Good afternoon, ladies and gentlemen. I would like to welcome you to Adobe Systems’ Second Quarter Fiscal Year 2017 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the call over to Mr. Mike Saviage, Vice President of Investor Relations. Please go ahead, sir.

Good afternoon and thank you for joining us today. Joining me on the call are Adobe’s President and CEO, Shantanu Narayen and Mark Garrett, Executive Vice President and CFO. In our call today, we will discuss Adobe’s second quarter fiscal year 2017 financial results. By now, you should have a copy of our earnings press release which crossed the wire approximately one hour ago. We have also posted PDFs of our earnings call prepared remarks and slides, financial targets and an updated investor datasheet on Adobe.com. If you would like a copy of these documents, you can go to Adobe’s Investor Relations page and find them listed under Quick Links. Before we get started, we want to emphasize that some of the information discussed in this call, particularly our revenue and operating model targets and our forward-looking product plans, is based on information as of today, June 20, 2017 and contains forward-looking statements that involve risk and uncertainty. Actual results may differ materially from those set forth in such statements. For a discussion of these risks and uncertainties, you should review the Forward-Looking Statements Disclosure in the earnings press release we issued today, as well as Adobe’s SEC filings. During this call, we will discuss GAAP and non-GAAP financial measures. A reconciliation between the two is available in our earnings release and in our updated investor datasheet on Adobe’s Investor Relations website. Call participants are advised that the audio of this conference call is being webcast live in Adobe Connect and is also being recorded for playback purposes. An archive of the webcast will be made available on Adobe’s Investor Relations website for approximately 45 days, and is the property of Adobe. The call audio and the webcast archive may not be re-recorded, or otherwise reproduced or distributed without prior written permission from Adobe. I will now turn the call over to Shantanu.

Thanks, Mike and good afternoon. Adobe had a record quarter with revenue of $1.77 billion, representing 27% year-over-year growth. GAAP earnings per share in Q2, was $0.75 cents and non-GAAP earnings per share was $1.02. We are executing on our strategy of enabling our customers to design and deliver best-in-class digital experiences. Digital transformation continues to be the burning agenda for creative professionals, enterprises, governments and educational institutions. Adobe is now the go-to company for creating world-class digital customer journeys from design to delivery to measurement and monetization. At the core of our ability to drive transformative change across all customer segments is Adobe Sensei, our artificial intelligence and machine learning framework, which is being deployed across all Adobe solutions to solve our customers’ greatest experience challenges. Central to our strong performance this quarter was record revenue in our Digital Media business. We achieved $1.21 billion in Digital Media revenue in Q2, a 29% increase year-over-year. We exited the quarter with over $4.56 billion of Digital Media annualized recurring revenue, or ARR. The net ARR increase in Q2 was $312 million and was driven by continued strength in our Creative Cloud and Document Cloud businesses. Creative Cloud is the one-stop shop for millions of creative people globally and we continue to successfully migrate CS customers, acquire new customers, expand into new market segments, and add value through new services. In Q2, we exceeded the $1 billion mark for Creative product revenue for the first time, an increase of 34% year-over-year. Creative Cloud growth was driven by healthy net new subscription adoption, strong retention and positive trends in our average revenue per user or ARPU. Our Adobe Stock business continues to accelerate, driven by customer demand for powerful visual content. Last week, we introduced Aesthetic Filters, a next-gen search capability leveraging…

Thanks Shantanu. In the second quarter of FY ‘17, Adobe achieved record revenue of $1.77 billion, which represents 27% year-over-year growth. GAAP diluted earnings per share in Q2 was $0.75 and non-GAAP diluted earnings per share was $1.02. Highlights in Q2 included; our first $1 billion quarter of Creative revenue, achieving strong net new Digital Media ARR of $312 million, record Adobe Experience Cloud revenue of $495 million, strong year-over-year growth in operating profit and net income, record deferred revenue with strong cash flow from operations and 86% of Q2 revenue came from recurring sources. In Digital Media, we grew segment revenue by 29% year-over-year. The addition of $312 million net new Digital Media ARR during the quarter grew total Digital Media ARR to $4.56 billion exiting Q2. Within Digital Media, we delivered Creative revenue of $1.01 billion which represents 34% year-over-year growth. In addition, we increased Creative ARR by $285 million during Q2 and exited the quarter with $4.04 billion of Creative ARR. Driving the momentum with our Creative business was continued solid demand for Creative Cloud across all segments, including individual, team and enterprise. We saw particular strength on Adobe.com and in the education market. International adoption of Creative Cloud was notable, particularly in Germany and Japan. Q2 ARR performance was also driven by solid retention, as well as quarter-over-quarter ARPU growth across all key offerings. Adobe Stock contributed to this performance with another quarter of record revenue. We are also pleased to see the growing subscription base for Adobe Stock adding to overall ARR. With Document Cloud, we achieved revenue of $200 million and Document Cloud ARR grew to $520 million exiting Q2. Across Creative Cloud and Document Cloud, Acrobat unit growth accelerated when compared to last quarter and again achieved double digit year-over-year growth. In addition,…

