Adobe CEO Shantanu Narayen to step down after 18-year tenure amid pressure to scale AI efforts
Adobe has initiated a search for a new chief executive following CEO Shantanu Narayen’s announcement on Thursday that he intends to step down after an 18-year tenure.
Narayen stated that he will remain in his position until a successor is named, at which point he will transition to the role of board chair.
“In the coming months, I will collaborate with our lead director, Frank Calderoni, and the board of directors to select my successor and ensure a seamless transition,” Narayen noted in a memo to staff.
On Thursday after market close, Adobe released its financial results for the first quarter of fiscal year 2026, which concluded on Feb. 27. The company reported earnings per share (EPS) of $6.06, surpassing the $5.87 estimate from analysts. Revenue reached $6.4 billion, exceeding the projected $6.28 billion, marking a 12.1% year-over-year increase.
In a statement accompanying the earnings report, Narayen noted that annualized revenue from AI-centric products more than tripled compared to the previous year. He added, “Our mission to enable everyone to create represents an even greater opportunity, as content drives all experiences in the age of AI.”
Adobe EVP and CFO Dan Durn stated that the company achieved 13% growth in subscription revenue and a record first-quarter cash flow of $2.96 billion. “As we accelerate the deployment of AI-driven capabilities across creativity, productivity, and customer experience orchestration, Adobe is well-positioned for sustained profitable growth,” he said.
For the second fiscal quarter, Adobe projects adjusted earnings between $5.80 and $5.85 per share on revenue ranging from $6.43 billion to $6.48 billion. These figures exceed analyst expectations of $5.68 per share and $6.42 billion, according to LSEG data.
Although Adobe, ranked 201 on the 500, beat first-quarter estimates, its guidance for the second quarter and the full year only slightly surpassed Wall Street forecasts. Consequently, the stock dipped approximately 1.43% in after-hours trading as investors reacted to the CEO transition news and sought a more robust outlook.
Narayen’s departure occurs amid ongoing debate on Wall Street regarding whether artificial intelligence might diminish demand for traditional software tools. A broad decline in SaaS and cloud stocks in early February—termed “SaaS-mageddon” by some—highlighted investor concerns that agentic AI could threaten per-seat software pricing models.
“The next chapter of creativity is being written right now—defined by AI, new workflows, and entirely new modes of expression,” Narayen wrote in his employee memo. “Adobe has never waited for the future; we have anticipated it, built it, and led it. My greatest confidence stems not just from our technology, but from our people.”
Narayen joined Adobe in January 1998 as vice president and general manager of the engineering technology group. He advanced through the company’s leadership, becoming president and COO in 2005, and has served as CEO since December 2007.
In his memo, he noted that over his 28-year tenure, the company expanded from roughly 3,000 employees to over 30,000, while revenue grew from under $1 billion to more than $25 billion.
Several industry leaders have publicly expressed their support for Narayen. Microsoft CEO Satya Nadella wrote on X that Narayen “built one of the most significant software companies in the world.”
“What has always impressed me is the empathy you have brought to the creative process and the example you have set as a leader,” Nadella added. “I am grateful for your friendship, your mentorship, and everything you have contributed to Adobe and our industry.”
Adobe has not yet provided a timeline for the appointment of Narayen’s successor.