Thanks, Mike, and good afternoon. Fiscal 2018 was an outstanding year for Adobe and I am thrilled with what we've accomplished. Our vision to empower people to create and transform how businesses compete has never been more relevant and we welcome millions of new customers to Adobe. From students, to creative professionals, to government agencies and the world's most successful brands, customers everywhere are turning to Adobe to tell their story, drive their digital businesses, and change the world. This year we delivered significant innovation across Creative Cloud, Document Cloud and Experience Cloud. We made strategic acquisitions which have expanded our offerings and addressable markets, and we forged key partnerships that bring us increased scale. These actions have resulted in record revenue and impressive growth across all our businesses. As we enter 2019 Adobe is well-positioned to build on this momentum, delight our customers and continue to deliver impressive long-term top and bottom-line growth.

Total Adobe revenue was $9.03 billion in FY18, which represents 24% annual growth. GAAP earnings per share in FY18 was $5.20, and non-GAAP earnings per share was $6.76. Total Digital Media annualized recurring revenue or ARR exiting the year grew to $6.83 billion. FY18 Creative revenue was $5.34 billion, which represents 28% year-over-year growth. We achieved annual revenue of $982 million for Document Cloud. And in our Digital Experience business, Experience Cloud revenue for the full year was $2.44 billion, representing 20% year-over-year growth.

We closed the year with another record quarter, delivering Q4 revenue of $2.46 billion, representing 23% year-over-year growth. GAAP earnings per share for the quarter was $1.37, and non-GAAP earnings per share was $1.83. These results include the acquisition of Marketo and associated financial impacts that come with a large transaction. Excluding Marketo, we met or exceeded all of our Q4 and annual targets.

Adobe believes everyone has a story to tell. Tens of millions of people around the world tell their story with Creative Cloud, whether it's in a high school magazine, a mobile app, a documentary at Sundance or an enterprise website. We achieved record Creative revenue of $1.45 billion in Q4, with 26% year-over-year growth.

In Q4, our Creative business was fueled by strong performance across all segments, particularly among consumers. Black Friday and Cyber Monday were two of the largest single selling days in Company history.

We focused on expanding the value of Creative Cloud for existing customers, while extending its capabilities to meet the needs of broad new segments of users. In October, we held our annual MAX Creativity Conference. MAX has become a movement, with reach and impact well beyond the physical event. This year, hundreds of thousands of creative customers tuned in online to watch MAX and millions more continue to view MAX content.

Product announcements at MAX included, major updates to our flagship Creative tools, including Photoshop, Lightroom, Illustrator, InDesign and Premiere Pro, the introduction of Premiere Rush, the first all-in-one, easy-to-use video editing app for social media creators, simplifying video creation and sharing on leading platforms such as YouTube and Instagram.

Online video is one of the fastest growing creative segments, and Rush is a cornerstone of our strategy to unlock this opportunity for millions of new customers. Exciting new innovations, powered by Adobe Sensei, inside of Adobe XD, include new technology for prototyping experiences and applications for voice-enabled devices, such as Amazon Echo and New apps including Photoshop on the iPad, which will bring the power and precision of Photoshop to a touch device, and Project Gemini, a new drawing & painting application that brings unprecedented watercolor and oil painting capabilities to the digital canvas.

In our Document Cloud business, we're revolutionizing how people scan, edit, collaborate, sign and share Adobe PDFs, whether they're consumers, small businesses or large enterprises. Document Cloud revenue in Q4 was $259 million and we grew Document Cloud ARR to more than $800 million. We continue to accelerate our pace of innovation with Document Cloud, investing to modernize the PDF experience on every device and surface, and building on the document intelligence available from the billions of PDFs in market to power AI-driven experiences.

We recently shipped an all-new Acrobat DC with connected mobile apps like Adobe Scan and Acrobat Reader Mobile to create, share and collaborate with PDFs across smartphones and tablets. Adobe Sign, our e-signature solution continues to gain momentum across businesses through new integrations and partnerships, including Dropbox, Microsoft Dynamics, and ServiceNow.

Digital transformation continues to be the mandate for CEOs across the globe. To compete and win today, both B2C and B2B businesses must provide a world-class, end-to-end customer experience across every touchpoint. With Experience Cloud, Adobe is reimagining customer experience management and delivering the industry's only end-to-end solution for marketing, advertising, analytics and commerce, purpose-built for the modern enterprise.

In our Digital Experience business, we achieved Experience Cloud revenue of $690 million for the quarter, which represents 25% year-over-year growth. Key Experience Cloud customer wins in the quarter include Unilever, The Home Depot, Telegraph Media Group, Geico, Heathrow Airport and the U.S. Department of Veterans Affairs.

Delivering exceptional customer experiences demands deep customer insights and a platform built for action. We continue to invest in building the industry's first open platform for customer experience management, the Adobe Experience Platform. The Adobe Experience Platform will deliver a true, unified view of the customer for both CMOs and CIOs.

In partnership with Microsoft and SAP, the recently announced Open Data Initiative is aimed at eliminating the data silos that exist across enterprises. It will enable enterprises to harness and take action on massive volumes of customer data to deliver personalized, real-time customer experiences. We're excited to have early support for ODI from leading brands including Coca-Cola and Walmart.

Adobe's retail reports powered by Adobe Analytics data, have become the industry bellwether for holiday shopping forecasts and other digital media, commerce and cultural trends. Adobe analyzed over 1 trillion visits and 55 million product SKUs across U.S. retail sites this holiday season. Data showed that online sales reached $7.9 billion on Cyber Monday, making it the largest online shopping day of all time in the U.S.

