December 14, 2020 Adobe BUY Company Update : Design Software

The art and science of being Adobe

Adobe’s 2020 analyst meeting, concurrent with 4Q20 results and FY21 guidance (reviewed separately in our Decemebr 11th, 2020 report), reaffirmed for us three longtime pillars of the Jay Vleeschhouwer Adobe franchises and our investment thesis. These are, first, the [email protected] distinctive product portfolio and depth of technology (i.e., Adobe 646-442-4251 has, for the decades we have been following this company, been clearly and consistently committed to deep development), second, Stock Symbol NASDAQ: ADBE the business model, which has been particularly enhanced by the implementation of the subscriptions model; and third, large Current Price $486.42 addressable markets (Adobe’s creative/design and Acrobat bases 12 mos. Target Price $597.00 were already large even before Creative Cloud and Document Investment Opinion Buy Cloud but each has been undergoing years of magnification). Market Cap $2,356,215.8 mln The output of this technology-business combination can be seen Shares O/S 484.4 mln in the growth of both deferred revenues (a 20% CAGR over the Avg Daily Vol. (3 mos.) 2,548,399 shs. past half-decade) and operating cash flow (a 31% CAGR over the 52-Week Price Low/High $255.13 - $536.88 past half-decade). EPS The CEO’s and CTO’s presentations in particular on the Adobe FY 21E FY 22E FY 23E portfolio, technology vision and roadmap were again especially important as substantiating the view of where Adobe will be Q1 (Feb) $2.80E $2.98E $3.39E heading over the next half-decade and more. Over the past Q2 (May) 2.68E 3.08E 3.47E decade-and-a-half Adobe underwent two major transformations, Q3 (Aug) 2.78E 3.15E 3.57E with, first, the acquisition (which had years of lasting Q4 (Nov) 2.99E 3.36E 3.78E impact in the creative business) and, second, the creation of

$11.25E $12.56E $14.21E the separate but closely related Digital Experience business. P/E 43.2x 38.7x 34.2x the technology synregy and “vision” presentations suggest that there ought to be lasting, extensible value in the current portfolio Price/Sales NMF NMF NMF of products and IP and in emerging “application services” and

600 “intelligent services”. 550 As we saw at Max, in Digital Media, there was again over the 500 past year a plethora of new product updates and introductions; 450 in Digital Experience, too, there have been important updates

400 and introductions (see too below) and multiple references in the presentation to the “mid-market” part of the DX TAM; and, in 350 Document Cloud, the company noted the ARR trajectory and PDF 300 services momentum. The integrations within the Digital Media and 250 Digital Experience segments, and now across all three segments, Feb-20 Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 including Document Cloud, are both a technological asset and a Adobe competitive advantage.

17 State Street, 3rd Floor, New York, NY 10004 • 212.509.9500 • www.griffinsecurities.com Please Review Disclosures on Page 27 of This Report Adobe December 14, 2020

HIGHLIGHTED QUOTES FROM THE PRESENTATION – AND OUR COMMENTS

. “Being a product company at our core, we have always taken a long-term view of building deep technology platforms that are highly defensible and drive industry breakthroughs. … Now, a key aspect of our technology strategy is to develop a consistent architectural viewpoint across all of our products.”.

The former comment is substantiated by history and the latter, more prospectively, is both logical and feasible. See too our October 12th, 2020 report, “A conversation with Adobe”;

. “At the services tier, we are not only building an increasingly rich portfolio of services, but we are focused on three cross cutting themes. First, we are embedding collaboration deeply at the core of all our applications,… Second, using the shared content and data platforms, we are enabling unique cross-cloud use cases,… Lastly, we are increasingly focused on the API economy opportunity by exposing our services via open APIs to developers and ISVs in the ecosystem. You will see us aggressively focus on this new vector”.

The reference to the API ecosystem “vector” ties to one of the original rationales for the acquisition, namely its developer community – an important consideration given the “arms race” underway in the industry vis-à-vis software development. See too our May 21st, 2018 report, “Adding a “C” to DM²”.

. “We added greater collaboration capabilities to all of our leading applications…… We're focused on adding collaboration services because we can ensure that content can be seamlessly managed in the cloud and accessed from any device. And what this enables us to do on the business side is to increase engagement, but also to acquire new stakeholders and expand our customer base with these new monetization opportunities”.

The term “collaboration” appears 17 times in the slide presentation (Adobe’s technical and market have a way of hiding in plain sight….); another, separate and indicative term that appears multiple times (7) is “3D”, which too has been noticeably an important part of the Digital Media strategy and roadmap. See too our October 21st, 2020 and November 6th, 2019 reports on the Max 2020 and 2019 “sneak peeks”;

. ”PDF continues to be the lingua franca for how things happen on the Internet…. strategically as we think about the opportunity, the first is to expand what we call our Sensei-powered Acrobat verbs and it's to enable all document actions, editing, sharing, scanning and signing…. The other aspect of our Document Cloud strategy is to deliver a unified Document Cloud platform. This includes Acrobat, AEM Forms and …”.

And later, during Q&A, Adobe’s CEO commented that, “I think the Document side is probably going to see the biggest tailwinds as it relates to what happens” (i.e., digital trasnformatin)……

. ”Our strategy is to deliver a comprehensive set of applications and services grouped in solution areas such as content and commerce, customer journey management, customer data and insights. And now with the closing of our Workfront acquisition, work management”. Modeling the contribution from Workfront will be a work in process; for now, we’re assuming $140 million for FY21 and more than $200 million for FY23. It will be very interesting to see if it ends up having a large, highly incremental “re-platforming” effect similar to what happened as the Day Software acquisition (a.k.a. AEM) evolved. It was interesting to us that during Q&A the company tied the rationale (or a rationale) for Workfront to the concept of “content velocity”, a term Adobe introduced a number of years ago;

Griffin Securities Equity Research 2 Adobe December 14, 2020

. ” Creative ARR growth drivers include acquisition of new users across all geographies and segments, single app and CC complete subscriptions and strong performance in the imaging, video and Stock categories”. We calculate that Stock might have exited FY20 with a more than $300 million revenue run-rate (as compared with less than $100 million in 2015, when Fotolia was acquired.

. “The growth drivers for Experience Cloud in Q4 included accelerating adoption of platform and app services, content and commerce momentum, particularly with our AEM cloud service offering and continued recovery in the mid-market segment, as well as success signing up deals of greater than $1 million in annual deal value”. We calculate that AEM was a more than $500 million business in FY20.

. Regarding FY21 guidance, “In terms of OpEx growth, we will be investing in top line growth opportunities and our hiring is expected to return to an ordinary pace, particularly for R&D and sales and marketing roles. And we expect T&E and facilities expenses to ramp in the second half as things open back up”. The hiring commentary is corroborated by the open jobs data we showed in our December 4th, 2020 company report, plus the spot check in our Decemebr 11th, 2020 report (including references in the “special assignments” section to positions having to do with the development of specific “next-generation” technology, e.g., “next-generation Adobe Sign service offerings”, “next- generation of Content and Commerce AI services”, “next generation of services for Adobe’s Experience Platform Identity Services”.

