | Feb. 03, 2020 | Jan. 21, 2015 | |
Debt Instrument | |||||
Total debt outstanding, at par | $ 3,650 | $ 4,150 | |||
Current portion of debt, at par | 0 | 500 | |||
Unamortized discount and debt issuance costs | (20) | (21) | |||
Carrying value of long-term debt | $ 3,630 | 3,629 | [1] | ||
Notes 1.70% 2023 | |||||
Debt Instrument | |||||
Debt instrument, interest rate, stated percentage | 1.70% | ||||
Debt instrument, interest rate, effective percentage | 1.92% | ||||
Debt instrument, face amount | $ 0 | 500 | $ 500 | ||
Notes 1.90% 2025 | |||||
Debt Instrument | |||||
Debt instrument, interest rate, stated percentage | 1.90% | ||||
Debt instrument, interest rate, effective percentage | 2.07% | ||||
Debt instrument, face amount | $ 500 | 500 | 500 | ||
Notes 3.25% 2025 | |||||
Debt Instrument | |||||
Debt instrument, interest rate, stated percentage | 3.25% | ||||
Debt instrument, interest rate, effective percentage | 3.67% | ||||
Debt instrument, face amount | $ 1,000 | 1,000 | $ 1,000 | ||
Notes 2.15% 2027 | |||||
Debt Instrument | |||||
Debt instrument, interest rate, stated percentage | 2.15% | ||||
Debt instrument, interest rate, effective percentage | 2.26% | ||||
Debt instrument, face amount | $ 850 | 850 | 850 | ||
Notes 2.30% 2030 | |||||
Debt Instrument | |||||
Debt instrument, interest rate, stated percentage | 2.30% | ||||
Debt instrument, interest rate, effective percentage | 2.69% | ||||
Debt instrument, face amount | $ 1,300 | $ 1,300 | $ 1,300 | ||
[1]The condensed consolidated balance sheet as of December 2, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Millions | Feb. 03, 2020 | Mar. 03, 2023 | Dec. 02, 2022 | Jan. 21, 2015 | |
Debt Instrument | |||||
Carrying value of current debt | $ 0 | $ 500 | [1] | ||
Outstanding Notes | |||||
Debt Instrument | |||||
Repurchase notes at price of their principal amount plus accrued and unpaid interest | 101% | ||||
Notes 1.70% 2023 | |||||
Debt Instrument | |||||
Debt instrument, face amount | $ 500 | $ 0 | 500 | ||
Debt instrument, interest rate, effective percentage | 1.92% | ||||
Notes 1.90% 2025 | |||||
Debt Instrument | |||||
Debt instrument, face amount | 500 | $ 500 | 500 | ||
Debt instrument, interest rate, effective percentage | 2.07% | ||||
Notes 3.25% 2025 | |||||
Debt Instrument | |||||
Debt instrument, face amount | $ 1,000 | 1,000 | $ 1,000 | ||
Debt instrument, interest rate, effective percentage | 3.67% | ||||
Notes 2.15% 2027 | |||||
Debt Instrument | |||||
Debt instrument, face amount | 850 | $ 850 | 850 | ||
Debt instrument, interest rate, effective percentage | 2.26% | ||||
Notes 2.30% 2030 | |||||
Debt Instrument | |||||
Debt instrument, face amount | 1,300 | $ 1,300 | $ 1,300 | ||
Debt instrument, interest rate, effective percentage | 2.69% | ||||
Notes 2023, 1.90% 2025, 2027, and 2030 | |||||
Debt Instrument | |||||
Proceeds from issuance of debt | $ 3,140 | ||||
[1]The condensed consolidated balance sheet as of December 2, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Millions | Jan. 19, 2023 | Jun. 30, 2022 | Mar. 03, 2023 | Oct. 17, 2018 |
Term Loan Agreement | ||||
Debt Instrument | ||||
Debt instrument, face amount | $ 3,500 | |||
Delayed draw term loan, oustanding borrowings | $ 0 | |||
Term Loan Agreement | Minimum | ||||
Debt Instrument | ||||
Commitment fee percentage | 0.04% | |||
Term Loan Agreement | Maximum | ||||
Debt Instrument | ||||
Commitment fee percentage | 0.10% | |||
Term Loan Agreement | Scenario i, Scenario ii | Minimum | ||||
Debt Instrument | ||||
Margin added to SOFR and alternative currency rate to determine interest rate | 0.75% | |||
Term Loan Agreement | Scenario i, Scenario ii | Maximum | ||||
Debt Instrument | ||||
Margin added to SOFR and alternative currency rate to determine interest rate | 1.25% | |||
Term Loan Agreement | Scenario iii | ||||
Debt Instrument | ||||
Percentage added to effective funds rate in determining interest rate | 0.50% | |||
Percentage added to SOFR in determining interest rate | 1% | |||
Term Loan Agreement | Scenario iii | Minimum | ||||
Debt Instrument | ||||
Margin added to base rate to determine interest rate | 0% | |||
Term Loan Agreement | Scenario iii | Maximum | ||||
Debt Instrument | ||||
Margin added to base rate to determine interest rate | 0.25% | |||
Revolving Credit Facility | ||||
Debt Instrument | ||||
Borrowing capacity | $ 1,500 | $ 1,000 | ||
Option to request additional commitments on credit facility | 500 | |||
Maximum borrowing capacity | $ 2,000 | |||
Revolving credit agreement, outstanding borrowings | $ 0 | |||
Revolving Credit Facility | Minimum | ||||
Debt Instrument | ||||
Commitment fee percentage | 0.04% | |||
Revolving Credit Facility | Maximum | ||||
Debt Instrument | ||||
Commitment fee percentage | 0.10% | |||
Revolving Credit Facility | Scenario i, Scenario ii, Scenario iii | Minimum | ||||
Debt Instrument | ||||
Margin added to SOFR and alternative currency rate to determine interest rate | 0.46% | |||
Revolving Credit Facility | Scenario i, Scenario ii, Scenario iii | Maximum | ||||
Debt Instrument | ||||
Margin added to SOFR and alternative currency rate to determine interest rate | 0.90% | |||
Revolving Credit Facility | Scenario iv | ||||
Debt Instrument | ||||
Percentage added to effective funds rate in determining interest rate | 0.50% | |||
Percentage added to SOFR in determining interest rate | 1% |