In October, we completed our acquisition of Marketo, the leader in B2B marketing engagement, and we're off to a great start. Marketo strengthens our offering to customers, combining Experience Cloud's analytics, personalization, commerce and content capabilities with Marketo's B2B marketing engagement platform, helping customers automate and orchestrate mission critical marketing campaigns and activities from lead management and customer engagement to account-based marketing and revenue attribution.

The addition of Marketo, along with our recently integrated commerce capabilities via our acquisition of Magento, widens Adobe's lead in customer experience management across both B2B and B2C in all industries. We're well-positioned to continue capitalizing on this growing opportunity that we estimate to have a total addressable market of more than $71 billion by 2021. Adding Marketo to our Digital Experience business immediately accelerates overall revenue growth for Adobe, and other financial benefits will ramp during FY19 as the accounting impact from the transaction dissipates.

Adobe is the clear leader in the markets we serve, creativity, digital documents and customer experience management. Our solutions have become indispensable to millions of customers whether they're in the Design department or the IT department, the classroom or the boardroom.

At Adobe, it is our 20,000 global employees that form the heart and soul of our business. In October, we achieved global gender pay parity, a critical milestone in Adobe's commitment to providing employees with a workplace that is diverse and inclusive. Last week, we were named one of Fortune's Top 100 Best Workplaces for Diversity. Adobe was once again ranked on the Dow Jones Sustainability Index, a key barometer tracking sustainability-driven companies.

In 2018 we made significant investments across our product portfolio, entered new markets, and made strategic acquisitions which we believe will fuel continued top and bottom-line performance. We expect 2019 to be another year of strong product innovation and financial results.

John?

John Murphy -- Executive Vice President and Chief Financial Officer

Thanks, Shantanu. We're pleased with our Q4 and full year FY18 results. We're excited about our acquisition of Marketo which closed on October 31st, and as part of my prepared remarks, I will review our consolidated Q4 and FY18 results, and outline Marketo's impact in comparison to our targets previously provided which excluded Marketo.

In FY18, Adobe achieved record annual revenue of $9.03 billion, which represents 24% year-over-year growth. GAAP EPS for the year was $5.20, and non-GAAP EPS was $6.76.

Noteworthy achievements during the year include, Creative revenue of $5.34 billion, which represents 28% year-over-year growth, Adobe Document Cloud revenue of $982 million, which represents 17% year-over-year growth, adding a record $1.45 billion of net new Digital Media ARR during the year, and exiting FY18 with $6.83 billion of Digital Media ARR, Adobe Experience Cloud revenue of $2.44 billion, which represents 20% year-over-year growth, generating more than $4 billion in operating cash flow during the year, returning $2 billion in cash to stockholders through our stock repurchase program, and growing deferred revenue to approximately $3 billion, and increasing our unbilled backlog to approximately $5 billion exiting the year; together, this represents approximately $8 billion of contracted revenue.

Total annual revenue growth excluding Magento and Marketo was approximately 22%, well ahead of the revenue target we provided entering the year.

In the fourth quarter of FY18, Adobe achieved record revenue of $2.46 billion, which represents 23% year-over-year growth. GAAP diluted earnings per share in Q4 was $1.37 and non-GAAP diluted earnings per share was $1.83. Excluding the impact of the Marketo acquisition in Q4, we estimate GAAP EPS would have been $1.48 and non-GAAP diluted EPS would have been $1.90, both of which would have exceeded the earnings targets we provided in September.

Business and financial highlights in Q4 included, Digital Media revenue of $1.71 billion, including Creative revenue of $1.45 billion and Adobe Document Cloud revenue of $259 million, record net new Digital Media ARR of $430 million, Digital Experience revenue of $690 million, which represents 25% year-over-year growth, deferred revenue growth of 22% year-over-year, record cash flow from operations of $1.1 billion, returning $397 million of cash to our stockholders through stock buyback, and approximately 90% of our revenue in Q4 was from recurring sources.

In Digital Media, we grew segment revenue by 23% year-over-year. The addition of $430 million net new Digital Media ARR during the quarter grew the total to $6.83 billion exiting Q4.

Within Digital Media, we achieved another strong quarter with our Creative business. Creative revenue grew 26% year-over-year in Q4 and we increased Creative ARR by a record $373 million. Key growth drivers included, strong net new subscriptions across user segments and geographies, driven by robust traffic and customer acquisition on Adobe.com, and helped by typical year-end benefits including enterprise seasonality, post-MAX traffic and holiday campaigns which drove strong consumer adoption, education market success, driven by our year-long effort to increase our focus on Creative Cloud use by students and schools, continued momentum with Creative Cloud in emerging markets, services adoption, including continued strength with Adobe Stock revenue which grew by more than 25% during the year; and pricing optimizations in North America. As we outlined at our financial analyst meeting in October, we're focused on numerous initiatives to continue to fuel Creative Cloud growth in the coming years.

We achieved record Document Cloud revenue of $259 million in Q4, which represents 10% year-over-year growth, and we added $57 million of net new Document Cloud ARR during the quarter. As we discussed previously, in Q4 FY17 we achieved a significant amount of perpetual Acrobat revenue through the channel, which impacts year-over-year comparisons.

Acrobat unit growth across Creative Cloud and Document Cloud was greater than 30% during the year, and Adobe Sign revenue grew by more than 25% during FY18. With strong Acrobat subscription and Document Cloud services adoption, we exited FY18 with more than $800 million of Document Cloud ARR and solid momentum.

In our Digital Experience segment, we achieved record quarterly Experience Cloud revenue of $690 million. Magento exceeded the $30 million target we shared previously for Q4, and Marketo added $21 million during the quarter. Digital Experience year-over-year segment growth was 25% in Q4 inclusive of Marketo, and 22% excluding Marketo, ahead of our Q4 target of approximately 20%. For the year, Digital Experience year-over-year segment growth was 20% inclusive of Magento and Marketo.