Griffin Securities Equity Research 3 Adobe December 14, 2020

Chart A1. Adobe, “growth drivers”, 2020 analyst meeting

Source: Adobe 2020 analyst meeting

Charts A1-A2 comments. The 2020 version of the growth drivers (or “growth vectors” in the 2019 presentation) are fundamentally about the same things: there have long been, and will continue to be, multiple ways to build upon and leverage the company’s foundational technologies, combined with its operational execution and large addressable markets. A critical element here is the commitment to engineering and product development (the evidence for which includes the annual “sneak peeks” at Max and Summit).

Griffin Securities Equity Research 4 Adobe December 14, 2020

Chart A2. Adobe, “growth drivers”, 2019 analyst meeting

Source: Adobe

Griffin Securities Equity Research 5 Adobe December 14, 2020

Chart B1. Adobe, the art & science of cloud ³

Source: Adobe 2020 analyst meeting

Chart B1 comments. Adobe has leveraged what we have for some time called “DM²” – the connection of Digital Media with what used to be Digital Marketing - and is building upon that with the connection of Document Cloud to the other Adobe clouds – even as each individual cloud has its own growth dynamics (curiously, Adobe did not refer to this as “UPA”).

This combination remains in our view a material competitive differentiator and growth catalyst. This is paid for by what was $2.188 billion in R&D in FY20 and cumulative R&D of $12.5 billion over the past decade.

And as the descendant of DM², we now have Cloud ³.

Griffin Securities Equity Research 6 Adobe December 14, 2020

Chart B2. Adobe, Experience Cloud portfolio

Source: Adobe 2020 analyst meeting.

Chart B2 comments. There were some changes in terms from the 2019 version of this slide to the 2020 version, e.g., under “services’, what is “journey orchestration” was “triggered journey” and “offer decisioning” was “offer management”, AXP has been further divided into “collection”, “intelligence”, and “activation”.

Perhaps the most important change was the recent insertion of Workfront as a workflow/collaboration substrate within “Applications”. The company has introduced a new term, or objective, which is “marketing system of record” (or MSR, yet another three-letter acronym), defined as “a comprehensive marketing management system to connect teams, campaigns, budgets and activities”.

Griffin Securities Equity Research 7 Adobe December 14, 2020

Chart B3. Adobe, Experience Cloud addressable market (2019 analyst meeting)

Source: Adobe 2019analyst meeting

Griffin Securities Equity Research 8 Adobe December 14, 2020

Chart C1. Adobe, Creative Cloud revenue mix (2020 analyst meeting)

Source: Adobe

Chart C1-C2 comments. The company notes that “>60%” of Creative ARR is based on the “all-apps” (full) version of Creative Cloud (the 2019 version of this slide referred to “two-thirds”). This is consistent with our Creative Cloud model, which is constructed by single-app/full-app and by individual/team subscriber, plus ETLAs.

Our model has shown that while single-apps account for the part of product subscriptions, the all-apps accounts for the majority of Creative Cloud revenues and ARR. The trend during FY20 has been incrementally weighted to the single-apps, which could become the precursor for upselling to the all-app. Adobe appears to have faster subscriptions growth in FY20 than in FY17-FY19, including, but not limited to, a large increase in 4Q20.

Griffin Securities Equity Research 9 Adobe December 14, 2020

Chart C2. Adobe, Creative Cloud revenue, by apps (2019 analyst meeting)

Source: Adobe

Griffin Securities Equity Research 10 Adobe December 14, 2020

Chart C3. Adobe, Creative Cloud revenue, by subscriber (2020 analyst meeting)

Source: Adobe

Chart C3 comments. “Individual” subscribers now account for the slight majority of Creative ARR (more than we had modeled, possibly reflecting more all-app adoption by individuals and/or better ARPS per SKU). ETLAs appear to account for about an eighth of Creative ARR, consistent with our model

Griffin Securities Equity Research 11 Adobe December 14, 2020

Chart D1. Adobe, Document Cloud revenue mix (2020 analyst meeting)

Source: Adobe 2020 analyst meeting

Chart D1 comments. Over the past three years, Document Cloud perpetuals revenue have declined by about a third to $0.2 billion. We’re estimating FY21 Document Cloud perpetuals revenue of less than $160 million, down over 20%, and subscriptions revenues of about $1.6 billion, up 24%.

Griffin Securities Equity Research 12 Adobe December 14, 2020

Chart D2. Adobe, Document Cloud revenue mix (2019 analyst meeting)

Source: Adobe

Griffin Securities Equity Research 13 Adobe December 14, 2020

Chart E1. Adobe, Experience Cloud revenue mix (2020 analyst meeting)

Source: Adobe

Chart E1 comments. The 2020 version of the “Experience Cloud revenue mix” chart has been adjusted for the Ad Cloud reclassification. As it happens, the $0.4 billion in services revenue is consistent with our model for Experience Cloud (and, as a reminder, Experience Cloud services account for the bulk of total services reported by Adobe). For FY19, the total revenue reclassification for Ad Cloud was about $411 million and the subscriptions reclassification was about $391 million, implying about $20 million in Ad Cloud Services; through the first three quarters of FY20, the total Ad Cloud reclassification was $216 million and the subscriptions reclassification was about $210 million, implying only about $6 million for related services. We’re estimating FY21 Experience Cloud revenues of almost $3.87 billion.

Griffin Securities Equity Research 14 Adobe December 14, 2020

Chart E2. Adobe, Experience Cloud revenue mix (2019 analyst meeting)

Source: Adobe

Griffin Securities Equity Research 15 Adobe December 14, 2020

Chart 1a. Adobe, subscriptions revenue by brand ($, millions), FY12-FY20

$2,500,000 $2,400,000 $2,300,000 $2,200,000 $2,100,000 $2,000,000 $1,900,000 $1,800,000 $1,700,000 $1,600,000 $1,500,000 $1,400,000 $1,300,000 $1,200,000 $1,100,000 $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0

Creative Cloud - subscriptions Experience Cloud - subscriptions

All other - subscriptions Document Cloud - subscriptions

Source: Adobe Systems, Griffin Securities.

Chart 1b. Adobe, TTM subscriptions revenues by brand, 2008-2023E

$17,500,000 $17,000,000 Total subscriptions - TTM Creative Cloud - TTM subscriptions $16,500,000 $16,000,000 Experience Cloud - TTM subscriptions Document Cloud - TTM subscriptions $15,500,000 $15,000,000 $14,500,000 All other - TTM subscriptions $14,000,000 $13,500,000 $13,000,000 $12,500,000 $12,000,000 $11,500,000 $11,000,000 $10,500,000 $10,000,000 $9,500,000 $9,000,000 $8,500,000 $8,000,000 $7,500,000 $7,000,000 $6,500,000 $6,000,000 $5,500,000 $5,000,000 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0

Griffin Securities Equity Research 16 Adobe December 14, 2020

Chart 1c. Adobe, subscriptions revenue sequential ∆ ($, millions), FY12-FY20

$200,000 $190,000 $180,000 $170,000 $160,000 $150,000 $140,000 $130,000 $120,000 $110,000 $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 ($10,000) ($20,000) ($30,000) ($40,000) ($50,000) Creative Cloud - sequential increase Experience Cloud - sequential increase

ADBE subscriptions revenue - sequential increase

Source: Adobe Systems, Griffin Securities.

