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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________
 
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 30, 2019

 or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                   to                   
 
Commission File Number: 0-15175
 
ADOBE INC.
(Exact name of registrant as specified in its charter)
________________________________
Delaware
77-0019522
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)

345 Park Avenue, San Jose, California 95110-2704
(Address of principal executive offices and zip code)

(408536-6000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.0001 par value per share
ADBE
NASDAQ
________________________________
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes   No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
(Do not check if a smaller reporting company)
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes   No
The number of shares outstanding of the registrant’s common stock as of September 20, 2019 was 484,078,609.
 



ADOBE INC.
FORM 10-Q
 
TABLE OF CONTENTS
 
 
 
Page No.

PART I—FINANCIAL INFORMATION
 
Item 1.

 

 

 

 

 

 

Item 2.

Item 3.

Item 4.
 
 
 
 

 PART II—OTHER INFORMATION
 
Item 1.

Item 1A.

Item 2.

Item 4.

Item 5.

Item 6.





 

2

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ADOBE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)
 
August 30,
2019
 
November 30,
2018
 
(Unaudited)
 
(*)
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
2,209,047

 
$
1,642,775

Short-term investments
1,441,741

 
1,586,187

Trade receivables, net of allowances for doubtful accounts of $11,778 and $14,981, respectively
1,371,697

 
1,315,578

Prepaid expenses and other current assets
727,611

 
312,499

Total current assets
5,750,096

 
4,857,039

Property and equipment, net
1,244,011

 
1,075,072

Goodwill
10,688,068

 
10,581,048

Purchased and other intangibles, net
1,815,625

 
2,069,001

Other assets
557,080

 
186,522

Total assets
$
20,054,880

 
$
18,768,682

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 

 
 

Trade payables
$
186,999

 
$
186,258

Accrued expenses
1,302,753

 
1,163,185

Debt
3,148,587

 

Deferred revenue
3,120,186

 
2,915,974

Income taxes payable
44,441

 
35,709

Total current liabilities
7,802,966

 
4,301,126

Long-term liabilities:
 
 
 

Debt
988,429

 
4,124,800

Deferred revenue
135,750

 
137,630

Income taxes payable
585,774

 
644,101

Deferred income taxes
129,401

 
46,702

Other liabilities
169,787

 
152,209

Total liabilities
9,812,107

 
9,406,568

Stockholders’ equity:
 
 
 

Preferred stock, $0.0001 par value; 2,000 shares authorized, none issued

 

Common stock, $0.0001 par value; 900,000 shares authorized; 600,834 shares issued; 
484,903 and 487,663 shares outstanding, respectively
61

 
61

Additional paid-in-capital
6,334,612

 
5,685,337

Retained earnings
13,976,701

 
11,815,597

Accumulated other comprehensive income (loss)
(193,949
)
 
(148,130
)
Treasury stock, at cost (115,931 and 113,171 shares, respectively), net of re-issuances
(9,874,652
)
 
(7,990,751
)
Total stockholders’ equity
10,242,773

 
9,362,114

Total liabilities and stockholders’ equity
$
20,054,880

 
$
18,768,682

_________________________________________ 
(*)
The condensed consolidated balance sheet as of November 30, 2018 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.
See accompanying notes to condensed consolidated financial statements.

3

Table of Contents

ADOBE INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
August 30,
2019
 
August 31,
2018
 
August 30,
2019
 
August 31,
2018
Revenue:
 
 
 
 
 
 
 
Subscription
$
2,546,571

 
$
2,021,505

 
$
7,307,635

 
$
5,737,994

Product
157,321

 
149,127

 
480,691

 
471,728

Services and support
130,234

 
120,444

 
391,026

 
355,661

Total revenue
2,834,126

 
2,291,076

 
8,179,352

 
6,565,383

 
Cost of revenue:
 
 
 
 
 
 
 
Subscription
303,885

 
199,157

 
888,392

 
550,197

Product
9,146

 
11,454

 
30,596

 
35,110

Services and support
102,932

 
84,881

 
301,749

 
250,431

Total cost of revenue
415,963

 
295,492

 
1,220,737

 
835,738

Gross profit
2,418,163

 
1,995,584

 
6,958,615

 
5,729,645

 
Operating expenses:
 