We finished the year with strong subscription bookings in line with our target. In Q4, Experience Cloud subscription revenue grew 30% year-over-year and for the year, we achieved 26% year-over-year Experience Cloud subscription revenue growth, both including Magento and Marketo.

Experience Cloud performance in Q4 was driven by success across our offerings with particular strength in Analytics, AEM Assets and Magento Commerce. Our go-to-market relationship with Microsoft resulted in strong bookings in Q4 and during the year.

From a quarter-over-quarter currency perspective, FX decreased revenue by $9.5 million. We had $30.5 million in hedge gains in Q4 FY18, versus $16.8 million in hedge gains in Q3 FY18. Thus the net sequential currency increase to revenue considering hedging gains was $4.2 million. From a year-over-year currency perspective, FX increased revenue by $7.9 million. We had $30.5 million in hedge gains in Q4 FY18, versus $1 million in hedge gains in Q4 FY17. Thus the net year-over-year currency increase to revenue considering hedging gains was $37.4 million.

In Q4, Adobe's effective tax rate was 3% on both a GAAP and a non-GAAP basis. Both rates were lower than targeted due to a more favorable-than-expected geographic mix of earnings, as well as the favorable resolutions of certain income tax matters. Our trade DSO was 49 days, which compares to 55 days in the year-ago quarter, and 41 days last quarter. Deferred revenue grew to a record $3.05 billion, up 22% year-over-year. Our ending cash and short-term investment position exiting Q4 was $3.23 billion, and cash flow from operations was $1.1 billion in the quarter. The quarter-over-quarter decline in our cash position was due to funding of the Marketo acquisition.

In Q4, we repurchased approximately 1.6 million shares at a cost of $397 million. During FY18, we repurchased 8.7 million shares at a cost of $2 billion. We currently have $7.85 billion remaining of our new $8 billion repurchase authority granted in May which goes through 2021.

Now I will discuss our financial targets for the coming year. Entering FY19, we are excited about our business momentum, our market leadership position, and the large addressable markets we presented at our recent financial analyst meeting in October. The strategic acquisitions we made in FY18 increase FY19 revenue growth targets with some added complexity in describing our financial outlook. I'll explain some of the details as I walk you through our targets.

As we've stated previously we will report our FY19 results based on the new ASC 606 accounting standards beginning in March with our Q1 results. The targets we are providing today are based on ASC 605 as we are still in the process of integrating Marketo into our financial systems to report results utilizing 606. We continue to believe that moving to 606 in FY19 reporting will not materially impact our revenue. However, we now expect there will be a slight improvement to earnings through the year as we benefit from capitalization of sales commissions.

We measure ARR in constant currency during a fiscal year, and if necessary we revalue ARR at year-end for current currency rates. Adverse FX rate changes between December of last year and this year have resulted in a $123 million adjustment, and lowers our beginning FY19 Digital Media ARR balance to $6.71 billion. This expected revision is reflected in our updated investor data sheet, and our FY19 net new growth target and our quarterly results will be measured against this revalued amount during FY19.

In FY 2019, we are targeting total Adobe revenue of approximately $11.150 billion (ph), digital Media segment revenue growth of approximately 20%, net new Digital Media ARR of approximately $1.45 billion, an increase above our preliminary target provided in October, Digital Experience segment revenue growth of approximately 34%, Digital Experience subscription bookings growth of approximately 25%, a GAAP tax rate of approximately 10% and a non-GAAP tax rate of approximately 11%, GAAP earnings per share of approximately $5.54 and non-GAAP earnings per share of approximately $7.75.

Certain factors are reflected in our FY19 annual targets, specifically, approximately $35 million of adverse revenue impact due to current FX rates which have moved against us since we provided preliminary FY19 targets that were based on September spot rates, approximately $75 million reduction in revenue from the writedown of deferred revenue for Magento and Marketo due to purchase accounting and the increase in tax rates between FY18 and FY19.

In Q1 FY19 we are targeting, revenue of approximately $2.540 billion (ph), Digital Media segment year-over-year revenue growth of approximately 20%,

net new Digital Media ARR of approximately $330 million, Digital Experience segment year-over-year revenue growth of approximately 31%, other Expense of approximately $39 million, tax rate of approximately 3% on a GAAP basis, and 11% on a non-GAAP basis, share count of approximately 495 million shares, GAAP earnings per share of approximately $1.14 and non-GAAP earnings per share of approximately $1.60.

For modeling purposes, after Q1 we expect total revenue in each quarter to grow by approximately the same year-over-year growth percentage implied in our targeted revenue growth rate for the year. In addition, after Q1 we expect net new Digital Media ARR in each quarter to be sequentially similar as that achieved in past fiscal years from quarter to quarter with typical summer seasonality which can lead to sequentially lower net new ARR in Q3, as well as normal year-end sequential strength in Q4 net new ARR.

As the impact of lost deferred revenue due to purchase accounting tapers off during FY19 and as we grow our business, we expect quarterly operating margins to increase sequentially. We also expect quarterly year-over-year earnings growth rates to increase during the year.

In summary, FY18 was another record year for Adobe as demonstrated by our strong revenue and earnings growth and exceptional cash flow from operations. More importantly, during the year we've invested in the business to continue our momentum over the long-term. Our growth targets for the coming year reflect our confidence in our ability to execute, and we expect to exit FY19 with a business that continues to exhibit strong top line growth, expanding profit margins and earnings growth rates that equal or exceed top line growth rates.

I'll now turn the call back over to Mike.

Mike Saviage -- Vice President of Investor Relations

Thanks, John.