Chart 1d. Adobe, Acrobat/Document Cloud TTM revenues, FY06-FY23E

$2,450.0 $2,350.0 $2,250.0 $2,150.0 $2,050.0 $1,950.0 $1,850.0 $1,750.0 $1,650.0 $1,550.0 $1,450.0 $1,350.0 $1,250.0 $1,150.0 $1,050.0 $950.0 $850.0 $750.0 $650.0 $550.0 $450.0 $350.0 $250.0

Acrobat - Doc. Cloud -TTM

Source: Adobe Systems, Griffin Securities.

Griffin Securities Equity Research 17 Adobe December 14, 2020

Chart 1e. Adobe, Acrobat/Document Cloud subscriptions & perpetual revenues, FY13-FY23E

$750.0 $725.0 $700.0 $675.0 $650.0 $625.0 $600.0 $575.0 $550.0 $525.0 $500.0 $475.0 $450.0 $425.0 $400.0 $375.0 $350.0 $325.0 $300.0 $275.0 $250.0 $225.0 $200.0 $175.0 $150.0 $125.0 $100.0 $75.0 $50.0 $25.0 $0.0

Acrobat - Doc. Cloud - perpetual Acrobat - Doc. Cloud subscriptions revenue

Source: Adobe Systems, Griffin Securities. Chart 2. Adobe, CoR & operating expense ratios, FY10-FY23E

50.0% 47.5% 45.0% 42.5% 40.0% 37.5% 35.0% 32.5% 30.0% 27.5% 25.0% 22.5% 20.0% 17.5% 15.0% 12.5% 10.0% 7.5% 5.0% 2.5% 0.0%

ADBE R&D % ADBE sales & marketing % ADBE CoR %

Source: Company data, Griffin Securities

Chart 2 comments. We estimate that Adobe’s gross margin will increase to more than 88% in FY23, from 85.0% in FY19, due to the general scaling effects of Cloud³ growth and the diminishment of the Ad Cloud business.

Griffin Securities Equity Research 18 Adobe December 14, 2020

Chart 3a. Adobe, operating & free cash flow, 2008-2023E $10,000.0 47.5% $9,750.0 $9,500.0 45.0% $9,250.0 $9,000.0 42.5% $8,750.0 $8,500.0 $8,250.0 40.0% $8,000.0 $7,750.0 37.5% $7,500.0 $7,250.0 35.0% $7,000.0 $6,750.0 32.5% $6,500.0 $6,250.0 30.0% $6,000.0 $5,750.0 27.5% $5,500.0 $5,250.0 25.0% $5,000.0 $4,750.0 22.5% $4,500.0 $4,250.0 20.0% $4,000.0 $3,750.0 17.5% $3,500.0 $3,250.0 $3,000.0 15.0% $2,750.0 $2,500.0 12.5% $2,250.0 $2,000.0 10.0% $1,750.0 $1,500.0 7.5% $1,250.0 $1,000.0 5.0% $750.0 $500.0 2.5% $250.0 $0.0 0.0%

ADBE - OCF ADBE - FCF ADBE - operating margin

Source: Company data, Griffin Securities.

Chart 3b. Adobe, deferred revenues, FY06-FY20

$4,000.0 $3,900.0 $3,800.0 $3,700.0 $3,600.0 $3,500.0 $3,400.0 $3,300.0 $3,200.0 $3,100.0 $3,000.0 $2,900.0 $2,800.0 $2,700.0 $2,600.0 $2,500.0 $2,400.0 $2,300.0 $2,200.0 $2,100.0 $2,000.0 $1,900.0 $1,800.0 $1,700.0 $1,600.0 $1,500.0 $1,400.0 $1,300.0 $1,200.0 $1,100.0 $1,000.0 $900.0 $800.0 $700.0 $600.0 $500.0 $400.0 $300.0 $200.0 $100.0 $0.0

ADBE deferred revenue

Source: Company data, Griffin Securities.

Griffin Securities Equity Research 19 Adobe December 14, 2020

Chart 3c. Adobe, net cash, FY06-FY20

$4,750.0 $4,500.0 $4,250.0 $4,000.0 $3,750.0 $3,500.0 $3,250.0 $3,000.0 $2,750.0 $2,500.0 $2,250.0 $2,000.0 $1,750.0 $1,500.0 $1,250.0 $1,000.0 Magento, acq. $750.0 $500.0 $250.0 $0.0 ($250.0) ($500.0) ($750.0) ($1,000.0) ADBE net cash

Source: Company data, Griffin Securities.

ADOBE MODEL

(in millions, except EPS data)

FY18A 1Q19A 2Q19A 3Q19A 4Q19A FY19A 1Q20A 2Q20A 3Q20A 4Q20A FY20A 1Q21E 2Q21E 3Q21E 4Q21E FY21E 1Q22E 2Q22E 3Q22E 4Q22E FY22E 1Q23E 2Q23E 3Q23E 4Q23E FY23E Digital Media $6,325.3 $1,776.6 $1,890.2 $1,962.2 $2,078.0 $7,707.0 $2,169.0 $2,232.4 $2,336.8 $2,494.9 $9,233.1 $2,723.7 $2,634.0 $2,722.6 $2,870.2 $10,950.5 $2,894.2 $2,951.8 $3,005.7 $3,143.9 $11,995.6 $3,188.2 $3,243.5 $3,319.5 $3,447.4 $13,198.5 Digital Experience $2,443.7 $743.3 $783.5 $820.9 $858.4 $3,206.2 $858.2 $825.7 $838.0 $874.6 $3,396.4 $1,011.1 $947.4 $976.9 $1,032.1 $3,967.4 $1,053.3 $1,083.8 $1,111.3 $1,167.0 $4,415.3 $1,197.8 $1,227.3 $1,250.8 $1,312.5 $4,988.3 Publishing $260.9 $81.0 $70.6 $51.0 $55.5 $258.1 $63.9 $69.8 $50.3 $54.8 $238.8 $52.8 $74.8 $49.8 $57.8 $235.2 $62.8 $62.8 $49.8 $57.8 $233.2 $62.8 $62.8 $50.3 $58.3 $234.2 Total Revenues $9,030.0 $2,600.9 $2,744.3 $2,834.1 $2,991.9 $11,171.3 $3,091.1 $3,127.9 $3,225.1 $3,424.3 $12,868.3 $3,787.5 $3,656.2 $3,749.3 $3,960.1 $15,153.1 $4,010.2 $4,098.4 $4,166.7 $4,368.7 $16,644.0 $4,448.7 $4,533.5 $4,620.6 $4,818.2 $18,421.0