 
 
 
 
 
 
Research and development
489,827

 
398,957

 
1,430,422

 
1,121,854

Sales and marketing
812,314

 
670,084

 
2,442,759

 
1,897,256

General and administrative
219,256

 
184,063

 
654,699

 
532,543

Amortization of purchased intangibles
42,954

 
23,874

 
132,546

 
58,169

Total operating expenses
1,564,351

 
1,276,978

 
4,660,426

 
3,609,822

 Operating income
853,812

 
718,606

 
2,298,189

 
2,119,823

 
Non-operating income (expense):
 
 
 
 
 
 
 
Interest and other income (expense), net
16,552

 
1,608

 
23,376

 
29,879

Interest expense
(39,529
)
 
(21,107
)
 
(120,699
)
 
(61,369
)
Investment gains (losses), net
3,653

 
2,251

 
46,728

 
6,326

Total non-operating income (expense), net
(19,324
)
 
(17,248
)
 
(50,595
)
 
(25,164
)
Income before income taxes
834,488

 
701,358

 
2,247,594

 
2,094,659

Provision for income taxes
41,725

 
35,067

 
147,997

 
182,125

Net income
$
792,763

 
$
666,291

 
$
2,099,597

 
$
1,912,534

Basic net income per share
$
1.63

 
$
1.36

 
$
4.31

 
$
3.89

Shares used to compute basic net income per share
485,848

 
490,025

 
487,145

 
491,336

Diluted net income per share
$
1.61

 
$
1.34

 
$
4.26

 
$
3.84

Shares used to compute diluted net income per share
491,042

 
496,866

 
492,480

 
498,587



  See accompanying notes to condensed consolidated financial statements.


4

Table of Contents

ADOBE INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
 
Three Months Ended
 
Nine Months Ended
 
August 30,
2019
 
August 31,
2018
 
August 30,
2019
 
August 31,
2018
 
Increase/(Decrease)
 
Increase/(Decrease)
Net income
$
792,763

 
$
666,291

 
$
2,099,597

 
$
1,912,534

Other comprehensive income (loss), net of taxes:
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
Unrealized gains / losses on available-for-sale securities
6,867

 
5,849

 
29,178

 
(19,020
)
Reclassification adjustment for recognized gains / losses on available-for-sale securities
(36
)
 
9,645

 
157

 
9,842

Net increase (decrease) from available-for-sale securities
6,831

 
15,494

 
29,335

 
(9,178
)
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
Unrealized gains / losses on derivative instruments
(27,031
)
 
17,524

 
(8,232
)
 
47,290

Reclassification adjustment for realized gains / losses on derivative instruments
(11,034
)
 
(16,494
)
 
(38,397
)
 
(18,671
)
Net increase (decrease) from derivatives designated as hedging instruments
(38,065
)
 
1,030

 
(46,629
)
 
28,619

Foreign currency translation adjustments
(18,351
)
 
(15,342
)
 
(28,525
)
 
(35,668
)
Other comprehensive income (loss), net of taxes
(49,585
)
 
1,182

 
(45,819
)
 
(16,227
)
Total comprehensive income, net of taxes
$
743,178

 
$
667,473

 
$
2,053,778

 
$
1,896,307




See accompanying notes to condensed consolidated financial statements.



5

Table of Contents

ADOBE INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
 
 
Three Months Ended August 30, 2019
 
 
  Common Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
 Treasury Stock
 
 
 
 
Shares
 
Amount
 
 
 
 
Shares
 
Amount
 
Total
Balances at May 31, 2019
 
600,834

 
$
61

 
$
6,050,800

 
$
13,183,938

 
$
(144,364
)
 
(114,561
)
 
$
(9,158,742
)
 
$
9,931,693

Net income
 

 

 

 
792,763

 

 

 

 
792,763

Other comprehensive income (losses), net of taxes
 

 

 

 

 
(49,585
)
 

 

 
(49,585
)
Re-issuance of treasury stock under stock compensation plans
 

 

 
89,520

 

 