Adobe Summit returns to Las Vegas in March. Day One of our Digital Experience conference is Tuesday March 26th. Invitations with registration information to Summit will be sent out in January. More details about Summit are available at summit.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 #8459218. International callers should dial 404-537-3406. The phone playback service will be available beginning at 5 PM Pacific Time today, and ending at 9pm Pacific Time on December 19th, 2018.

We would now be happy to take your questions, and we ask that you limit your questions to one per person. Operator?

Questions and Answers:

Operator

(Operator Instructions) Your first question comes from the line of Walter Pritchard with Citi. Your line is open.

Walter Pritchard -- Citigroup -- Analyst

Hi. Thanks. I'm wondering for Shantanu on the creative side as we look to next year fiscal 2019 and ARR that you're talking about, can you help us understand maybe how some of the drivers that you saw this year may evolve into 2019? Which of the drivers there were -- do you expect to continue, which do you expect to strengthen and any that you expect to sort of wane in terms of driving that $1.45 billion ARR?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Sure, Walter. I mean, first as it relates to FY18, we are certainly thrilled with the performance and when you think about both Q4 and FY18, we actually saw strength in ARR across all offerings, as well as, all geographies. Q4 was characterized, I would say, with typical seasonal enterprise trends that we see at the end of Q4. We saw a bunch of consumer strength as we also said in our prepared remarks. But whether it was the individual offering, the team offering or the enterprise offering, they just continued to show quite a bit of momentum, and we expect that momentum frankly to continue into FY19. So I think from the individual products, when you think about what's happening with the photography bundle, what's happening with Acrobat, what's happening with the video products, clearly, we've identified that we're working on some new categories like XD and what we showed with augmented reality and virtual reality, continued offering of services which is adding to this. But as you remember, even during MAX, we announced numerous set of initiatives that we expect will all continue to drive, emerging markets, continued adoption of our services. So we're just really pleased. And I think it's important to remember, even when you look at that $1.45 billion target for next year, that FX did go adversely against us. And so when we think about both new units, as well as, renewal of units that happens next year if they are internationally, that's actually going to be adverse relative to FY 2018. So clearly I think indicating that the momentum that we saw '18 will continue.

Walter Pritchard -- Citigroup -- Analyst

Thank you.

Operator

Your next question comes from the line of Saket Kalia with Barclays Capital. Your line is open.

Saket Kalia -- Barclays Capital -- Analyst

Hi, guys. Thanks for taking my question here. Shantanu, just to maybe think a little higher level, can you just talk about how the Digital Experience sales force might change this year now that it has just a lot more to sell and potentially different types of customers to sell into with both B2C and B2B? How do you think about the sales force and sort of go-to-market in 2019 with the addition of Magento and Marketo?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Saket, what we've done is, even in fiscal 2018, as we have segmented the markets and we think very strategically about what's happening in what we call the strategic accounts versus the corporate accounts versus the territory accounts, we've got a go-to-market that's optimized around what's the best way to generate pipeline, what's the best way to have, what we would call named account salespeople versus the specialists. And the more comprehensive the offering, the more it actually strengthens our ability to drive pipeline and then convert existing customers. FY18 was characterized, I think by return to momentum that we saw in subscription bookings. We've certainly seen good adoption as we mentioned of our analytics and AEM products, as well as, Magento. And so what I'm excited about in FY19 is when you think about what we had with Adobe campaign and the B2C high volume email and cross-channel campaign capability, when you think about what Marketo bought in B2B with the lead management and account-based marketing capability, we now have really a far more comprehensive offering for the enterprise to manage and personalize their end-to-end customer journeys across all channels. So we've already demonstrated integration, Magento has been integrated with AEM. So it just feels like there is more demand for our products, there's more refinement of our go-to-market and there's a strengthening frankly of the offering, which should help.

Saket Kalia -- Barclays Capital -- Analyst

Very helpful. Thank you.

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Thanks.

Operator

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

Brad Zelnick -- Credit Suisse -- Analyst

Thanks very much and congrats on a strong finish to a great year. Shantanu at MAX, you spoke a bit about Adobe's data driven operating model. But I think it would be helpful if you could spend a moment reminding us why this is a competitive advantage and how it contributes to the visibility and predictability that you have in your business?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Sure, Brad and thanks for the comments. I mean, going back to the data driven operating model. I mean it's a vocabulary that's so prevalent now within Adobe and when we talk about discover, try, buy, use and renew, I think it just enables us to have tremendous focus across each parts of it. I think most companies start off with really good awareness at the top of the funnel, which is on the discover phase. But what I think we have done is actually provided a really good mathematical underpinning to what we need to do across each of those. So I know you have and others in the past have asked us questions about how we think about promotions. We have incredible data about what is the right way to target those customers, how do they then convert into paying customers, in which countries do trials work, and which countries do trials not work. In terms of the buying, what are the right offers, how do you make recommendations, how do you convert people and upsell them into other offerings? And on the use, which is where I would say in FY18, we spend the most time, clearly as the base grows larger and larger and larger it's in the utilization of the products and ensuring that they get value the greatest upside exists for Adobe. And so the best example I could give you is once I was at a Wednesday meeting where the entire team was talking about what was happening in real time and they were making decisions in real time. So, having this mathematical underpinning in a model and empowering people in real time across every geography to make the right decisions based on data, I think that's really the power of this model. And I think you've seen that in our results.

Brad Zelnick -- Credit Suisse -- Analyst

Thank you.

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Thanks, Brad.

Operator

Your next question comes from the line of Alex Zukin with Piper Jaffray. Your line is open.