Direct costs $1,112.0 $341.2 $353.8 $358.8 $398.8 $1,452.6 $400.6 $363.4 $377.4 $383.4 $1,524.8 $410.2 $396.5 $407.8 $427.9 $1,642.4 $448.1 $458.0 $464.8 $482.1 $1,853.0 $486.7 $496.7 $502.6 $520.2 $2,006.2 Amort of intangibles $83.2 $56.1 $53.7 $57.2 $53.2 $220.2 $51.7 $51.9 $49.4 $44.9 $197.8 $49.5 $46.0 $46.0 $46.0 $187.5 $31.4 $31.4 $31.4 $31.4 $125.8 $31.2 $31.2 $31.2 $31.2 $124.8 Cost of revenues $1,195.2 $397.3 $407.5 $416.0 $452.0 $1,672.7 $452.3 $415.2 $426.8 $428.3 $1,722.6 $459.7 $442.5 $453.8 $473.9 $1,829.9 $479.6 $489.4 $496.3 $513.6 $1,978.8 $517.9 $528.0 $533.8 $551.4 $2,131.1 Gross profit $7,834.8 $2,203.7 $2,336.8 $2,418.2 $2,540.0 $9,498.6 $2,638.8 $2,712.6 $2,798.3 $2,996.0 $11,145.7 $3,327.8 $3,213.7 $3,295.5 $3,486.2 $13,323.1 $3,530.6 $3,609.0 $3,670.5 $3,855.1 $14,665.2 $3,930.8 $4,005.6 $4,086.8 $4,266.7 $16,289.9 Research & dev. $1,537.8 $464.6 $476.0 $489.8 $499.8 $1,930.2 $531.9 $531.9 $566.3 $557.9 $2,188.0 $619.3 $598.5 $614.1 $626.7 $2,458.6 $634.9 $641.3 $648.7 $656.3 $2,581.2 $665.9 $674.3 $683.7 $688.3 $2,712.2 Sales & marketing $2,629.7 $781.2 $847.0 $810.5 $800.0 $3,238.7 $856.7 $901.0 $891.8 $941.1 $3,590.7 $1,128.4 $1,061.9 $1,072.7 $1,130.9 $4,394.0 $1,162.0 $1,181.2 $1,192.5 $1,250.4 $4,786.0 $1,286.5 $1,308.6 $1,320.9 $1,378.2 $5,294.3 Gen. & admin. $744.9 $216.1 $219.3 $219.3 $225.9 $880.6 $270.9 $223.7 $230.3 $242.8 $967.6 $253.4 $239.0 $244.2 $249.4 $986.0 $253.4 $251.4 $254.4 $256.4 $1,015.6 $260.4 $260.4 $262.4 $264.4 $1,047.6 Non-recurring item $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Amortization $91.1 $46.6 $43.0 $43.0 $42.7 $175.2 $42.3 $40.1 $40.8 $39.3 $162.5 $39.7 $38.7 $38.7 $38.7 $155.7 $27.3 $27.3 $27.3 $27.3 $109.1 $26.4 $26.4 $26.4 $26.4 $105.4

Operating expenses $5,003.6 $1,508.5 $1,585.3 $1,562.6 $1,568.4 $6,224.8 $1,701.8 $1,696.7 $1,729.1 $1,781.1 $6,908.7 $2,040.8 $1,938.1 $1,969.7 $2,045.7 $7,994.3 $2,077.6 $2,101.1 $2,122.8 $2,190.3 $8,491.9 $2,239.2 $2,269.7 $2,293.4 $2,357.2 $9,159.5 Operating income $2,831.2 $695.1 $751.5 $855.6 $971.6 $3,273.8 $937.0 $1,015.9 $1,069.2 $1,214.9 $4,237.0 $1,287.0 $1,275.5 $1,325.8 $1,440.5 $5,328.8 $1,453.0 $1,507.8 $1,547.6 $1,664.8 $6,173.3 $1,691.6 $1,735.9 $1,793.4 $1,909.5 $7,130.5 Interest,other income ($46.5) $7.5 ($38.8) ($19.3) ($12.8) ($63.4) ($17.9) ($16.0) ($9.0) ($18.1) ($61.0) ($12.0) ($12.0) ($12.0) ($12.0) ($48.0) ($10.0) ($10.0) ($10.0) ($10.0) ($40.0) ($10.0) ($10.0) ($10.0) ($10.0) ($40.0) Income before taxes $2,784.8 $702.6 $712.7 $836.3 $958.8 $3,210.4 $919.1 $999.9 $1,060.2 $1,196.8 $4,176.0 $1,275.0 $1,263.5 $1,313.8 $1,428.5 $5,280.8 $1,443.0 $1,497.8 $1,537.6 $1,654.8 $6,133.3 $1,681.6 $1,725.9 $1,783.4 $1,899.5 $7,090.5 Taxes $202.6 $28.1 $78.4 $41.8 $105.5 $253.8 ($35.8) ($100.0) $105.0 ####### ($1,083.7) $197.6 $246.4 $256.2 $278.5 $978.8 $274.2 $284.6 $292.2 $314.4 $1,165.3 $319.5 $327.9 $338.9 $360.9 $1,347.2 Net income $2,582.2 $674.5 $634.3 $794.4 $853.3 $2,956.6 $954.9 $1,099.9 $955.2 $2,249.7 $5,259.7 $1,077.4 $1,017.2 $1,057.6 $1,149.9 $4,302.0 $1,168.9 $1,213.2 $1,245.5 $1,340.4 $4,968.0 $1,362.1 $1,397.9 $1,444.6 $1,538.6 $5,743.3 GAAP income $5.19 $1.36 $1.29 $1.62 $1.75 $6.01 $1.96 $2.27 $1.97 $4.64 $10.83 $2.23 $2.11 $2.19 $2.40 $8.92 $2.44 $2.53 $2.59 $2.79 $10.35 $2.84 $2.91 $3.01 $3.21 $11.97 Non-GAAP $6.74 $1.71 $1.83 $2.05 $2.29 $7.88 $2.27 $2.45 $2.57 $2.81 $10.10 $2.80 $2.68 $2.78 $2.99 $11.25 $2.98 $3.08 $3.15 $3.36 $12.56 $3.39 $3.47 $3.57 $3.78 $14.21 Shares outstanding 497.4 494.2 492.2 491.0 488.9 491.6 488.0 485.0 485.0 484.4 485.6 484.0 483.0 482.0 480.0 482.3 480.0 480.0 480.0 480.0 480.0 480.0 480.0 480.0 480.0 480.0 As % of revenues Digital Media 70.0% 68.3% 68.9% 69.2% 69.5% 69.0% 70.2% 71.4% 72.5% 72.9% 71.8% 71.9% 72.0% 72.6% 72.5% 72.3% 72.2% 72.0% 72.1% 72.0% 72.1% 71.7% 71.5% 71.8% 71.5% 71.6% Digital Marketing 27.1% 28.6% 28.6% 29.0% 28.7% 28.7% 27.8% 26.4% 26.0% 25.5% 26.4% 26.7% 25.9% 26.1% 26.1% 26.2% 26.3% 26.4% 26.7% 26.7% 26.5% 26.9% 27.1% 27.1% 27.2% 27.1% Print & Publishing 2.9% 3.1% 2.6% 1.8% 1.9% 2.3% 2.1% 2.2% 1.6% 1.6% 1.9% 1.4% 2.0% 1.3% 1.5% 1.6% 1.6% 1.5% 1.2% 1.3% 1.4% 1.4% 1.4% 1.1% 1.2% 1.3% Total Revenues 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Direct costs 12.3% 13.1% 12.9% 12.7% 13.3% 13.0% 13.0% 11.6% 11.7% 11.2% 11.8% 10.8% 10.8% 10.9% 10.8% 10.8% 11.2% 11.2% 11.2% 11.0% 11.1% 10.9% 11.0% 10.9% 10.8% 10.9% Gross profit 87.7% 86.9% 87.1% 87.3% 86.7% 87.0% 87.0% 88.4% 88.3% 88.8% 88.2% 89.2% 89.2% 89.1% 89.2% 89.2% 88.8% 88.8% 88.8% 89.0% 88.9% 89.1% 89.0% 89.1% 89.2% 89.1% Sales & marketing 29.1% 30.0% 30.9% 28.6% 26.7% 29.0% 27.7% 28.8% 27.7% 27.5% 27.9% 29.8% 29.0% 28.6% 28.6% 29.0% 29.0% 28.8% 28.6% 28.6% 28.8% 28.9% 28.9% 28.6% 28.6% 28.7% Gen. & admin. 8.2% 8.3% 8.0% 7.7% 7.6% 7.9% 8.8% 7.2% 7.1% 7.1% 7.5% 6.7% 6.5% 6.5% 6.3% 6.5% 6.3% 6.1% 6.1% 5.9% 6.1% 5.9% 5.7% 5.7% 5.5% 5.7% Research & dev. 17.0% 17.9% 17.3% 17.3% 16.7% 17.3% 17.2% 17.0% 17.6% 16.3% 17.0% 16.4% 16.4% 16.4% 15.8% 16.2% 15.8% 15.6% 15.6% 15.0% 15.5% 15.0% 14.9% 14.8% 14.3% 14.7% Amort. of intangibles 1.0% 1.8% 1.6% 1.5% 1.4% 1.6% 1.4% 1.3% 1.3% 1.1% 1.3% 1.0% 1.1% 1.0% 1.0% 1.0% 0.7% 0.7% 0.7% 0.6% 0.7% 0.6% 0.6% 0.6% 0.5% 0.6%

