Adobe stated CEO Shantanu Narayen will step down after a successor has been appointed, and he will stay because the design software program company’s chair. Shares tumbled 7% in prolonged buying and selling.
Narayen joined Adobe in 1988 as a vice chairman and common supervisor, and he turned CEO in 2007. Under Narayen, Adobe pushed from software program licenses to subscriptions to its Creative Cloud software bundle, and the company is now working to increase by generative synthetic intelligence. He sought to accumulate fast-growing design software program company Figma, however regulators pushed again, and the businesses called off the deal, leading to Adobe paying Figma a $1 billion breakup charge.
“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 impartial 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 impartial director of Pfizer along with his duties at Adobe, the place he obtained $51 million in complete compensation for the 2025 fiscal 12 months, in accordance with a filing. He owns $118 million in Adobe shares, in accordance with FactSet.
In a memo to workers, Narayen wrote that he is staying on the board to assist the following Adobe CEO, simply as co-founders John Warnock and Charles “Chuck” Geschke did when he turned 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 inventory jumped greater than sixfold, whereas 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!”
In addition to creating the management announcement, Adobe reported robust outcomes and steerage.
Here’s how the company did compared with LSEG consensus:
- Earnings per share: $6.06 adjusted vs. $5.87 anticipated
- Revenue: $6.40 billion vs. $6.28 billion anticipated
Adobe’s income grew about 12% 12 months over 12 months within the quarter, which ended on Feb. 27, in accordance with a statement. Net 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 12 months in the past. Adjusted revenue excludes stock-based and deferred compensation expense.
Annualized income from AI-first merchandise greater than tripled, the company stated.
With respect to steerage, Adobe known 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.
Investors have been punishing software stocks due to issues about disruption from generative AI fashions. Adobe shares have been down practically 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 report from 2021 after dropping greater than 20% in every of the previous two years.
Revenue 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.
During the quarter, Adobe introduced the provision of Acrobat, Express and Photoshop apps for OpenAI’s ChatGPT assistant, together with an expanded partnership with promoting company WPP.
Executives will focus on the outcomes on a convention name beginning at 5 p.m. ET.
— CNBC’s Ari Levy contributed to this report.
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