 
1,222

 
33,516

 
123,036

Purchase of treasury stock
 

 

 

 

 

 
(2,592
)
 
(750,000
)
 
(750,000
)
Stock-based compensation
 

 

 
194,292

 

 

 

 

 
194,292

Value of shares in deferred compensation plan
 

 

 

 

 

 

 
574

 
574

Balances at August 30, 2019
 
600,834

 
$
61

 
$
6,334,612

 
$
13,976,701

 
$
(193,949
)
 
(115,931
)
 
$
(9,874,652
)
 
$
10,242,773




 
 
Three Months Ended August 31, 2018
 
 
  Common Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
 Treasury Stock
 
 
 
 
Shares
 
Amount
 
 
 
 
Shares
 
Amount
 
Total
Balances at June 1, 2018
 
600,834

 
$
61

 
$
5,354,175

 
$
10,471,066

 
$
(129,230
)
 
(110,399
)
 
$
(6,990,489
)
 
$
8,705,583

Net income
 

 

 

 
666,291

 

 

 

 
666,291

Other comprehensive income (losses), net of taxes
 

 

 

 

 
1,182

 

 

 
1,182

Re-issuance of treasury stock under stock compensation plans
 

 

 
37,050

 

 

 
1,431

 
41,606

 
78,656

Purchase of treasury stock
 

 

 

 

 

 
(2,859
)
 
(750,000
)
 
(750,000
)
Equity awards assumed for acquisition
 

 

 
2,784

 

 

 

 

 
2,784

Stock-based compensation
 

 

 
155,313

 

 

 

 

 
155,313

Value of shares in deferred compensation plan
 

 

 

 

 

 

 
2,116

 
2,116

Balances at August 31, 2018
 
600,834

 
$
61

 
$
5,549,322

 
$
11,137,357

 
$
(128,048
)
 
(111,827
)
 
$
(7,696,767
)
 
$
8,861,925







6

Table of Contents

ADOBE INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)
(In thousands)
(Unaudited)
 
 
Nine Months Ended August 30, 2019
 
 
  Common Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
 Treasury Stock
 
 
 
 
Shares
 
Amount
 
 
 
 
Shares
 
Amount
 
Total
Balances at November 30, 2018
 
600,834

 
$
61

 
$
5,685,337

 
$
11,815,597

 
$
(148,130
)
 
(113,171
)
 
$
(7,990,751
)
 
$
9,362,114

Impacts of ASC 606 adoption
 

 

 

 
442,319

 

 

 

 
442,319

Net income
 

 

 

 
2,099,597

 

 

 

 
2,099,597

Other comprehensive income (losses), net of taxes
 

 

 

 

 
(45,819
)
 

 

 
(45,819
)
Re-issuance of treasury stock under stock compensation plans
 

 

 
81,512

 
(380,812
)
 

 
4,357

 
119,542

 
(179,758
)
Purchase of treasury stock
 

 

 

 

 

 
(7,117
)
 
(2,000,000
)
 
(2,000,000
)
Stock-based compensation
 

 

 
567,763

 

 

 

 

 
567,763

Value of shares in deferred compensation plan
 

 

 

 

 

 

 
(3,443
)
 
(3,443
)
Balances at August 30, 2019
 
600,834

 
$
61

 
$
6,334,612

 
$
13,976,701

 
$
(193,949
)
 
(115,931
)
 
$
(9,874,652
)
 
$
10,242,773




 
 
Nine Months Ended August 31, 2018
 
 
  Common Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
 Treasury Stock
 
 
 
 
Shares
 
Amount
 
 
 
 
Shares
 
Amount
 
Total
Balances at December 1, 2017
 
600,834

 
$
61

 
$
5,082,195

 
$
9,573,870

 
$
(111,821
)
 
(109,572
)
 
$
(6,084,436
)
 
$
8,459,869

Net income
 

 

 

 
1,912,534

 

 

 

 
1,912,534

Other comprehensive income (losses), net of taxes
 

 

 

 

 
(16,227
)
 

 

 
(16,227
)
Re-issuance of treasury stock under stock compensation plans
 

 

 
27,917

 
(348,729
)
 

