Adobe stated CEO Shantanu Narayen will step down after a successor has been appointed, and he’ll stay because the design software program firm’s chair. Shares tumbled 7% in prolonged buying and selling.
Narayen joined Adobe in 1988 as a vp and common supervisor, and he turned CEO in 2007. Below Narayen, Adobe pushed from software program licenses to subscriptions to its Inventive Cloud software bundle, and the corporate is now working to increase by means of generative synthetic intelligence. He sought to amass fast-growing design software program firm Figma, however regulators pushed again, and the businesses called off the deal, leading to Adobe paying Figma a $1 billion breakup price.
“On behalf of the Board, I need to acknowledge Shantanu’s contributions as CEO and architect of Adobe’s transformation over the previous 18 years, and for positioning Adobe for fulfillment within the AI-driven period,” Frank Calderoni, Adobe’s lead impartial director, was quoted as saying in a statement. “As we take the subsequent step in succession planning, we’re centered on choosing the best chief for this subsequent thrilling chapter of the corporate’s development and are grateful for Shantanu’s continued management as CEO to make sure a easy transition.”
Narayen, 62, is lead impartial director of Pfizer along with his obligations at Adobe, the place he obtained $51 million in complete compensation for the 2025 fiscal yr, in response to a filing. He owns $118 million in Adobe shares, in response to FactSet.
In a memo to staff, Narayen wrote that he is staying on the board to assist the subsequent Adobe CEO, simply as co-founders John Warnock and Charles “Chuck” Geschke did when he turned chief.
“What attracted me to Adobe 28 years in the past was our management in creating new market classes, world-class merchandise, a relentless want to innovate in each useful space of the corporate and the folks I met throughout the interview course of,” Narayen wrote. “Now we have continued to create new markets, ship world-class merchandise, drive innovation in all the pieces we do and appeal to and retain the perfect and brightest staff.”
On Narayen’s watch, Adobe’s inventory jumped greater than sixfold, whereas the S&P 500 is up about 350% over that stretch.
“Shantanu is a frontrunner I’ve come to know and respect deeply,” Dylan Subject, Figma’s co-founder and CEO, wrote in an X post. “He is considerate, variety and relentless in pursuit of Adobe’s imaginative and prescient. Grateful for the time we spent collectively and wishing him all the perfect within the years forward!”
Satya Nadella, CEO of Adobe associate Microsoft, congratulated Narayen.
“You have constructed one of the vital necessary software program firms on the planet, and expanded what’s potential for creators, entrepreneurs, and types in all places,” Nadella wrote on X. “What has all the time stood out to me is the empathy you have dropped at the artistic course of and the instance you have set as a frontrunner.”
Along with making the management announcement, Adobe reported sturdy outcomes and steering.
Here is how the corporate did as compared with LSEG consensus:
- Earnings per share: $6.06 adjusted vs. $5.87 anticipated
- Income: $6.40 billion vs. $6.28 billion anticipated
Adobe’s income grew about 12% yr over yr within the fiscal first quarter, which ended on Feb. 27, in response to a statement. Internet revenue of $1.89 billion, or $4.60 per share, elevated from $1.81 billion, or $4.14 a share, in the identical quarter a yr in the past. Adjusted revenue excludes stock-based and deferred compensation expense.
Annualized income from AI-first merchandise greater than tripled, the corporate stated.
With respect to steering, Adobe referred to as for $5.80 to $5.85 in fiscal second-quarter adjusted earnings per share on $6.43 billion to $6.48 billion billion in income. Analysts polled by LSEG have been on the lookout for $5.68 per share and $6.42 billion in income.
Buyers have been punishing software stocks due to considerations about disruption from generative AI fashions. Adobe shares have been down practically 23% to date in 2026 as of Thursday’s shut, whereas the S&P 500 index was down about 3% in the identical interval. The inventory is greater than 60% off its file from 2021 after dropping greater than 20% in every of the previous two years.
Income from subscriptions for artistic and advertising professionals totaled $4.39 billion, up 12% and above the $4.31 billion consensus amongst analysts polled by StreetAccount.
Through the quarter, Adobe introduced the provision of Acrobat, Specific and Photoshop apps for OpenAI’s ChatGPT assistant, together with an expanded partnership with promoting firm WPP.
Adobe had 850 million month-to-month customers throughout Acrobat, Inventive Cloud, Specific and Firefly throughout the fiscal first quarter, up 17%, Narayen stated on a convention name with analysts. The adoption is “a transparent indication that we’ve got each sturdy utilization and a basis for monetization,” he stated.
— CNBC’s Ari Levy contributed to this report.
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