Taylor Reiners -- Piper Jaffray -- Analyst

Hi, thanks for taking my question. This is Taylor Reiners on for Alex. One of the interesting points we picked up from our conversations with partners is that it seems like AEM forms has been picking up quite a bit. So, wondering if you could dig in a bit more on the momentum you've been seeing there and then maybe any comments on what you've been seeing within the e-signature market?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Yeah, I mean I think the whole paper to digital movement just continues to be a big driver of what's happening in digital transformation. And so if you think about most enterprises, what they have to do is they first have to create this website to engage with customers and then allowing them to transact businesses digitally is a big imperative. And so to that end, what we have done both on the Acrobat side as well as on the AEM form side to allow everything from ad hoc work flows as well as more structured workflows to happen using our products. It's clearly a drive that we see. Government tends to be a big area of usage for AEM forms as you can imagine and the usage of PDF there is high because governments can have a mandate that citizens buy software in order to engage with customers. And so I think that's the reason for the underlying strength and AEM is a platform. We also talked about AEM assets and how content management has grown. And from our point of view, as we think about documents, sign is just one of the many verbs that we focus on the entire document opportunities, such a large opportunity, and signing is something that we've enabled, we have this incredible reach in terms of the client that we have and the footprint allows us to sign things. But it's again all about creating those documents and sharing those documents and scanning those documents. And so our strength in PDF as a format, our strength in the web content management and our strength in these verbs including the ability for people to sign, I think, is what gives us confidence that this will continue to drive business for us.

Taylor Reiners -- Piper Jaffray -- Analyst

Thanks and congrats on a good quarter.

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Thank you.

Operator

Your next question comes from the line of Kirk Materne with Evercore ISI. Your line is open.

Kirk Materne -- Evercore ISI -- Analyst

Thanks very much and I'll echo the comments around another strong quarter and great year. I guess, Shantanu I was wondering just about Magento, it seems that that came in a little bit above your expectations and I know it's still early. But commerce seems to be an area that almost every enterprise is interested in, to some degree or the other. I was just kind of curious about how that's helping round out. I think you talked about this a little bit earlier, but how that specifically helping you round out sort of your offering especially B2C clients as that's an area you used have to partner with other people around so I was just kind of curious if you could just comment specifically on Magento. Thanks.

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Sure, Kirk. I mean strategically there are two things that we're excited about with the Magento Commerce solution. The first is for larger enterprises the ability to now finally close the loop. We have the content management, we have audience segmentation, and at Magento Live in Barcelona we actually already have shown how you can integrate AEM with Magento Commerce. So that's been one of the strategic wins for us, as people are thinking about next generation commerce with mobile being a more fundamental part of it. So just having that built-in integration, having the ability for our sales people to sell the entire solution to our customers, it's clearly an advantage. The other strategic area of focus for us with Magento is really where Magento was very strong, namely in the mid-market and small and medium businesses. The fact that we have technology and content management and analytics and personalization to add to that as an out-of-box offering for those set of customers is also a strategic advantage for us and certainly Marketo adds to that in terms of the offering for that particular segment of customers. So it's across both these dimensions that we do it and underlying all of that I think is there over 300,000 developers, the ecosystem that they have that's in effect for us a channel and that I think with Adobe's brand and that distribution and reach I think we should continue to capitalize on that opportunity.

Kirk Materne -- Evercore ISI -- Analyst

Thanks. That's helpful. Happy holidays.

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Happy holidays, Kirk.

Operator

Your next question comes from the line of Jennifer Lowe with UBS. Your line is open.

Jennifer Lowe -- UBS -- Analyst

Great. Thank you. Congrats on the quarter and thank you for the detail on Marketo and Magento impacts in Q4. And maybe rolling that to fiscal '19 I think there's a few breadcrumbs in there that would let us get to the revenue impact and the interest expense impacts associated with Marketo. But can you just talk a little bit about the expense line impacts of Marketo embedded in the guidance both in terms of direct cost acquired with Marketo and also opportunities to invest in that business given that private equity has been controlling the purse strings for a while?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

First, Jennifer, I think there were a little bit more than breadcrumbs but we appreciate the call out in terms of us trying to be transparent associated with that business. Maybe I'll take a little step back and then John can add colors. But I think we just look at it and say Q4 and FY18, the financial results will clearly stellar. At MAX, as you know, we provided sort of the preliminary targets for FY19, ARR of $1.4 billion, Digital Media revenue growth of 20%. At that point what we had said was that we expect DX revenue growth of 20% and subscription bookings growth of 25%. And as you know, at that point, it did not include Marketo because the deal hadn't closed, but we highlighted two things. We highlighted that it would probably 1-- the earnings would be impacted moving forward as you factor in Marketo and the tax rate would also impact our earnings profile. What we tried to do is update all of that today to both reflect the continued momentum and demonstrate that so from a currency perspective, currency went against us. So since September, despite that we've raised our ARR target from $1.4 billion to $1.45 billion. We've kept the revenue growth for digital media at 20%, despite again as I said foreign exchanges going against us.

In Digital Experience, which is your question as we think about it, the segment revenue target we have raised to 34% year-over-year growth. So clearly we are reflecting the continued momentum that we would expect as a result of getting Marketo. The base is much larger right now. And so, including that base what we said is that we expect to drive 25% subscription bookings growth for this much larger book of business and that's already factored in how we think about the operating expense in terms of what goes for Marketo and actually what goes for the entire DX business. And then what we tried to do is reflect that while we continue to be excited about the potential of earnings, once you factor in the accounting impact of purchase accounting that's approximately $75 million for Magento and Marketo primarily in the first half of the year, that's like a $0.15 impact on non-GAAP earnings. So that's sort of how we think about it. We're certainly investing for growth. You see that as we talk about a 25% growth in the entire subscription bookings growth and we try to reflect what the accounting impacts are as well in that business, which should taper off starting the middle of the year and toward Q3 and Q4. So hopefully that helps set the context of how we move from MAX. And if you think about it from an operational basis, Marketo is actually not dilutive. So what you have to do is factor in what's happening with the accounting for deferred revenue, you have to factor in as you said the financing and what happens in that particular area, as well as, you have to think about what's happening with respect to tax rates.