Thanks Mark. Adobe MAX is scheduled this fall during the week of October 16. Day 1 of our conference is Wednesday, October 18, and Adobe management will have a meeting with financial analysts and investors that afternoon. An invitation with registration information will go out within the next month and more details about the conference is available at max.adobe.com. If you wish to listen to a playback of today’s conference call, a web-based archive of the call will be available on our IR site later today. Alternatively, you can listen to a phone replay by calling 855-859-2056; use conference ID #28928378. International callers should dial 404-537-3406. The phone playback service will be available beginning at 5 p.m. Pacific Time today, and ending at 5 p.m. Pacific Time on June 27, 2017. We would now be happy to take your questions and we ask that you limit your questions to one per person. Operator?

[Operator Instructions] Your first question is from Ross MacMillan from RBC Capital Markets.

Thanks a lot and congratulations. I had one for Shantanu and a follow-up for Mark. Shantanu, just you mentioned Premiere Pro and the success you are having there with the single app products and then you commented that, that could be mechanism to drive more sales into pool of Creative Cloud. And I guess I just had a question on the overall sort of strategy in terms of the potential to create new bundles in the Creative Cloud with the analogy being the Creative Suite, but I think you had 6 different suite types. So I just wondered if you could just elaborate on that for a second and help us think about the opportunities going forward to kind of segment the Creative Cloud product portfolio? Thanks.

Yes, thanks Ross. I am happy to do so. Also, I wanted to say upfront Mark and I are actually on different cause, I was visiting the debt counsel, so I am in New York and Mark is in San Jose as usual. The strategy, Ross, with Creative Cloud was initially as you know to migrate existing customers. And so it was really important for us to simplify the offering and have a CC complete that we thought would be the right solution for the broad swath of customers that we have. And as you are aware that has played out really well. We always knew that as we wanted to attract new customers, the single app product would be a great stepping stone to get people into the platform and then convert them into full units. This is something that we did in the past whether it was within design during the print era or think products like Dreamweaver or Photoshop or Illustrator, they have always been great ways to attract new customers who may have real experience with one product and then focus on multiple products. And video is clearly being one of those new categories where more and more people are using video and the fact that Premiere Pro is such a great product in video were attracting customers to the platform and then we will convert them into CC complete whether it’s through promotions as well as training. So that’s the way to really think about it, which is when we are doing new customer acquisition just the way, photography has played out really well with photography expansion and market expansion, we think video will be the same. We are equally excited about XD and what’s happening with screen design. So, think about it as bring more customers into the platform through single apps and then convert them to higher ARPU servicing products.

That’s helpful. And just the follow-up for Mark on the ARR, you have obviously exceeded now Q1, Q2 and guiding a bit above where certainly we were for Q3, it looks like you are going to do better than your $1 billion for the year, but you didn’t raise that number. Just maybe any thoughts around sort of the $5 billion sort of exit target how we should think about that? Thanks.

Yes. Actually, if you don’t mind Ross before I answer that question, I want to clarify something. As we were reading our prepared remarks I caught something that needs clarification. So in the end of my prepared remarks we talked about how we now expect Adobe revenue year-over-year growth to be approximately 23%, that’s for the full year. It wasn’t clear whether that was the full year or the quarter, so just to be very clear, we expect the full year to be up 23% year-over-year. So, just make sure you think about that as you update your models. For ARR yes, we are very pleased how that’s playing out Ross, obviously relative to our expectations and we are not updating annual targets but clearly we are on a great trajectory, we had a great first half. And as you know, there is just lots of positive trends that are driving ARR up, everything from ARPU growing across each of the offerings. We have consistently said ARPU continues to grow across each of the offerings bringing new people into the franchise, selling them services, migrating the base over and all those trends continue. So, we are very optimistic about ARR in general.