Operating expenses 55.4% 58.0% 57.8% 55.1% 52.4% 55.7% 55.1% 54.2% 53.6% 52.0% 53.7% 53.9% 53.0% 52.5% 51.7% 52.8% 51.8% 51.3% 50.9% 50.1% 51.0% 50.3% 50.1% 49.6% 48.9% 49.7% Oper. Margin: non-GAAP 40.0% 37.9% 38.3% 40.8% 42.6% 40.0% 40.3% 42.7% 43.5% 44.9% 42.9% 42.8% 44.1% 44.4% 45.2% 44.1% 44.1% 44.6% 44.8% 45.6% 44.8% 45.3% 45.4% 45.9% 46.6% 45.8% Oper. Margin: GAAP 31.4% 26.7% 27.4% 30.2% 32.5% 29.3% 30.3% 32.5% 33.2% 35.5% 32.9% 34.0% 34.9% 35.4% 36.4% 35.2% 36.2% 36.8% 37.1% 38.1% 37.1% 38.0% 38.3% 38.8% 39.6% 38.7% Income before taxes 30.8% 27.0% 26.0% 29.5% 32.0% 28.7% 29.7% 32.0% 32.9% 35.0% 32.5% 33.7% 34.6% 35.0% 36.1% 34.8% 36.0% 36.5% 36.9% 37.9% 36.8% 37.8% 38.1% 38.6% 39.4% 38.5% Taxes 7.3% 4.0% 11.0% 5.0% 11.0% 7.9% -3.9% -10.0% 9.9% -88.0% -25.9% 15.5% 19.5% 19.5% 19.5% 18.5% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% 19.0% Net income 28.6% 25.9% 23.1% 28.0% 28.5% 26.5% 30.9% 35.2% 29.6% 65.7% 40.9% 28.4% 27.8% 28.2% 29.0% 28.4% 29.1% 29.6% 29.9% 30.7% 29.8% 30.6% 30.8% 31.3% 31.9% 31.2%

New subscribers (000s.) 3,236 762 812 773 948 3,295 817 817 853 1,110 3,597 825 876 869 1,052 3,622 880 905 883 1,061 3,729 898 923 899 1,076 3,796 Total subscribers (000s.) 15,492 16,254 17,066 17,839 18,787 18,787 19,604 20,421 21,274 22,384 22,384 23,209 24,085 24,954 26,006 26,006 26,886 27,791 28,674 29,735 29,735 30,633 31,556 32,455 33,531 33,531 Creative Cloud ARPU* $30.92 $30.87 $30.99 $31.45 $31.73 $32.02 $32.36 $33.20 $32.66 $33.30 $33.53 $33.69 $33.73 $33.71 $33.94 $34.13 $34.34 $34.57 $34.57 $34.77 Creative Cloud ETLA (mlns) $710 $722 $736 $781 $800 $825 $850 $895 $900 $925 $950 $995 $1,015 $1,025 $1,050 $1,090 $1,115 $1,125 $1,150 $1,180 Creative ARR $6,211 $6,552 $6,866 $7,253 $7,582 $7,934 $6,866 $8,784 $9,158 $9,450 $9,841 $10,330 $10,773 $11,105 $11,521 $12,010 $12,434 $12,863 $13,219 $13,724 Year-over-year Digital Media 26.2% 21.6% 22.2% 22.0% 21.6% 21.8% 22.1% 18.1% 19.1% 20.1% 19.8% 25.6% 18.0% 16.5% 15.0% 18.6% 6.3% 12.1% 10.4% 9.5% 9.5% 10.2% 9.9% 10.4% 9.7% 10.0% Digital Experience 20.4% 34.1% 33.7% 33.7% 24.5% 31.2% 15.5% 5.4% 2.1% 1.9% 5.9% 17.8% 14.7% 16.6% 18.0% 16.8% 4.2% 14.4% 13.8% 13.1% 11.3% 13.7% 13.2% 12.6% 12.5% 13.0% Publishing 0.2% 26.1% 12.1% -25.2% -15.2% -1.1% -21.1% -1.1% -1.4% -1.3% -7.5% -17.4% 7.2% -1.0% 5.5% -1.5% 18.9% -16.0% 0.0% 0.0% -0.9% 0.0% 0.0% 1.0% 0.9% 0.4% Total Revenues 23.7% 25.1% 25.0% 23.7% 21.4% 23.7% 18.8% 14.0% 13.8% 14.5% 15.2% 22.5% 16.9% 16.3% 15.6% 17.8% 5.9% 12.1% 11.1% 10.3% 9.8% 10.9% 10.6% 10.9% 10.3% 10.7% Source: Company data; Griffin Securities estimates.

Griffin Securities Equity Research 20 Adobe December 14, 2020

ADOBE SYSTEMS RESEARCH LIBRARY (COMPANY REPORTS #1-#152, ET AL)