Jennifer Lowe -- UBS -- Analyst

Great. Thank you.

Operator

Your next question comes from the line of Brent Thill with Jefferies. Your line is open.

Brent Thill -- Jefferies -- Analyst

Good afternoon. On Digital Media ARR, you raised the guidance by 3.5% or $50 million going into '19. I guess can you just outline your confidence to make that big a raise right out of the gate here?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Brent, again, I think it just reflects the momentum that we saw in Q4. I think we outlined a number of different initiatives that we just continue to drive. I mean, we're certainly going to see the benefits of pricing and how we continue to optimize that around the world. It's the new product introductions that are coming and just continued strength in Acrobat and emerging markets. We continue to do a good job combating piracy. We are seeing good strength at what we call named user deployment within the enterprises, I think continued strength in Sign and Stock and what that's doing to the particular business. So just across all of the various priorities that we outline, we just continue to feel good about the opportunity and we have to continue to execute, Brent.

Brent Thill -- Jefferies -- Analyst

Thank you.

Operator

Your next question comes from the line of Kash Rangan with Bank of America. Your line is open.

Kash Rangan -- Bank of America Merrill Lynch -- Analyst

It's nice to hear Brent's voice and go right after Brent. Happy holidays Adobe team. Congratulations from my end. Shantanu, I am curious if -- when you comb (ph) through your natural intelligence and artificial intelligence from Sensei, what is your current read because I think you're one of the very few companies that has reported the Q4 and is giving guidance for Q1, what is your take on the emerging markets especially and some of the volatility we've seen granted that US seems to be a pocket of strength? What is your take on these other questionable economies and your prognostication behind how you'd see those markets play out for Adobe next year? Thank you very much.

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Well, Kash, happy holidays to you as well. I mean, from our perspective I think we're not economists. What we see is that both creativity as important initiative for everybody just continues to be really an area of emphasis and digital transformation and the digital tailwinds or headwinds that enterprises are seeing depending on their perspective. So, I think what gives us confidence is that it doesn't matter which country you're in, digital has become an imperative for enterprises and for individuals, the importance of creativity and design has never been more important. And so we will just continue to monitor it. We see strength across emerging markets as well. We've talked about that. I think the fact that we have a differential pricing scheme that allows us to target customers in those emerging markets might help. But overall, clearly the exposure in that area for us is probably lower than some of the other companies that you're covering.

Mike Saviage -- Vice President of Investor Relations

Next question, please.

Operator

Your next question comes from the line of Jay Vleeschhouwer with Griffin Securities. Your line is open.

Jay Vleeschhouwer -- Griffin Securities -- Analyst

Thank you. Good evening. Shantanu, I'd like to follow up on two broad statements Adobe made about its business. One at MAX and one at Summit. At MAX, the Company said that Creative Cloud at least is at an inflection point in terms of moving from the desktop largely to more of a multi surface device TAM. And at Summit, you noted that your objective in Digital Experience is to enable or establish what you call that experience system of record. On the former, could you talk about how you're thinking about your correlation of Creative Cloud new business to new hardware business as compared to the old days of packaged software in terms of the correlation to hardware sales? And then for the latter, do you think you've established now the experienced system of record, you are de facto, you've done that or do you think that's still aspirational?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Well, Jay, first as it relates to our belief and assertions around multi-surface, it stems from a very simple observation that we want to enable our products to be used wherever inspiration strikes. And second I think to your question, the capabilities of these new devices, whether they be tablets or whether they be mobile devices are infinitely more powerful than the prior generation. And so whenever there is a step function and capability or there is a new modality like voice or touch or other interfaces that emerge, all of them represent opportunities for Adobe. We pioneered our own offering in that particular space with Lightroom and we're seeing good results with Lightroom, which is clearly a space where people want to be able to manage their pictures on any device that they want.

The second category in which we have shown a lot of capability in this particular space is with XD, where again the number of people who design products and the number of people -- stakeholders in that entire design workflow is probably significantly larger than those who design. So those were the two first flagship products that showed it. But I think at MAX, we clearly announced that not only would we be bringing our flagship products like Photoshop to the iPad, but in addition to that we would be doing brand new products that took advantage of this media like Project Gemini where people would use a stylus and a tablet to draw. So, we're well on our way on that journey. We're really excited about what we can do. We also showed as you know, voice-enabled applications in XD, that integrated with echo. So if you start to think about a world, where every single screen you're going to be able to talk to that screen, we want to enable people to use our apps to create applications for that screen. So that's on the MAX front, excited about it, but we're early in the journey and we think there's a lot more that we can do that will enable people to tell their story with these.

On the Digital Experience side with the enterprise system of record, I think the ODI announcement that we made in conjunction with SAP and Microsoft, was the next step in that particular journey where all three companies have talked about the need to have this unified customer profile, where in real time you can action it and you can integrate that with support systems, supply chain systems, financial systems and certainly the marketing systems, which is what we are pioneering. We made some good progress in that. The interest honestly in that is pretty high because every CIO is worried about how do I get this unified customer profile. So again, I would say that's a multi-year journey for us to deliver value. Our Experience platform is already been delivered to customers. They're giving us feedback in real time. Our applications, much like we did with the creative suite of products, will all build on top of the score content and data platform. So, that's what we do Jay, I mean we are excited about the product journey and building deep technology modes. And so I would say off to a great start but there is so much more that we can do in terms of delivering value to our customers and further strengthening our differentiation against the competition.

Jay Vleeschhouwer -- Griffin Securities -- Analyst

Okay. Thanks, Shantanu.

