Adobe said CEO Shantanu Narayen will step down after a successor has been appointed, and he will remain as the design software company’s chair. Shares tumbled 7% in extended trading.
Narayen joined Adobe in 1998 as a vice president and general manager, and he became CEO in 2007. Under Narayen, Adobe pushed from software licenses to subscriptions to its Creative Cloud application bundle, and the company is now working to expand through generative artificial intelligence. He sought to acquire fast-growing design software company Figma, but regulators pushed back, and the companies called off the deal, resulting in Adobe paying Figma a $1 billion breakup fee.
“On behalf of the Board, I want to recognize 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,” Frank Calderoni, Adobe’s lead independent director, was quoted as saying in a statement. “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 lead independent director of Pfizer in addition to his responsibilities at Adobe, where he received $51 million in total compensation for the 2025 fiscal year, according to a filing. He owns $118 million in Adobe shares, according to FactSet.
In a memo to employees, Narayen wrote that he’s staying on the board to support the next Adobe CEO, just as co-founders John Warnock and Charles “Chuck” Geschke did when he became chief.
“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,” Narayen wrote. “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 Narayen’s watch, Adobe’s stock jumped more than sixfold, while the S&P 500 is up about 350% over that stretch.
“Shantanu is a leader I’ve come to know and respect deeply,” Dylan Field, Figma’s co-founder and CEO, wrote in an X post. “He’s thoughtful, kind and relentless in pursuit of Adobe’s vision. Grateful for the time we spent together and wishing him all the best in the years ahead!”
Satya Nadella, CEO of Adobe partner Microsoft, congratulated Narayen.
“You’ve built one of the most important software companies in the world, and expanded what’s possible for creators, entrepreneurs, and brands everywhere,” Nadella wrote on X. “What has always stood out to me is the empathy you’ve brought to the creative process and the example you’ve set as a leader.”
In addition to making the leadership announcement, Adobe reported strong quarterly results and guidance.
Here’s how the company did in comparison with LSEG consensus:
- Earnings per share: $6.06 adjusted vs. $5.87 expected
- Revenue: $6.40 billion vs. $6.28 billion expected
Adobe’s revenue grew about 12% year over year in the fiscal first quarter, which ended on Feb. 27, according to a statement. Net income of $1.89 billion, or $4.60 per share, increased from $1.81 billion, or $4.14 a share, in the same quarter a year ago. Adjusted income excludes stock-based and deferred compensation expense.
Annualized revenue from AI-first products more than tripled, the company said.
“That should be our next billion dollar business,” Narayen said on a conference call with analysts
Adobe called for $5.80 to $5.85 in fiscal second-quarter adjusted earnings per share on $6.43 billion to $6.48 billion in revenue. Analysts polled by LSEG were looking for $5.68 per share and $6.42 billion in revenue.
Investors have been punishing software stocks because of concerns about disruption from generative AI models. Adobe shares are down nearly 23% so far in 2026 as of Thursday’s close, while the S&P 500 index is down about 3% in the same period.
Adobe’s stock is more than 60% off its record from 2021 after dropping more than 20% in each of the past two years.
Revenue from subscriptions for creative and marketing professionals totaled $4.39 billion, up 12% and above the $4.31 billion consensus among analysts polled by StreetAccount.
During the quarter, Adobe announced the availability of Acrobat, Express and Photoshop apps for OpenAI’s ChatGPT assistant, along with an expanded partnership with advertising company WPP.
Adobe had 850 million monthly users across Acrobat, Creative Cloud, Express and Firefly during the fiscal first quarter, up 17%, Narayen said. The adoption is “a clear indication that we have both strong usage and a foundation for monetization,” he said.
The Adobe Stock service that offers stock photos and other media, representing a book of business of around $450 billion, declined more sharply than management had predicted during the quarter.
“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,” David Wadhwani, president of Adobe’s creativity and productivity business, said on the call.
Adobe’s CEO search should take a few months, Narayen said.
— CNBC’s Ari Levy contributed to this report.
Correction: A prior version of this story had an incorrect date for the start of Narayen’s Adobe tenure
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