# Date Subject 1 6/3/2011 Initiation of coverage 2 6/22/2011 Review of 2Q11 results & outlook 3 7/5/2011 Review of 2Q11 10-Q new data 7/7/2011 Announced an upgrade program for customers of competing Mac-based digital video products 7/15/2011 Analysis of Adobe’s Mac-based software business Announced acquisition of EchoSign, plus technology updates of AIR 3 beta and Flash Player 11 7/22/2011 beta 8/3/2011 Announced a public preview of , a new HTML5 web motion and interaction design tool 8/17/2011 Awarded an expanded contract from the U.S. Department of Defense for its “Connect” service 9/8/2011 Review of enterprise content authoring and consumer digital imaging announcements 4 9/21/2011 Review of 3Q11 results & outlook 9/26/2011 Analysis of Adobe’s consumer business and seasonal importance to 4Q revenues 5 10/6/2011 Review of annual Adobe Max conference 6 10/12/2011 Review of 3Q11 10-Q new data 11/2/2011 Acquisition of privately-held Auditude, to complement and extend digital video applications 11/8/2011 Preview of annual analyst meeting 7 11/10/2011 Review of annual analyst meeting 11/21/2011 Sequel to November 10th analyst meeting report, plus update on Adobe Labs technology updates 12/8/2011 Acquisition of Efficient Frontier 8 12/16/2011 Review of 4Q11 results & outlook 1/19/2012 Comments on transition to subscriptions model 9 1/27/2012 Review of FY11 10-K new data 2/1/2012 Review of new segments ADBE will be reporting at1Q12, vs. prior segments 2/21/2012 Review of Griffin-hosted call with management of Digital Marketing segment 2/29/2012 Comments on Photoshop Touch for iPad and Project Primetime for video 3/6/2012 Comment on Photoshop Lightroom and LeanPrint 3/12/2012 Earnings preview & Adobe Labs update 10 3/20/2012 Review of 1Q12 results & outlook 11 3/26/2012 Review of Digital Marketing Summit (part 1) 3/27/2012 Review of Digital Marketing Summit (part 2) 12 3/30/2012 Review of 1Q12 10-Q new data 4/17/2012 Comment on pending CS6 launch 13 4/24/2012 Comment on CS6/Creative Cloud announcement 5/9/2012 Comments on CS6/Creative Cloud availability, and Creative Suite revenues 5/15/2012 Update on Digital Publishing Suite, "CQ", ColdFusion, and Adobe Labs 5/22/2012 Comment on new video products announcements 6/13/2012 Earnings preview & Connect 9 announcement 14 6/20/2012 Review of 2Q12 results & outlook 6/27/2012 Comments on Lightroom 4 availability on Creative Cloud 15 6/28/2012 Review of 2Q 10-Q new data 7/25/2012 Comment on Technical Communication Suite 8/9/2012 Update on Digital Publishing Suite 9/6/2012 Update on Creative Cloud & Digital Publishing Suite 10/1/2012 Review of 3Q12 10-Q new data 10/9/2012 Acrobat 11, Photoshop Elements 11 16 11/7/2012 Initiated FY14E and Creative Cloud revenue model 12/10/2012 Preview of 4Q12; Digital Publishing Suite update 17 12/14/2012 Review of 4Q12 results & outlook; revised FY13E-FY14E 12/18/2012 Adobe Labs update

Griffin Securities Equity Research 21 Adobe December 14, 2020

18 1/23/2013 Review of FY12 10-K new data; update of Creative Cloud estimates 2/5/2013 Updated Digital Media/Digital Marketing segment revenues; Digital Publishing Suite new release 2/13/2013 LiveCycle ES4 2/21/2013 HTML5 product announcements 19 3/6/2012 Digital Marketing Summit - first read 20 3/11/2013 Review of Digital Marketing Summit; revised FY13E-FY14E; raised price objective 21 3/20/2013 Review of 1Q13 results & outlook; revised FY13E-FY14E 3/22/2013 Highlights of Digital Publishing Suite webcast 22 3/29/2013 Review of 1Q13 10-Q new data 4/15/2013 NAB video products previews 5/1/2013 Update on Digital Publishing Suite 23 5/7/2013 Adobe Max conference 5/15/2013 Adobe Max "sneak peek" technology previews 24 5/17/2013 Digital Publishing Summit 25 6/172013 Preview of 2Q13 results 26 6/19/2013 Review of 2Q13 results & outlook; revised FY13E-FY14E-FY15E 27 6/28/2013 acquisition 28 7/1/2013 Review of 2Q13 10-Q new data 9/12/2013 Creative Cloud single-app promotion; Marketing Cloud, digital media, PDF Print Engine releases 29 9/13/2013 Preview of 3Q13 results 30 9/18/2013 Review of 3Q13 results & outlook; revised FY13E-FY14E-FY15E 10/14/2013 Photoshop Elements 12, Premiere Elements 12 31 11/1/2013 DPS customer event update 11/6/2013 Creative Cloud video apps updates 11/14/2013 Adobe Campaign (formerly Neolane) update 32 12/10/2013 Preview of 4Q13 results 33 12/13/2013 Review of 4Q13 & revised FY14E-FY15E; raised PO to $70 34 1/22/2014 Review of FY13 10-K new data 3/6/2014 DPS & Experience Manager update 35 3/17/2014 Preview of 1Q14; initiation of FY16E 36 3/19/2014 Review of 1Q14; revised FY14E-FY15E-FY16E; raising PO 37 3/26/2014 Review of annual Digital Marketing Summit 38 4/2/2014 Review of 1Q14 10-Q new data 5/7/2014 ColdFusion update 39 5/14/2014 Marketing Cloud update 40 6/10/2014 Preview of 2Q14 results 41 6/18/2014 Review of 2Q14; revised FY14E-FY15E-FY16E; raising PO 6/24/2014 Creative Cloud product updates released 42 6/30/2014 Review of 2Q14 10-Q new data 9/8/2014 Video products update 43 9/15/2014 Preview of 3Q14 results & new Creative Cloud charts 44 9/17/2014 Review of 3Q14; revised FY14E-FY15E-FY16E 45 9/29/2014 Review of 3Q14 10-Q new data 46 10/7/2014 Adobe Max conference 11/18/2014 Review of design software job openings new data 47 12/8/2014 Preview of 4Q14 48 12/12/2014 Review of 4Q14; revised FY15E-FY16E; raised PO to $90 12/1714 Digital Publishing Suite update 49 1/12/2015 Initiation of 2017 estimates 50 1/20/2015 Review of FY14 10-K new data 2/12/2015 Design software comparative cash flow analysis (2005-2017E)

Griffin Securities Equity Research 22 Adobe December 14, 2020

51 2/17/2015 Highlights of Griffin Securities call with Adobe Digital Marketing senior management 3/4/2015 Digital Publishing Suite (DPS) next-generation 52 3/11/2015 Review of annual Digital Marketing Summit 53 3/16/2015 Preview of 1Q15 results 54 3/17/2015 Document Cloud introduction 55 3/18/2015 Review of 1Q15; revised FY15E-FY17E 56 3/30/2015 Review of 1Q15 10-Q new data 57 4/29/2015 Creative Cloud & Marketing Cloud update; Microsoft partnership 5/28/2015 "Publish", next-generation of Digital Publishing Suite (DPS) 58 6/15/2015 Preview of 2Q15 results 59 6/17/2015 Review of 2Q15 & revised FY15E-FY17E 6/23/2015 Creative Cloud "2015" release 8/4/2015 Digital Publishing Solution (update to Digital Publishing Suite) 60 9/16/2015 Preview of 3Q15 results & Creative Cloud update 61 9/18/2015 Review of 3Q15 & revised FY15E-FY17E 62 9/24/2015 Review of 3Q15 10-Q new data 63 10/6/2015 Adobe Max conference (day 1) 64 10/7/2015 Revised FY15E-FY17E; initiated FY18E 65 12/8/2015 Preview of 4Q15 results & strategy update 12/28/2015 Review of design software job openings new data 66 1/19/2016 Review of FY15 10-K new data 2/23/2016 Adobe Experience Manager Mobile & ColdFusion 67 3/8/2016 Preview of 1Q16 results 68 3/18/2016 Review of 1Q16; revised FY16E-FY18E; revised PO to $116 69 3/30/2016 Review of annual Digital Marketing Summit 70 4/1/2016 Review of 1Q16 10-Q new data Document Cloud-Digital Marketing integration; acquisition; Digital Marketing non- 5/9/2016 subscriptions revenues 5/16/2016 Review of design software job openings new data 71 6/17/2016 Preview of 2Q16 results 72 6/22/2016 Review of 2Q16; revised FY16E-FY18E 73 6/30/2016 Review of 2Q16 10-Q new data 8/8/2016 Experience Manager Mobile update 74 9/13/2016 Preview of 3Q16 results 75 9/21/2016 Review of 3Q16 results; revised FY16E-FY18E; revised PO to $118 9/21/2016 Design software comparative cash flow analysis (2006-2018E) 76 9/27/2016 Review of 3Q16 10-Q new data 9/27/2016 Microsoft-Adobe Systems cloud platform relationship 77 11/3/2016 Adobe Max & analyst meeting highlights; initiated FY19E; revised PO to $133 11/21/2016 Adobe Max analyst meeting highlights (part deux) & "sneak peeks"; TubeMogul acquisition 78 12/12/2016 Preview of 4Q16 results 79 12/16/2016 Review of 4Q16 results; revised FY17E-FY19E Completion of TubeMogul acquisition; TV Media Management Platform (new); Adobe Sign & 12/28/2016 Microsoft Dynamics 1/4/2017 Review of design software job openings new data (#14) 80 1/10/2017 TubeMogul acquisition & guidance update 81 1/23/2017 Review of FY16 10-K new data 82 3/13/2017 Preview of 1Q17 results 83 3/17/2017 Review of 1Q17; revised FY17E-FY19E; raised PO to $147 84 3/21/2017 Digital Marketing Summit (#1) - comments on product new & MSFT relationship 85 3/27/2017 Digital Marketing Summit (#2) - comments on strategy & technology 86 3/29/2017 Review of 1Q17 10-Q new data

