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 basic supervisor, and he grew to become CEO in 2007. Underneath Narayen, Adobe pushed from software program licenses to subscriptions to its Artistic Cloud software bundle, and the corporate is now working to develop via generative synthetic intelligence. He sought to accumulate fast-growing design software program firm Figma, however regulators pushed again, and the businesses referred to as off the deal, leading to Adobe paying Figma a $1 billion breakup charge.
“On behalf of the Board, I wish to acknowledge Shantanu’s contributions as CEO and architect of Adobe’s transformation over the previous 18 years, and for positioning Adobe for achievement within the AI-driven period,” Frank Calderoni, Adobe’s lead impartial director, was quoted as saying in a assertion. “As we take the subsequent step in succession planning, we’re centered on choosing the proper 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 duties at Adobe, the place he acquired $51 million in whole compensation for the 2025 fiscal 12 months, in response to a submitting. He owns $118 million in Adobe shares, in response to FactSet.
In a memo to workers, 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 grew to become 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 practical space of the corporate and the folks I met throughout the interview course of,” Narayen wrote. “We have now continued to create new markets, ship world-class merchandise, drive innovation in every thing we do and entice and retain the most effective and brightest workers.”
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 pacesetter I’ve come to know and respect deeply,” Dylan Area, Figma’s co-founder and CEO, wrote in an X publish. “He is considerate, form and relentless in pursuit of Adobe’s imaginative and prescient. Grateful for the time we spent collectively and wishing him all the most effective within the years forward!”
Satya Nadella, CEO of Adobe companion Microsoft, congratulated Narayen.
“You have constructed one of the essential software program corporations on the planet, and expanded what’s doable for creators, entrepreneurs, and types in every single place,” Nadella wrote on X. “What has at all times stood out to me is the empathy you’ve got dropped at the artistic course of and the instance you’ve got set as a pacesetter.”
Along with making the management announcement, Adobe reported robust outcomes and steerage.
Here is how the corporate did 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% 12 months over 12 months within the fiscal first quarter, which ended on Feb. 27, in response to a assertion. Web earnings of $1.89 billion, or $4.60 per share, elevated from $1.81 billion, or $4.14 a share, in the identical quarter a 12 months in the past. Adjusted earnings excludes stock-based and deferred compensation expense.
Annualized income from AI-first merchandise greater than tripled, the corporate stated.
With respect to steerage, 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 searching for $5.68 per share and $6.42 billion in income.
Traders have been punishing software program shares due to considerations about disruption from generative AI fashions. Adobe shares have been down almost 23% up to now 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 and marketing professionals totaled $4.39 billion, up 12% and above the $4.31 billion consensus amongst analysts polled by StreetAccount.
In the course of the quarter, Adobe introduced the provision of Acrobat, Categorical 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, Artistic Cloud, Categorical 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 each robust utilization and a basis for monetization,” he stated.
The Adobe Inventory service that gives inventory photographs and different media declined extra sharply than administration had predicted throughout the quarter.
“This shift is enjoying out extra shortly than we had deliberate for, and our focus stays on giving prospects significant alternative between Inventory and generative AI as they construct their artistic and advertising and marketing workflows,” David Wadhwani, president of Adobe’s creativity and productiveness enterprise, stated on the decision.
— CNBC’s Ari Levy contributed to this report.
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