And Ross, the other thing I might add here is that we are really focused on the $20 billion large opportunity that exists for this entire business. We were pleased also in addition to the stuff that Mark said with how both Germany and Japan have started to adopt Creative Cloud and Stock as well. So, our focus is continue to execute on the near-term, but focus on the large untapped opportunity that we have.

Great. Thanks, again. Congratulations.

Thanks, Ross.

Thank you.

Your next question is from Walter Pritchard from Citi.

Hi, thanks. Mark, I am wondering just on the ARR guidance for Q3 that seems like stronger performance than you are seeing in the last couple of years given that’s a pretty seasonally light quarter and you had strength in areas like Germany and Japan which might be weaker that quarter as well. I am wondering what gives you the confidence and what areas of the business do you expect to see the strength in Q3 ARR for Digital Media?

Yes. I mean, we kind of touched on it, Walter. We do have seasonality in prior years in the third quarter. So, I don’t think this is anything unusual in terms of strength. We just continue to see momentum across the business though it’s everything from international whether that’s Germany or Japan, like you said, ARPU going up across all the different offerings. We continue to migrate the base over. We continue to attract new users. Stock is contributing to ARR. We are starting to see the benefit of less piracy across the offering. So, all of those factors just play into our performance in the first half and what we see moving forward.

Your next question is from Kirk Materne from Evercore ISI.

Hi, this is actually Tom Mao on for Kirk. Mark, as some of your original ETLA deals come to can you talk about how that’s impacting ARPU for Creative Cloud now that you have a subscription version for the enterprise?

Yes. Maybe even I can touch on what we are hearing when we go meet with all of these customers from enterprises. The two points I would make is firstly ARPU is actually increasing. One of the things we track is the amount of the Creative Cloud ETLA customers who are adopting services when they renew their contract. And the second thing we are actually tracking right now is the actual number of users who are downloading and using the products and training it so that we can ensure that our customers get the value associated with it and both of those are going well. That again and even answering Walter’s question gives us confidence as to the ARR moving forward in the Digital Media business. But fundamentally, it’s the adoption of services, it’s the deployment of the Creative Cloud applications and the usage and training associated with it that have all done well for us in the enterprise customer base.

And just more broadly in the Digital Media business, can you talk about I think you kind of touched on the this a little bit, but just some of the drivers for ARPU increases outside of Adobe Stock?

Well, I think we have always said that as it relates to getting people on to the platform, the first step is on promotional prices to get them on to the platform. I think we mentioned in the prepared remarks that retention continues to be strong. People are using increased number of products. And so I think when we look at ARPU that’s really the reason and foreign exchange hasn’t had an impact. So it’s true usage as well as adoption of more products that’s driving ARPU.

Great. Thank you.

Your next question is from Keith Weiss from Morgan Stanley.

Hi guys, good afternoon. This is actually Stan Zlotsky sitting in for Keith. So one question for Shantanu and then one for Mark, for Shantanu, since the marketing summit what has the customer feedback been like on the partnership with Microsoft, what are customers most excited about and with this combined solution, which parts of the market are you looking to address near-term and then more long-term as the solution matures. And then a quick one for Mark, recurring revenue now just hit 86%, how much further can that go as we go and as we look at 2018 and beyond? Thank you.

I think big picture, actually when you look at what customers are saying they are all struggling with digital transformation and they want to understand how we can help them create this digital customer journey and help them take advantage of all of the technology trends that are happening. The combination of Adobe and Microsoft in that regard is clearly providing a more comprehensive solution than each one of us alone and as they are thinking about which is the cloud provider that they would standardize on the fact that we have a great application. On Azure, also really provides great go-to-market synergy between the two build organizations. The first solutions that we identified and we have actually started to deliver are the Adobe Experience Manager solution, which is a managed service on Azure. The second solution is being able to run campaign integrated with dynamics, so think of it as a complete CRM as well as messaging and campaign and orchestration solution and clearly being able to look at all of the data that they have in Experience Cloud and visualize that through Power BI. And so I think it’s the fact that together we have a more comprehensive solution, the fact that the field organization and the marketing organization is very aligned. And the fact that unlike all other partnerships which are press releases the fact that we have actually executed against it and delivered value, I think is leading to a lot of interest in our joint solutions.

And in terms of recurring revenue that’s my favorite number. It does just keep creeping up. It’s going to keep going up a bit. But it’s not going to go to 100% if we are always going to have some revenue that’s going to be recognized upfront. But I do expect that it keeps slowly increasing like this is hard to say exactly where it settles in.

Got it. Thank you.

Your next question is from Heather Bellini from Goldman Sachs.