Griffin Securities Equity Research 23 Adobe December 14, 2020

87 6/5/2017 The Adobe Picture Book (#1); initiating FY20E; revised PO to $155 88 6/21/2017 Review of 2Q17; revised FY17E-FY20E; revised PO to $165 89 6/28/2017 Review of 2Q17 10-Q new data 8/10/2017 Apple-Amazon-Facebook ("Appazonbook") & design software 8/23/2017 Review of design software job openings new data (#15) 9/11/2017 Adobe-Microsoft product integrations 90 9/12/2017 Preview of 3Q17 results 91 9/20/2017 Review of 3Q17 results; revised FY17E-FY20E 9/25/2017 Design software comparative cash flow analysis (2010-2020E) 92 9/27/2017 Review of 3Q17 10-Q new data 93 10/16/2017 The Adobe Picture Book (#2) 94 10/18/2017 Adobe Max 2017 product announcements & pricing 95 10/19/2017 Adobe Max 2017 analyst meeting & revised FY18E-FY20E raised PO to $192 96 10/23/2017 Adobe Max "sneak peeks" 97 12/11/2017 Preview of 4Q17 results 98 12/15/2017 Review of 4Q17 results; revised FY18E-FY20E; raised PO to 4210 12/19/2017 Design software comparative cash flow analysis (2010-2020E) 12/27/2017 Review of design software job openings new data (#16) 12/27/2017 Stock-based compensation comparative analysis 99 1/22/2018 Taxation update; CFO retirement; revised FY18E-FY20E; raised PO to $226 100 1/22/2018 Review of FY17 10-K new data 2/13/2018 Digital Marketing-Digital Media new features & integrations 3/5/2018 Cloud-y picture book #3 (Adobe, Amazon, Oracle, Microsoft, Salesforce, SAP) 101 3/13/2018 Preview of 1Q18 results 102 3/16/2018 Review of 1Q18 results; revised FY18E-FY20E; raised PO to $242 3/19/2018 Stock-based compensation comparative analysis (#2) 103 3/27/2018 Adobe-Microsoft partnership update (China; data models) 104 3/28/2018 Digital Marketing Summit - comments on strategy & technology 105 4/2/2018 Review of 1Q18 10-Q new data 4/23/2018 Review of design software job openings new data (#16.5) 5/17/2018 Review of design software job openings new data (#16.6) 5/31/2018 Cloud-y picture book #4 (Adobe, Amazon, Oracle, Microsoft, Salesforce, SAP) 106 5/21/2018 Magento acquisition 107 6/21/2018 Review of 2Q18; revised FY18E-FY20E; raised PO to $278 108 6/28/2018 Review of 2Q18 10-Q new data 7/2/2018 Stock-based compensation comparative analysis (#3) 7/9/2018 Review of design software job openings new data (#16.7) 109 8/21/2018 Initiation of 2021 estimates; revised FY18E-FY20E 8/29/2018 Cloud-y picture book #5 (Adobe, Amazon, Oracle, Microsoft, Salesforce, SAP) 8/29/2018 Design software comparative cash flow analysis (2006-2021E) 110 9/6/2018 Preview of 3Q18 results 111 9/14/2018 Review of 3Q18; revised FY18E-FY21E; raised PO to $296 112 9/21/2018 Marketo acquisition 9/24/2018 Review of design software job openings new data (#16.8) 9/25/2018 Microsoft-Adobe alliance update 113 9/27/2018 Review of 3Q18 10-Q new data 114 10/3/2018 Acrobat/Document Cloud update 115 10/9/2018 Subscriptions cost of revenue analysis 116 10/15/2018 Adobe Max 2018 & FY19 preliminary guidance 117 10/16/2018 Adobe Max 2018 analyst meeting 118 10/22/2018 Adobe Max 2018 "sneak peeks"