 
4,871

 
141,645

 
(179,167
)
Purchase of treasury stock
 

 

 

 

 

 
(7,126
)
 
(1,750,000
)
 
(1,750,000
)
Equity awards assumed for acquisition
 

 

 
2,784

 

 

 

 

 
2,784

Stock-based compensation
 

 

 
436,426

 

 

 

 

 
436,426

Value of shares in deferred compensation plan
 

 

 

 

 

 

 
(3,976
)
 
(3,976
)
Impacts of the U.S. Tax Cut and Jobs Act
 

 

 

 
(318
)
 

 

 

 
(318
)
Balances at August 31, 2018
 
600,834

 
$
61

 
$
5,549,322

 
$
11,137,357

 
$
(128,048
)
 
(111,827
)
 
$
(7,696,767
)
 
$
8,861,925




See accompanying notes to condensed consolidated financial statements.

7

Table of Contents

ADOBE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Nine Months Ended
 
August 30,
2019
 
August 31,
2018
Cash flows from operating activities:
 
 
 
Net income
$
2,099,597

 
$
1,912,534

Adjustments to reconcile net income to net cash provided by operating activities:
 

 
 
Depreciation, amortization and accretion
441,057

 
239,772

Stock-based compensation
584,500

 
439,941

Deferred income taxes
(1,747
)
 
(418,114
)
Unrealized losses (gains) on investments, net
(43,456
)
 
(3,115
)
Other non-cash items
2,756

 
4,844

Changes in operating assets and liabilities, net of acquired assets and assumed liabilities:
 
 
 
Trade receivables, net
(14,050
)
 
199,002

Prepaid expenses and other assets
(289,957
)
 
(89,823
)
Trade payables
629

 
25,362

Accrued expenses
53,074

 
4,099

Income taxes payable
(39,171
)
 
433,559

Deferred revenue
252,182

 
173,250

Net cash provided by operating activities
3,045,414

 
2,921,311

Cash flows from investing activities:
 

 
 

Purchases of short-term investments
(373,057
)
 
(541,878
)
Maturities of short-term investments
477,840

 
606,594

Proceeds from sales of short-term investments
66,463

 
238,303

Acquisitions, net of cash acquired
(99,817
)
 
(1,633,041
)
Purchases of property and equipment
(300,384
)
 
(204,016
)
Purchases of long-term investments, intangibles and other assets
(59,894
)
 
(15,288
)
Proceeds from sale of long-term investments and other assets
1,674

 
2,909

Net cash used for investing activities
(287,175
)
 
(1,546,417
)
Cash flows from financing activities:
 

 
 

Purchases of treasury stock
(2,000,000
)
 
(1,750,000
)
Proceeds from re-issuance of treasury stock
232,240

 
189,743

Taxes paid related to net share settlement of equity awards
(411,998
)
 
(368,910
)
Other financing activities, net
(626
)
 
(1,132
)
Net cash used for financing activities
(2,180,384
)
 
(1,930,299
)
Effect of foreign currency exchange rates on cash and cash equivalents
(11,583
)
 
(3,523
)
Net increase (decrease) in cash and cash equivalents
566,272

 
(558,928
)
Cash and cash equivalents at beginning of period
1,642,775

 
2,306,072

Cash and cash equivalents at end of period
$
2,209,047

 
$
1,747,144

Supplemental disclosures:
 

 
 
Cash paid for income taxes, net of refunds
$
231,813

 
$
141,674

Cash paid for interest
$
124,599

 
$
61,754

Non-cash investing activities:
 
 
 
Issuance of stock awards assumed in business acquisitions
$

 
$
2,784



See accompanying notes to condensed consolidated financial statements.