Hey, this is Mark Grant on for Heather. Thanks for taking the question. Just wanted to follow-up real quick on the enterprise, as you talked about some of those renewals from the ETLAs from 3 years ago and with the announcements that you made around Experience Cloud at the summit, are you seeing an improvement in customer response there given the introduction of the Experience Cloud and that integrated suite and what’s the impact that you are seeing on typical contract values in the enterprise as you bring that up?

If you put yourselves in the shoes of a customer, if you are in retail what you are trying to do is ensure that all the assets that you have from creative – creation of these assets all the way out to delivery are in a consistent life cycle of content all the way from our content creation tools to when it’s delivered either through a mobile application or on the website. If you are an advertising or you are creating a campaign you want to make sure that the brand content that you have created in one country rolls out exactly with the same fidelity across multiple countries. So when we go customer after customer, they are trying to ensure that all of the digital content that’s exploding they have a good way to deal with it and to roll it out with the fidelity and the efficacy that they expect. That’s where the combination of what we have done with Creative Cloud with the ETLA option and AEM assets, the experience manager assets solution is a clear leader in the marketplace. And when I alluded to the fact that services and tracking the service usage within CC ETLA, that’s what we are trying to do which is to make sure that they have the ability to do asset management. So, the interest level I would say 3 or 4 years ago we were pitching this vision of how they could corral all their assets across the enterprise in a global way. Today, they are absolutely utilizing it and getting benefit out of it. So there is no question that we have been able to solve a customer pain point.

Great. Thank you.

Your next question is from Mark Moerdler from Bernstein Research.

Thank you very much. I would like to ask a question both Shantanu and Mark. Given the strong revenue growth for Adobe in the last few years and the expected growth this year of 23%, what would you think are the largest impediments to driving roughly 20% year-over-year growth for the next few years, is it external issues such as market size, lot of large numbers, because more internal issues such as sales staff or breadth of product offering in Digital Marketing, how should we think about it?

Well, Mark I think the first thing we always try to do is to state the overall opportunity in TAM that’s available for us. And we identified that, that was an over $60 billion market opportunity available to us. So I think you start with that. I think you look at the tailwinds that exist in the categories that we are namely content creation and what’s happening on the media side with new media types, what’s happening with augmented reality, virtual reality, more people coming into a Creative franchise. And frankly, as we have always said people having and wanting a story to tell. On the Digital Marketing side, continuing to help businesses transform just like on the individual side we are empowering people to create, it’s a massive opportunity associated with it. So, we look at it and say big picture there is no question that the market opportunity is available. Within the company, we want to make sure we are really focused on building these deep technology platforms. I think at summit Mark, you saw us talk about what we are doing with the data platform and these key strategic partnerships to ensure that we build a moat around our offering and that’s what we are focused on. And we have to continue to execute and focus on our customers. But as long as we keep our customers front and center, the opportunity is there. If you are trying to get us to back into a long target right now we are not going to do that, but we are really pleased with what we did in the first half and we are going to continue to execute against this opportunity.

That’s excellent. I appreciate it. We are just trying to get an understanding of how we should think about it. Any color would be appreciated?

Okay. Thanks, Mark.

Thanks.

Your next question is from Derrick Wood from Cowen and Company.

Thanks and nice job on the quarter. A question on the partner front, one of the things we have heard, I have been hearing recently is that demand for certified developers on Adobe, especially the Marketing Cloud is really starting to outstrip supply. So, are there incremental investments you guys are looking at in terms of driving more partner enablement in the channel? And I guess as a follow-up I would be curious if the integration with Microsoft or other ISBs can attract new third-party developers or resellers to your cloud?

Yes. Derrick that’s a great question and I think we said at summit and this is to not just of the U.S. summit, but all around the world. The number of partners who are there and creating digital practices that are based solely on Adobe’s Experience Cloud solutions is growing quite dramatically. I think from our point of view, we continue to ensure that we are providing the best training solutions for these customers. Our professional services organization is available to help them onboard, to help with architectural services that they might need and to continue to be the eyes and ears, but we are thrilled with the number of practices that have been created in every large SI as well as every large digital agency that exists. And so we just have to continue to focus on providing the best training allowing them to download and use our products. All of them are our customers. So they have first hand experience so every thing that they are doing in this particular space. And with respect to your second question, you are absolutely right, they are a couple of key both digital agencies and SI partners who view the fact that Microsoft and Adobe are working so closely together to actually create a joint practice where they have real experience with integrating these two and delivering that as value to their customers. So as long as it continues to grow and do as well as it has and an Experience Cloud does, there will be a market for somebody who is an expert in specifically the integration of these two offerings.