Griffin Securities Equity Research 24 Adobe December 14, 2020

10/31/2018 Review of design software job openings new data (#16.9) 11/29/2018 Cloud-y picture book #6 (Adobe, Amazon, Oracle, Microsoft, Salesforce, SAP) 119 12/14/2018 Review of 4Q18; revised FY19E-FY21E 12/19/2018 Review of design software job openings new data (#17) 12/26/2018 Stock-based compensation comparative analysis (#4) 1/24/2019 Review of design software job openings new data (#17.1) 120 1/25/2019 Review of FY18 10-K new data 121 1/27/2019 Subscriptions cost of revenue analysis (#2) 2/19/2019 Review of design software job openings new data (#17.2) 122 2/11/2019 Preview of 1Q19 results 123 3/15/2019 Review of 1Q19; revised FY19E-FY21E; raised PO to $300 3/19/2019 Cloud-y picture book #7 (Adobe, Amazon, Oracle, Microsoft, Salesforce, SAP) 124 3/26/2019 Digital Marketing Summit - comments on strategy, new technology and partners 3/29/2019 Review of design software job openings new data (#17.3) 3/31/2019 Stock-based compensation comparative analysis (#5) 125 4/1/2019 Review of 1QFY19 10-Q new data 4/8/2019 Design software comparative cash flow analysis (2006-2021E) 5/9/2019 Review of design software job openings new data (#17.4) 126 6/19/2019 Review of 2Q19; revised FY19E-FY21E; raised PO to $303 6/23/2019 Cloud-y picture book #8 (Adobe, Amazon, Oracle, Microsoft, Salesforce, SAP) 127 6/26/2019 Review of 2QFY19 10-Q new data 7/12/2019 Review of design software job openings new data (#17.5) 8/13/2019 Review of design software job openings new data (#17.6) 128 8/20/2019 Initiation of FY22 estimates 129 9/18/2019 Review of 3Q19; revised FY19E-FY22E; raised PO to $317 130 9/26/2019 Review of 3Q19 10-Q new data 10/2/2019 Stock-based compensation comparative analysis (#6) 10/7/2019 Review of Adobe job openings new data (#17.7) 131 11/4/2019 Quick view of Max & FY20 guidance 132 11/5/2019 Adobe Max 2019 analyst meeting 133 11/6/2019 Adobe Max 2019 "sneak peeks" 134 12/8/2019 Review of Adobe job openings new data (#17.8) & 4Q19 preview 135 12/13/2019 Review of 4Q19; revised FY20E-FY22E; raised PO to $334 136 1/21/2020 Review of FY19 10-K new data 137 2/18/2020 Review of Adobe job openings new data (#18.2) 138 3/13/2020 Review of 1Q20; revised FY20E-FY23E; maintained $234 PO 3/17/2020 Design software comparative cash flow analysis (2009-2023E) 3/25/2020 Comparative 2020E-2021E results sensitivities 139 3/26/2020 Review of 1Q20 10-Q new data; revised 3Q20E-4Q20E 4/5/2020 Review of design software job openings new data (#18.3) 140 4/15/2020 Summit 2020: comments on strategy, new products and "sneak peeks" 5/17/2020 Review of design software job openings new data (#18.4) 141 6/12/2020 Review of 2Q20; revised FY20E-FY23E; raised PO to $427 142 6/24/2020 Review of 2Q20 10-Q new data 143 7/7/2020 Review of Adobe job openings new data (#18.5) 144 8/11/2020 Adobe – IBM “customer experience” partnership 145 9/1/2020 Review of Adobe job openings new data (#18.6) 146 9/16/2020 Review of 3Q20; revised FY20E-FY23E; raised PO to $597 147 9/23/2020 Review of 3Q20 10-Q new data 148 10/12/2020 Comments on hosted conference call with Adobe CTO 149 10/21/2020 Adobe Max 2020 “sneak peeks”

Griffin Securities Equity Research 25 Adobe December 14, 2020

150 11/9/2020 Workfront acquisition 151 12/4/2020 Review of Adobe job openings new data (#18.7) 152 12/11/2020 Review of 4Q20; revised FY21E-FY23E; maintained $597 PO Source: Griffin Securities. Unnumbered items indicate industry report or comment in The Software Standard industry update

Griffin Securities Equity Research 26 Adobe December 14, 2020

Disclosures

ANALYST(s) CERTIFICATION: The analyst responsible for covering the securities in this report certify that the views expressed in this research report accurately reflect their personal views about the subject Companies mentioned and its securities. The analyst responsible for covering the securities in this report certify that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation or view contained in this research report.

MEANINGS OF RATINGS: Our rating system is based upon 12 to 36 month price targets. BUY describes stocks that we expect to appreciate by more than 20%. HOLD/NEUTRAL describes stocks that we expect to change plus or minus 20%. SELL describes stocks that we expect to decline by more than 20%. SC describes stocks that Griffin Securities has Suspended Coverage of this Company and price target, if any, for this stock, because it does not currently have a sufficient basis for determining a rating or target and/or Griffin Securities is redirecting its research resources. The previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon. NR describes stocks that are Not Rated, indicating that Griffin Securities does not cover or rate this Company.

DISTRIBUTION OF RATINGS/IB SERVICES: IB Serv./Past 12 Mos.

Rating Count Percent Count Percent

BUY [BUY] 10 83.33 0 0.00 HOLD [HOLD] 2 16.66 0 0.00 SELL [SELL] 0 0.00 0 0.00

COMPANIES MENTIONED:

Ticker Company Name Rating

ADBE Adobe Buy ADBE Adobe Buy

MARKET MAKING: Griffin Securities does not maintain a market in the shares of these Companies or any other company mentioned in the report.

COMPENSATION OR SECURITIES OWNERSHIP:

The analyst Jay Vleeschhouwer who is responsible for covering the securities in this report receives compensation based upon, among other factors, the overall profitability of Griffin Securities, including profits derived from investment banking revenue. Jay Vleeschhouwer who prepared the research report, did not receive any compensation from the Companies or any other companies mentioned in this report in connection with the preparation of this report.

The analyst Jay Vleeschhouwer who is responsible for covering the securities in this report currently does not own common stock in the Companies or any other companies mentioned in this report, but in the future may from time to time engage in transactions with respect to the Companies or other companies mentioned in the report.

Griffin Securities from time to time in the future may request expenses to be paid for copying, printing, mailing and distribution of the report by the Companies and other companies mentioned in this report. Griffin Securities expects to receive, or intends to seek, compensation for investment banking services from the Companies in the next three months.

Griffin Securities Equity Research 27 Adobe December 14, 2020

Rating and Price Target History for: Adobe (ADBE US) as of 12-11-2020

12/15/17 01/22/18 03/16/18 06/21/18 09/14/18 03/15/19 06/19/19 09/18/19 11/05/19 12/13/19 06/12/20 09/16/20 B:$210 B:$226 B:$242 B:$278 B:$296 B:$300 B:$303 B:$317 B:$330 B:$334 B:$427 B:$597 550 500 450 400 350 300 250 200 150 2018 Q1 Q2 Q3 2019 Q1 Q2 Q3 2020 Q1 Q2 Q3

Created by: BlueMatrix

FORWARD-LOOKING STATEMENTS: This Report contains forward-looking statements, which involve risks and uncertainties. Actual results may differ significantly from such forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the “Risk Factors” section in the SEC filings available in electronic format through SEC Edgar filings at www.SEC.gov on the Internet.

GENERAL: Griffin Securities, Inc. (“Griffin Securities”) a FINRA member firm with its principal office in New York, New York, USA is an investment banking firm providing corporate finance, merger and acquisitions, brokerage, and investment opportunities for institutional, corporate, and private clients. The analyst(s) are employed by Griffin Securities. Our research professionals provide important input into our investment banking and other business selection processes. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein.

Griffin Securities may from time to time perform corporate finance or other services for some companies described herein and may occasionally possess material, nonpublic information regarding such companies. This information is not used in preparation of the opinions and estimates herein. While the information contained in this report and the opinions contained herein are based on sources believed to be reliable, Griffin Securities has not independently verified the facts, assumptions and estimates contained in this report. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information and opinions contained in this report.

The information contained herein is not a complete analysis of every material fact in respect to any company, industry or security. This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. We are not soliciting any action based on this material. It is for the general information of clients of Griffin Securities. It does not take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any advice or recommendation in this material, clients should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. Certain transactions - including those involving futures, options, and other derivatives as well as non-investment-grade securities - give rise to substantial risk and are not suitable for all investors. The material is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. The information contained in this report is subject to change without notice and Griffin Securities assumes no responsibility to update the report. In addition, regulatory, compliance, or other reasons may prevent us from providing updates.

DISCLOSURES FOR OTHER COMPANIES MENTIONED IN THIS REPORT: To obtain applicable current disclosures in electronic format for the subject companies in this report, please refer to SEC Edgar filings at www.SEC.gov. In particular,

Griffin Securities Equity Research 28 Adobe December 14, 2020

for a description of risks and uncertainties related to subject companies’ businesses in this report, see the “Risk Factors” section in the SEC filings.

Griffin Securities Equity Research 29