8

Table of Contents

ADOBE INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
(Unaudited)

NOTE 1.  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 (“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 November 30, 2018 on file with the SEC (our “Annual Report”).
Reclassification
Certain immaterial prior year amounts have been reclassified to conform to current year presentation in the notes to the condensed consolidated financial statements.
Recently Adopted Accounting Guidance
On May 28, 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers, Topic 606 (“ASC 606”), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new revenue standard replaces most existing revenue recognition guidance in GAAP and permits the use of either the full retrospective or modified retrospective transition method.
On December 1, 2018, the beginning of our fiscal year 2019, we adopted the requirements of the new revenue standard utilizing the modified retrospective method of transition. Prior period information has not been restated and continues to be reported under the accounting standard in effect for those periods. We applied the new revenue standard to contracts that were not completed as of the adoption date, consistent with the transition guidance. Further, adoption of the new revenue standard resulted in changes to our accounting policies for revenue recognition and sales commissions as detailed below.
We recognized the following cumulative effects of initially applying the new revenue standard as of December 1, 2018:
(in thousands)
As of
November 30, 2018
 
ASC 606 Adoption Adjustments
 
As of
December 1,
2018
Assets
 
 
 
 
 
Trade receivables, net of allowances for doubtful accounts
$
1,315,578

 
$
43,028

 
$
1,358,606

Prepaid expenses and other current assets
312,499

 
186,220

 
498,719

Other assets
186,522

 
273,421

 
459,943

Liabilities and Stockholders’ Equity
 
 
 
 
 
Accrued expenses
1,163,185

 
30,358

 
1,193,543

Deferred revenue, current
2,915,974

 
(52,842
)
 
2,863,132

Deferred income taxes
46,702

 
82,834

 
129,536

Retained earnings
$
11,815,597

 
$
442,319

 
$
12,257,916




9

Table of Contents

ADOBE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Below is a summary of the adoption impacts of the new revenue standard:
We capitalized $413.2 million of contract acquisition costs comprised of sales and partner commission costs at adoption date (included in prepaid expenses and other current assets for the current portion and other assets for the long-term portion), with a corresponding adjustment to retained earnings. We are amortizing these costs over their respective expected period of benefit.
Revenue for certain contracts that were previously deferred would have been recognized in periods prior to adoption under the new standard. Upon adoption, we recorded the following adjustments to our beginning balances to reflect the amount of revenue that will no longer be recognized in future periods for such contracts: an increase in unbilled receivables (included in trade receivables, net) of $24.8 million, an increase in contract assets (included in prepaid expenses and other current assets for the current portion and other assets for the long-term portion) of $46.4 million and a decrease in deferred revenue of $52.8 million, with corresponding adjustments to retained earnings.
We recorded an increase to our opening deferred income tax liability of $82.8 million, with a corresponding adjustment to retained earnings, to record the tax effect of the above adjustments.
Further, we had other impacts to various accounts which resulted to an immaterial net reduction to our retained earnings.
Adoption of the new revenue standard impacted our condensed consolidated statement of income for the three months ended August 30, 2019 as follows:
(in thousands, except per share amounts)
As reported
 
Adjustments
 
Balances without ASC 606 adoption impact
Revenue
 
 
 
 
 
Subscription
$
2,546,571

 
$
825

 
$
2,547,396

Product
157,321

 
(32,908
)
 
124,413

Services and support
130,234

 
(3,499
)
 
126,735

Total revenue
2,834,126

 
(35,582
)
 
2,798,544

 Operating expenses
 
 
 
 
 
Sales and marketing
812,314

 
7,211

 
819,525

Provision for income taxes
41,725

 
(2,140
)
 
39,585

Net income
$
792,763

 
$
(40,653
)
 
$
752,110

Basic net income per share
$
1.63

 
$
(0.08
)
 
$
1.55

Diluted net income per share
$
1.61

 
$
(0.08
)
 
$
1.53


10

Table of Contents

ADOBE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Adoption of the new revenue standard impacted our condensed consolidated statement of income for the nine months ended August 30, 2019 as follows:
(in thousands, except per share amounts)
As reported
 
Adjustments
 
Balances without ASC 606 adoption impact
Revenue
 
 
 
 
 
Subscription
$
7,307,635

 
$
(3,412
)
 
$
7,304,223

Product
480,691

 
(74,936
)
 
405,755

Services and support
391,026

 
(4,574
)
 
386,452

Total revenue
8,179,352

 
(82,922
)
 
8,096,430

 Operating expenses
 
 
 
 
 
Sales and marketing
2,442,759

 
24,147