Okay, thanks.

Your next question is from Saket Kalia from Barclays Capital.

Hi, guys. Thanks for having me in the call. Maybe just to build in that last question for you, Mark, in the prepared comments you mentioned that partners were involved with about 50% of bookings in the Experience Cloud. Qualitatively, could you just talk about how services revenue in the Digital Marketing business has trended and maybe how you are thinking about it going forward?

Yes. Services marketing has clearly increased in that business over time as we have driven more implementations into customers, but that is not a critical number for us. From our perspective, a lot of customers want us to do the services, but we are very happy if that partner ecosystem picks up some of the services work as well. So, it’s going to be a mix of us doing it as well as our third-party ecosystem.

So one thing I might strategically add from a color perspective is one of the things we are doing is as they become more and more facile at doing each of the individual point products, we are focusing our services a little bit more on architecture and the integration between these products as a way to supplement and augment their offerings. And so again I think as Mark said in the prepared remarks, we are thrilled that we have more partners and that they are driving more revenue for themselves and we are happy to augment that through higher end architectural services as required.

Got it. Thank you.

Your next question is from Alex Zukin from Piper Jaffray.

Thanks, guys. I wanted to ask a go-to-market question around the Experience Cloud, can you maybe comment about the current structure of the sales organization? And maybe as you move towards these bigger solution oriented sales and it’s less kind of individual product focused is how are you realigning or thinking about strategically with the sales organization? And then just a follow-up to Mark, any impacts on deferred revenue that we should be aware of from the ETLA to Creative Cloud conversion or anything else?

I will take the first part. Certainly, big picture when we think about our go-to-market with sales organization and I am assuming you mean primarily in Digital Marketing, it’s a very traditional named account and organized by vertical with our sales organization in Digital Marketing, so think of it as a financial services or retail or travel and hospitality, media and publishing sales organization, so that our customers clearly understand the vocabulary of the people that they are dealing with named accounts, because these named accounts are increasingly relying on us as the complete mission-critical solution for them. And then we have the equivalent of what you might call either territory or commercial which are customers who are not yet named accounts or other verticals that exist. And we certainly have specialists as well and these specialists are able to augment, but exist with the named accounts. So, the field organization has been structured like that. All around the world, it’s executing against that. One of the new initiatives that we also have in the field organization is the strategy group that’s actually enabling them to have a recipe all the way from going from a digital transformation all the way to how they can start to execute us. So more and more customers are asking us to be their trusted strategic advisor in that particular effect and we stepped up to do that as well.

And then Alex, as it relates to deferred revenue, yes, there are a couple of things that you should probably know in there. As you know, it’s comprised of both digital media and digital marketing invoiced bookings. On the digital media side, ETLAs continue to perform well and that flows through deferred. More and more of our business is going through Adobe.com, some of which goes through deferred and then some frankly doesn’t flow through deferred. And then in Digital Marketing, there is a seasonal component to deferred. So, in Digital Marketing, you usually see a decline from Q1 to Q2, because in Q4, we have a very strong booking quarter and those Q4 bookings are typically built and hit deferred in Q1 so then you will see a bit of a seasonal decline in Q2. It was a little bit different than that last year, not to complicate things, because we had the extra week last year in Q1 and that extra week ended up billing in Q2, but typically you do see in Digital Marketing a seasonal decline from Q1 to Q2.

Got it. Thank you, guys.

Your next question is from Sterling Auty from JPMorgan.

Yes, thanks. Hi, guys. Shantanu, I would be curious if you could compare and contrast the drivers of the strength in Creative Cloud today versus a year ago and specifically wondering how much of the strength is what you are doing in the enterprise versus continued conversions of legacy Creative Suite versus just up-sell an expansion within existing Creative Cloud users?

