Adobe CEO Shantanu Narayen has announced that he will step down once a successor is appointed, stay on as chair, and shares fell seven per cent in after-hours trading.
Narayen joined Adobe in 1988 as a vice president and general manager and became chief executive in 2007. He pushed the business from licences to subscriptions via Creative Cloud and is now chasing growth through generative artificial intelligence, minus that blocked Figma deal and its $1 billion break-up fee.
Adobe’s lead independent director, Frank Calderoni, said, “On behalf of the Board, I want to recognise Shantanu’s contributions as CEO and architect of Adobe’s transformation over the past 18 years, and for positioning Adobe for success in the AI-driven era.”
“As we take the next step in succession planning, we are focused on selecting the right leader for this next exciting chapter of the company’s growth and are grateful for Shantanu’s continued leadership as CEO to ensure a smooth transition.”
Narayen, 62, is Pfizer’s lead independent director in addition to his duties at Adobe, and he pulled in $51 million in total compensation for fiscal 2025. FactSet puts his Adobe stake at $118 million, which makes “smooth transition” sound even smoother.
Adobe CEO Shantanu Narayen wrote: “What attracted me to Adobe 28 years ago was our leadership in creating new market categories, world-class products, a relentless desire to innovate in every functional area of the company and the people I met during the interview process.”
“We have continued to create new markets, deliver world-class products, drive innovation in everything we do and attract and retain the best and brightest employees.”
On his watch, Adobe stock rose more than sixfold, while the S&P 500 climbed about 350 per cent in the same stretch. Investors have still been battering the shares lately thanks mostly to AI killing off the creativity industry.
The company paired the leadership news with strong numbers and upbeat guidance. Adjusted earnings per share came in at $6.06 versus $5.87 expected, and revenue came in at $6.40 billion versus $6.28 billion, based on LSEG consensus.
Revenue grew about 12 per cent year on year in the fiscal first quarter, which ended on 27 February, while net income rose to $1.89 billion or $4.60 per share from $1.81 billion or $4.14. Adobe said annualised revenue from AI-first products more than tripled, and “That should be our next billion-dollar business,” Narayen said.
For the fiscal second quarter, Adobe guided to adjusted earnings per share of $5.80 to $5.85 on revenue of $6.43 billion to $6.48 billion. Analysts were looking for $5.68 per share on $6.42 billion in revenue.
Adobe shares are down nearly 23 per cent so far in 2026, while the S&P 500 is down about three per cent in the same period. The stock is more than 60 per cent off its 2021 record after dropping more than 20 per cent in each of the past two years.
Subscription revenue for creative and marketing professionals reached $4.39 billion, up 12 per cent and above StreetAccount’s $4.31 billion consensus. Narayen said Adobe had 850 million monthly users across Acrobat, Creative Cloud, Express and Firefly, up 17 per cent, calling the uptake “a clear indication that we have both strong usage and a foundation for monetisation”.
The Adobe Stock service, which management described as a book of business of around $450 billion, fell harder than expected.
Adobe President of Creativity and Productivity, David Wadhwani, said: “This shift is playing out more quickly than we had planned for, and our focus remains on giving customers meaningful choice between Stock and generative AI as they build their creative and marketing workflows.”
