Dan Durn
Chief Financial Officer and Executive Vice President, Finance, Technology Services and Operations at Adobe
Thanks, Anil. Our earnings report today covers both Q4 and fiscal year 2022 results. As you know, in 2022, we experienced significant headwinds from the strengthening of the U.S. dollar, increased tax rates and the impacts from the Russia-Ukraine war. Despite those headwinds, in fiscal '22, Adobe achieved record revenue of $17.61 billion, which represents 12% year-over-year growth, or 15% growth in constant currency on an adjusted basis. GAAP EPS for the year was $10.10, and non-GAAP EPS was $13.71. We exceeded our initial non-GAAP EPS target for fiscal year '22, which speaks to the discipline, strong execution and resilient operating model of the Company.
Fiscal year '22 business and financial highlights included: Digital Media revenue of $12.84 billion; net new Digital Media ARR of $1.91 billion; Digital Experience revenue of $4.42 billion; cash flows from operations of $7.84 billion; RPO of $15.19 billion exiting the year; and repurchasing approximately 15.7 million shares of our stock during the year at a cost of $6.30 billion.
In the fourth quarter of fiscal year '22, Adobe achieved revenue of $4.53 billion, which represents 10% year-over-year growth, or 14% in constant currency. GAAP diluted earnings per share in Q4 was $2.53 and non-GAAP diluted earnings per share was a record $3.60.
Q4 business and financial highlights included: Digital Media revenue of $3.30 billion; record net new Digital Media ARR of $576 million; Digital Experience revenue of $1.15 billion; record cash flows from operations of $2.33 billion; adding over $1 billion to RPO sequentially in the quarter; and repurchasing approximately 5 million shares of our stock.
In our Digital Media segment, we achieved Q4 revenue of $3.30 billion, which represents 10% year-over-year growth, or 14% in constant currency. We exited the quarter with $13.97 billion of Digital Media ARR. We achieved Creative revenue of $2.68 billion, which represents 8% year-over-year growth, or 13% in constant currency, and we added $453 million of net new Creative ARR in the quarter. Driving this performance was good linearity throughout the quarter, as well as strong customer purchasing during the peak holiday shopping weeks.
Fourth quarter Creative growth drivers included: new user growth, fueled by customer demand, targeted campaigns and promotions, and year-end seasonal strength, which drove strong web traffic and conversion rates in the quarter; adoption of our Creative Cloud All Apps offerings across customer segments, from enterprise, to Team, to individual and education; strength of the new Acrobat within our Creative Cloud offering, demonstrating the importance of digital documents and workflows to the Creative community; sales of individual applications, including a strong quarter for our imaging and photography offerings; continued growth of newer businesses, including Express, Substance, Frame and Stock; and a solid finish to the year in SMB and enterprise.
Adobe achieved Document Cloud revenue of $619 million, which represents 16% year-over-year growth, or 19% in constant currency. We added $123 million of net new Document Cloud ARR in the quarter. Fourth quarter Document Cloud growth drivers included: Acrobat subscription demand across all customer segments; continued growth of Acrobat web, fueled by online searches for PDF and product-led growth; strong performance of our new Acrobat offering integrated with Sign, driving upsell ARR, as well as new customer adoption; and year-end seasonal strength in SMB, including through our reseller channel.
Turning to our Digital Experience segment. In Q4, we achieved revenue of $1.15 billion and subscription revenue of $1.01 billion, both of which represent 14% year-over-year growth, or 16% in constant currency. Fourth quarter Digital Experience growth drivers included: expected year-end strength, with significant bookings of our newer offerings in EMEA that builds on our momentum in North America; success closing numerous transformational deals that span our portfolio of solutions; momentum with our Adobe Experience Platform and native applications, including Real-Time CDP; strength with our Content and Workfront solutions, which are integral components of our content supply chain strategy; and increased customer demand for professional services, as enterprises focus on implementation and accelerating time to value realization from digital investments.
In Q4, we focused on making disciplined investments to drive growth and awareness of our products. We continue to have world-class gross and operating margins and drove strong EPS performance in the quarter. Adobe's effective tax rate in Q4 was 22.5% on a GAAP basis and 17.5% on a non-GAAP basis. The GAAP tax rate came in lower-than-expected primarily due to lower-than-projected tax on our foreign earnings. RPO exiting the quarter was $15.19 billion, growing 9% year-over-year, or 12% when factoring in a 3 percentage point FX headwind.
Our ending cash and short-term investment position exiting Q4 was $6.10 billion, and cash flows from operations in the quarter were a record $2.33 billion, up 14% year-over-year. We now intend to use cash on hand to repay the current portion of our debt on or before the due date, which we expect will reduce our interest expense in fiscal year '23. In Q4, we entered into a $1.75 billion share repurchase agreement, and we currently have $6.55 billion remaining of our $15 billion authorization granted in December 2020 which goes through 2024.
As a reminder, we measure ARR on a constant currency basis during a fiscal year and revalue ARR at year-end for current currency rates. FX rate changes between December of 2021 and this year have resulted in a $712 million decrease to the Digital Media ARR balance entering fiscal year '23, which is now $13.26 billion after the revaluation. This is reflected in our updated investor data sheet, and ARR results will be measured against this amount during fiscal year '23.
We provided preliminary fiscal year '23 targets at our Financial Analyst Meeting in October that take into account the macroeconomic environment and the growth drivers for our various businesses. While there is ongoing macro uncertainty, given the massive long-term opportunity in digital and the momentum in our business, we are pleased to reiterate those financial targets. In summary, for fiscal year '23 we are targeting: total Adobe revenue of $19.1 billion to $19.3 billion; Digital Media net new ARR of approximately $1.65 billion; Digital Media segment revenue of $13.9 billion to $14.0 billion; Digital Experience segment revenue of $4.925 billion to $5.025 billion; Digital Experience subscription revenue of $4.375 billion to $4.425 billion; tax rate of approximately 22% on a GAAP basis and 18.5% on a non-GAAP basis; GAAP earnings per share of $10.75 to $11.05; and non-GAAP earnings per share of $15.15 to $15.45. As a reminder, these targets do not contemplate our planned acquisition of Figma.
We expect normal seasonality throughout the year, with Q1 being sequentially down and seasonally light for new business, sequential growth from Q1 to Q2, a dip in Q3 on account of summer seasonality, and a strong finish to the year in Q4.
For Q1 fiscal year '23 we are targeting: total Adobe revenue of $4.60 billion to $4.64 billion; Digital Media net new ARR of approximately $375 million; Digital Media segment revenue of $3.35 billion to $3.375 billion; Digital Experience segment revenue of $1.16 billion to $1.18 billion; Digital Experience subscription revenue of $1.025 billion to $1.045 billion; tax rate of approximately 22% on a GAAP basis and 18.5% on a non-GAAP basis; GAAP earnings per share of $2.60 to $2.65; and non-GAAP earnings per share of $3.65 to $3.70.
In summary, Adobe finished FY '22 strong, executing on our strategies across Creative Cloud, Document Cloud and Experience Cloud. I expect this performance to carry into next year, as Adobe's sustained top line growth and world-class profitability continue to position us well for fiscal '23 and beyond.
Shantanu, back to you.