Yes. Sterling, I think when we identified the three strategies that we were going to continue to focus on which is migration of the Creative Suite based market expansion and delivering new services. I think you have to look at it across each one of those. On the migration side, certainly, we had I think identified in November of 2016 that we have about 7 million people left to convert. We are continuing to make progress against that. We have said that Japan and Germany had lagged. That’s now showing good progress. So, the migration continues well. From a new customer acquisition, the new customer acquisition has been very healthy. And I think the fact that we have combated piracy, you can’t buy a box anymore on one of those e-commerce channels that you were able to the fact that it’s a low price of entry like I mentioned, Sterling, with video, with XD, we have new categories where we are leading the platform. That continues to be really healthy. It starts off a lot with single app and so people come on with a single app and then may move them into the complete suite. Education had a strong quarter. So that was good. And on the CC ETLA and team, I think we are just executing against all of this, our awareness of the customer, our ability for them to get value out of the entire offering is improving. And I would say big picture, Sterling, I think the biggest thing that’s driving it is the creation of good design and content has never been more important, whether that’s for the web, whether it’s for mobile applications. And so it’s not like I can point to one thing that’s actually fueling this business, it’s the fact that we have the most comprehensive offering we are innovating and we are executing, because we understand each customer in a more unique way and are addressing our offering to target them in a personalized way using our Digital Marketing solution. So, I can’t point at one thing, but are pleased with our progress against all of the initiatives we identified.

Great. Thank you.

Operator, well, we try to fit two more questions in, please.

Your next question is from Jay Vleeschhouwer from Griffin Securities.

Thank you. Good evening. Two questions for both Shantanu and Mark. Mark, you highlighted the role of Adobe.com as you typically do on the call, could you talk about the margin leverage that you are continuing to get from the growth of Adobe.com? Do you think that’s marginally played out or do you think there is further margin leverage benefits you can get from Adobe.com as the business continues to grow or perhaps you offer some new structural ways of doing business with Adobe perhaps with new combined products, single sign-on and the like? And secondly, with respect to Document Cloud, your ARR increased just over 100 million there year-over-year. At that rate, it would probably take you another 4 or 5 years to get to a $1 billion ARR for Document Cloud, but given the size of the Acrobat base more than double the Creative base and the conversion more and more to subscription. Could you foresee a perhaps material acceleration in the ARR accretion for Document Cloud and thereby get to a much higher 9-figure number sooner?

Maybe I will start off with the latter one, Mark and then you can, which is on the Document Cloud side, Jay, I think it’s really important to remember that Acrobat is also available as part of the Creative Cloud offering and is doing extremely well as part of the Creative Cloud offering. It’s probably something I should have mentioned even in Sterling and the other questions that are coming. I think we mentioned that Acrobat is seeing a record number of subscriptions and is doing well both in the Creative Cloud funnel as well as in the Document Cloud funnel and I think we have identified many times that one of the choices that we have made is to offer Acrobat as a single opt more in the Creative Cloud funnel so that we can than upsell them to our imaging solution. So I don’t just look at the Document Cloud ARR or the revenue when you think about how well Acrobat is doing, because PDF is actually doing well across both Creative Cloud and Document Cloud. And I will let Mark answer the second question.

Yes. And then as it relates to Adobe.com, Jay as you know we have been scaling Adobe.com dramatically over the past several years as we have gone through this transition. There is no doubt that that has contributed to improved margin. I think it will continue to contribute to improved margin as we continue to scale up the business on Adobe.com. It’s a major, major channel for us now and clearly a profitable, very profitable one.

Thank you.

The last question is from Samad Samana from Stephens.

Hi, congrats on a great quarter. Mark, I have a question for you, when I look at the Experience Cloud forecast for the third quarter, it looks like a deceleration which I am really surprised given the year-over-year comp and adding TubeMogul revenue can you maybe remind us if there is a lot of license revenue in the third quarter of last year and also I think you mentioned ASV growth in the past from Marketing Cloud, maybe what that was so we can reconcile that the forecast with our models?

Yes. There was some perpetual in the third and especially the fourth quarter of last year as I said in my prepared remarks. You have also got as we have said for quite a while now the mix of ASV subscription and services revenue is well in there and sometimes the services revenue plays into that. But if you look at it across the year, it’s tracking nicely against what we have said.

Okay, great. Thanks for answering that.

And since that was the last question, I just wanted to end by saying we are really pleased with our performance in the first half of fiscal ’17 both by delivering great top line growth as well as bottom line earnings I think what excites us really is the long-term opportunities that we have to continue to empower people to bring their creativity to life as well as to enable businesses to transform themselves. And from our point of view if this combination of content to create the world class digital experience customer journey is that it become so important. And the analysis of that data to deliver great business outcomes we think as what differentiates the modern enterprise and we have a unique mission critical solution in that entire life cycle. We continue to invest in deep technology. We didn’t touch much on AI & ML, but that we believe will continue to distance us from our competitors. We look forward to chatting with you at our next earnings call. Thank you for joining us today.

This concludes our call. Thanks everyone.