Operator

Your next question comes from the line of Heather Bellini with Goldman Sachs. Your line is open.

Heather Bellini -- Goldman Sachs -- Analyst

Great, thank you. I mean, Shantanu I had actually two questions. You -- I think just to follow up on something that Kash asked. I was wondering given digital transformation is a top area of focus for CEOs I'm trying to get a sense for how resilient do you think this spending could be if the macro environment were to become more challenging? And then I had a follow-up on piracy?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Yeah. Heather, my belief is that, the customers, there is no way that customer expectations are going to change in terms of how they transact businesses with enterprise. And as you know when -- if economic climate changes, there is even more reason to prioritize on the first few imperatives that are essential. And so, if you just look at what's happening with mobile devices as the only form of interaction with enterprises, we just continue to think that digital will be very important and very central to the C-level mandate. So that gives us confidence that we need to continue to drive it. I mean, we will certainly monitor what happens if there is, but you don't want this to become a self-fulfilling prophecy where everybody says, hey, what do we do if there is a slowdown and then people cut spending. We haven't seen that so far. So that's how I would describe this as a priority and we help with the top line driving revenue for customers. And so, I think that's the important part of our mandate and offering.

Heather Bellini -- Goldman Sachs -- Analyst

Right. So for the CEOs you talked to or the CMOs, it's much more than about the fear of not spending because of their competitors spend and they're are falling further behind, is that kind of a way to think about it?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

That's exactly the way to think about it and it's also the way every one of them knows that if they're not using digital as an enabler, there's some small company out there that's going to completely disrupt their business using a mobile app and a digital -- and digital technology. So the heightened importance of digital, I think, is their front and center for every enterprise.

Heather Bellini -- Goldman Sachs -- Analyst

Great. And then just the last one would just be a follow-up on your comments on piracy and you've mentioned some good success that you're having there, is there a way to help us think about the tailwinds that this could add to your creative business?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Well, I think, we've seen that, Heather, right through our journey, the affordability of Creative Cloud from day one has been one of the drivers of the new growth, a new customer acquisition that we've highlighted every year, including at MAX. And so, I think that continues to give us confidence, I think the pricing upfront, which allows more people to enter the platform. I think that's another way in which we are combating piracy. And, third is, the fact that we don't have boxes, they used to be a real grey market associated with selling our boxes, that's also gone away. That's not to say that people aren't finding ways to somehow get their hands on Creative Cloud and our brand continues to be strong even in areas where there are malicious users of our product, but we've -- we made significant traction and we continue to focus on driving value through services. And I would say a step function for us as all of these assets are in the cloud, then they become DOA unless you're a legitimate user of Adobe products.

Heather Bellini -- Goldman Sachs -- Analyst

Well, great. Thank you so much, and happy holidays.

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Thanks, Heather. Happy holidays.

Operator

Your next question comes from the line of Keith Weiss with Morgan Stanley. Your line is open.

Keith Weiss -- Morgan Stanley -- Analyst

Excellent. Thank you, guys. Nice quarter, and thanks for taking the question. Maybe one for John, so he doesn't feel completely left out on this call. If we strip out the acquired assets, Marketo in particular, how are you thinking about sort of operating leverage within sort of the core Adobe businesses into FY19? Do you think this is another year where you can see the nice expansion that you have been seeing in the underlying operating margins, or is there like a broader investment in that core going on through FY19 as well?

John Murphy -- Executive Vice President and Chief Financial Officer

Thanks very much, Keith. I think when you think about our core business, we have that operating leverage as we've shared throughout FY18 before the acquisitions and what we tried to articulate in the prepared remarks was that, because the accounting implications coming with the acquisitions for purchase accounting you have this first -- really the kind of the first half -- first half to third quarter impact of deferred revenue, for instance, on the operating side. And as that tapers off during the year, we believe the leverage in our model continues to return to growth in terms of operating margins. And so, we see that expanding as we exit the year into the familiar territory that I think you've seen before.

Keith Weiss -- Morgan Stanley -- Analyst

Got it. That's all.

Operator

Your next question comes from the line of Mark Moerdler with Bernstein. Your line is open.

Mark Moerdler -- Bernstein -- Analyst

Thank you very much. And, again, another congratulations from us. Can you give us a sense of where you are in the journey of Acrobat's subscription? And how to think about the negative impact as it move to perpetual license to subscription on the Document Cloud revenue growth?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Well, Mark, as you know, we have actually used a different strategy for Acrobat than we used for Creative Cloud, because in that particular business perpetual just continues to be an important area of both new customer acquisition for us as well as I think we've done a good job of bridging. And so, you've clearly seen -- now the business continues to do well, we talked about the unit growth that we're seeing in Acrobat, and so we don't particularly see a headwind as it relates to perpetual moving to subscriptions the way we saw in the creative, we just want to continue to focus on driving more unit growth, and that's really our focus. What is still a big opportunity, however, which maybe the other part of your question is that there's a larger and larger installed base that as we add more value in the services and apply our AI services that will continue to be a forward-looking opportunity for us with Document. So, I think, that's all factored and tailored in the targets that we provided for next year.

Mark Moerdler -- Bernstein -- Analyst

Excellent. I really appreciate. Congrats.

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Thanks, Mark.

Operator

Your next question comes from the line of Sterling Auty with JPMorgan. Your line is open.

Sterling Auty -- JPMorgan -- Analyst

Yes, thanks. Hi, guys. So trade negotiations with China are dominating the headlines. If we actually see an agreement that brings true IP protection and a real open market in China, how big that market be for Adobe? What could that do to your revenue and revenue growth going forward?

