adobe CEO Shantanu Narayan will step down after a successor is appointed and said he will remain chairman of the design software company. Shares fell 7% in extended trading.
Mr. Narayan joined Adobe in 1988 as vice president and general manager and became CEO in 2007. Under Narayan, Adobe has moved from software licensing to subscriptions for Creative Cloud application bundles and is currently expanding with generative artificial intelligence. He tried to buy a fast-growing design software company figmaBut regulators pushed back, and the two companies ended the deal, resulting in Adobe paying Figma a $1 billion penalty.
“On behalf of the board, I would like to commend Mr. Shantanu for his contributions as CEO and architect of Adobe’s transformation over the past 18 years, and in positioning Adobe for success in an AI-driven era,” Frank Calderoni, Adobe’s lead independent director, said in a statement. “As we take the next step in our succession plan, we are focused on selecting the right leader for the next exciting chapter of the company’s growth, and we appreciate Mr. Shantanu’s continued leadership as CEO to ensure a smooth transition.”
Mr. Narayan, 62, is the company’s lead independent director. pfizer In addition to his duties at Adobe, he received total compensation of $51 million in fiscal year 2025, according to the filing. He owns $118 million in Adobe stock, according to FactSet.
In a memo to employees, Narayan wrote that he will remain on Adobe’s board to support Adobe’s next CEO, just as he did when co-founders John Warnock and Charles “Chuck” Geschke became CEOs.
“What drew me to Adobe 28 years ago was its leadership in creating new market categories, world-class products, its constant desire to innovate in all functional areas of the company, and the people I met during the interview process,” Narayan wrote. “We continue to create new markets, deliver world-class products, drive innovation in everything we do, and attract and retain the best and brightest employees.”
On Narayen’s watch, Adobe’s stock price has soared more than sixfold, and the S&P 500 index has risen about 350% in that time.
“Shantanu is a leader I know well and deeply respect,” Dylan Field, co-founder and CEO of Figma, wrote in an X post. “He is thoughtful, kind, and relentless in pursuing Adobe’s vision. I am grateful for the time we spent together and wish him the best in the years to come.”
Satya Nadella, Adobe Partner CEO microsoftblessed Narayan.
“You built one of the most important software companies in the world, expanding the possibilities for creators, entrepreneurs, and brands around the world. What has always impressed me is the empathy you brought to the creative process and the example you set as a leader,” Nadella wrote to X.
In addition to management’s announcement, Adobe reported strong quarterly results and guidance.
Here’s how the company performed compared to the LSEG consensus:
Earnings per share: $6.06 adjusted vs. $5.87 expected Revenue: $6.4 billion vs. $6.28 billion expected
Adobe’s revenue for the fiscal first quarter ended Feb. 27 was up about 12% from the same period last year, according to a statement. Net income was $1.89 billion, or $4.60 per share, up from $1.81 billion, or $4.14 per share, in the year-ago period. Adjusted earnings exclude stock-based and deferred compensation expense.
The company says its annual revenue from AI-first products has more than tripled.
“This should be our next billion-dollar business,” Narayen said on a conference call with analysts.
Adobe expected adjusted earnings per share for the fiscal second quarter to be in the range of $5.80 to $5.85 on revenue of $6.43 billion to $6.48 billion. Analysts polled by LSEG had expected earnings of $5.68 per share and revenue of $6.42 billion.
Investors are taking a tough stance on software stocks due to concerns about disruption from generative AI models. Adobe stock is down nearly 23% so far in 2026 as of Thursday’s close, while the S&P 500 index is down about 3% over the same period.
Adobe stock has fallen more than 20% in each of the past two years, but starting in 2021 it is more than 60% below its all-time high.
Subscription revenue for creative and marketing professionals totaled $4.39 billion, an increase of 12% and above the $4.31 billion consensus of analysts surveyed by StreetAccount.
During the quarter, Adobe announced an expanded partnership with advertising company WPP, as well as the availability of Acrobat, Express, and Photoshop apps for OpenAI’s ChatGPT assistant.
Narayan said Adobe had 850 million monthly users across Acrobat, Creative Cloud, Express and Firefly in the first quarter, an increase of 17%. The implementation “clearly demonstrates that we have strong usage and monetization fundamentals,” he said.
Adobe Stock services, which provide stock photos and other media, represent approximately $450 billion of business and declined significantly more than management expected during the quarter.
“This change is happening faster than we had planned, and we remain focused on giving our customers meaningful choices between Stock and generative AI as they build their creative and marketing workflows,” David Wadhwani, president of Adobe’s Creativity and Productivity business, said on the conference call.
Narayan said the search for Adobe’s CEO will take several months.
—CNBC’s Ari Levy contributed to this report.
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