Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Brent Thill – Citigroup.
Brent Thill - Citigroup
Can you comment about the trade-off and the cost cuts to preserve operating margins versus investing for the recovery and if you could just bring us back to the 2001/2002 time frame to where you saw the margins drop about 500 basis points, how do you compare/contrast this cycle versus when you saw that last downturn?
Shantanu Narayen
As you saw in Q1 when we saw that there was going to be some impact to our revenue we very proactively managed our expenses, but we are very careful, even in this environment, to make sure that we don’t do anything that is going to impact our long-term strategic business when the recovery happens.
And the way we looked at it was really focusing on what we considered a number of discretionary expenses. In particular, as we look at what happened in Q1, we were able to look at discretionary expenses such as travel. We did look at variable marketing and we are very judicious about where we are hiring back in terms of new headcount growth that happens.
We have also realigned, actually, the company internally against the strategic priorities that I outlined, so when we looked at the Flash platform we were able to combine our mobile and platform business units to make sure that we were able to deliver one version of Flash across multiple screens.
We were able to reduce some of our consulting headcount because now we, frankly, have a very vibrant systems integrator channel that is enabling us to go ahead and implement our life cycle business.
So we don’t think we have done anything that is going to impact our long-term strategic directions for the company, but we will continue to be ruthless about looking at every expense that we have to make sure that we balance the long-term strategic direction with short-term profitability.
Operator
Your next question comes from Heather Bellini – UBS.
Heather Bellini - UBS
My question is this. Mark, you made a comment about seasonality for next quarter and I believe you commented that we should expect normal seasonality in Europe and in Asia. You didn’t comment on the U.S. I’m wondering, since we’re all trying to model out going forward, I know you don’t want to give guidance, but if we look back in the third quarter of 2008 you were flat sequentially in revenues, the third quarter of 2007 you were plus 14%. Obviously that had CS3. Third quarter of 2006 you were down 5%. So there’s a wide variety there.
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