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Well, Sterling, one way you can look at it is, you can say what is the number of PCs and mobile devices that are used in China, and how does that compared to what's being used in the US and if you look at what our revenues in the US. I mean that would, I think, at the high-end, show the potential of what that could be, because creativity is just as important in China and you could actually argue we're one of the few companies, US technology companies, that really doesn't have an alternative in China. So, we feel good about it. But even if those trade agreements that you allude to happen, I think it would take a little while for that to completely translate into our business.

So, having said that, the China business for us has been doing well. As you know, we introduced CC, we focused on the team offering because we thought that would be the right beachhead for us to focus on, and the other area that we focus on is companies doing business in China, how do we make sure that they have a site license, so to speak, or enterprise license agreement that allows us to do it. So from a purely mathematical and installed base perspective, it's massive. How that translates? We haven't clearly baked any of that, sort of, inflection point or dramatic shift into our numbers.

Sterling Auty -- JPMorgan -- Analyst

Got it. Thank you.

Mike Saviage -- Vice President of Investor Relations

Operator, we're coming up in the top of the hour here, why don't we take two more questions, please?

Operator

Certainly. Your next question comes from the line of Brent Bracelin with KeyBanc Capital Markets. Your line is open.

Brent Bracelin -- KeyBanc Capital Markets -- Analyst

Thanks. I have wanted to follow up on the operating margin question that Keith kind of went down and taking a little bit of a different tack here. A full-year operating margins have risen by more than 200 basis points, I think, for five consecutive years, you're now above 40%, phenomenal kind of progress here, highest in over 10 years. My question is, going forward, I get the first half accounting impact, but as you think about the opportunity in the $70 billion Experience Cloud, do you plan to invest incremental dollars to accelerate the share in the Experience Cloud or do you think you can actually drive margins well above 40% on a blended basis?

John Murphy -- Executive Vice President and Chief Financial Officer

Great. Thanks very much, Brent. I think when you look at the Digital Experience business, we've always long believed that that business can actually have margins typical of a SaaS business. We continue to invest in the digital experience, of course obviously recently with the two acquisitions, and so our goal there is to help them integrate and make sure that they can accelerate our growth in that space. The market is huge. So as we continue to invest in that market, certainly you want to see operating leverage in it and they will be healthy for the business overall. If we look at top line growth, if we look at -- bottomline growth really is what we're trying to drive. And so our long-term model has always been to grow our earnings as fast as our top line or faster. So once we kind of get past this noise of accounting through the year, more so in the first half and it trails off in the third and fourth quarter you'll see the operating margin for the total Company kind of return to the historical levels.

Brent Bracelin -- KeyBanc Capital Markets -- Analyst

Thank you.

Operator

And your last question comes from the line of Tom Roderick with Stifel. Your line is open.

Tom Roderick -- Stifel -- Analyst

Hi. Thank you. So the Company took some pricing up here last March in Creative Cloud I guess just in North America. But would love it if you could provide just a little bit of feedback as to how the price pumps that were put in place have been received by both new and installed customers. And can you add any color there as to whether you've seen any changes to the net dollar retention stemming from the price pumps? Just overall some color on how those have gone would be great. Thank you.

Shantanu Narayen -- Chairman, President and Chief Executive Officer

Sure. I think it's gone completely in line with our expectations. I mean we have just a significant amount of experience with that. As you know, we look at FX in other countries as well to also look at pricing. So, it's not the first time that we have made changes to Creative Cloud pricing since the time it was introduced. From our perspective, it was on the heels of a MAX where we introduced five new products, which was sort of more significant innovation after the original introduction. We continue to be focused on a lot more innovation driving value for our customers. And I think you'll continue to see it, but North America went very much in line with our expectations. And as we said, our goal is to continue to drive new customers to the platform that remains front and center but nothing that I would say stood out in our experience, and I think that's just because of the diligence that we did, which is we're thoughtful about it. We want to continue to attract customers to the platform with promotional pricing and deliver them the value which enables us to give more credence to whatever pricing changes we might do.

But since the last question, I'll also start off by wishing everybody on the call happy holidays. Thank you all for joining us. We're certainly thrilled with Q4 and FY18. I think we had a very, very strong year. And I think it's a clear indication that our strategy of empowering people to create and helping businesses transform is working. We think it represents as we have said at our MAX financial analyst meeting a massive addressable market opportunity. And the FY 19 financial targets reflect the momentum that we expect to continue to drive across all offerings and geographies. And we're excited about the product innovation roadmap that we have, for all of our customers and again wanted to thank you all for joining us today.

Mike Saviage -- Vice President of Investor Relations

And this concludes our call. Thanks everyone.

Operator

This concludes today's conference call. You may now disconnect.

Duration: 63 minutes

Call participants:

Mike Saviage -- Vice President of Investor Relations

Shantanu Narayen -- Chairman, President and Chief Executive Officer

John Murphy -- Executive Vice President and Chief Financial Officer

Walter Pritchard -- Citigroup -- Analyst

Saket Kalia -- Barclays Capital -- Analyst

Brad Zelnick -- Credit Suisse -- Analyst

Taylor Reiners -- Piper Jaffray -- Analyst

Kirk Materne -- Evercore ISI -- Analyst

Jennifer Lowe -- UBS -- Analyst

Brent Thill -- Jefferies -- Analyst

Kash Rangan -- Bank of America Merrill Lynch -- Analyst

Jay Vleeschhouwer -- Griffin Securities -- Analyst

Heather Bellini -- Goldman Sachs -- Analyst

Keith Weiss -- Morgan Stanley -- Analyst

Mark Moerdler -- Bernstein -- Analyst

Sterling Auty -- JPMorgan -- Analyst

Brent Bracelin -- KeyBanc Capital Markets -- Analyst

Tom Roderick -- Stifel -- Analyst

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