Adobe CEO Shantanu Narayen says he will step down as CEO after successor has been named

In a significant corporate shift, Adobe has announced that its CEO, Shantanu Narayen, will be stepping down once a successor is appointed, though he will continue to serve as chair of the board. Following this announcement, Adobe's shares experienced a 6% decline in after-hours trading. Narayen, who joined Adobe in 1988 and took the helm as CEO in 2007, has been instrumental in transforming the company from traditional software licensing to a subscription-based model with its Creative Cloud suite. Under his leadership, Adobe has also focused on expanding its capabilities in generative artificial intelligence. However, an attempted acquisition of the fast-growing design firm Figma faced regulatory hurdles, leading to the cancellation of the deal and a $1 billion breakup fee to Figma. Frank Calderoni, Adobe's lead independent director, praised Narayen for his pivotal role in the company's evolution over the last 18 years and his efforts to position Adobe for future success in an AI-driven landscape. Calderoni emphasized the importance of finding the right leader for this new chapter in Adobe’s growth trajectory. In his memo to employees, Narayen expressed his intention to remain supportive of the upcoming CEO, mirroring the approach taken by Adobe's co-founders during his own transition into leadership. He reflected on his journey with Adobe, highlighting the company’s commitment to innovation and market leadership. In conjunction with the leadership announcement, Adobe reported robust financial results, with a year-over-year revenue increase of approximately 12% for the quarter ending February 27. The company projected adjusted earnings between $5.80 and $5.85 per share for the upcoming fiscal second quarter, along with revenue expectations of $6.43 billion to $6.48 billion. These figures exceeded analyst forecasts, which anticipated earnings of $5.68 per share and $6.42 billion in revenue. Despite these promising results, investors have expressed concerns about the impact of generative AI on software stocks, contributing to a nearly 23% decline in Adobe shares since the beginning of 2026. The stock has seen a significant drop of over 60% from its peak in 2021, reflecting a challenging environment for the software industry. Additionally, the revenue from subscriptions for creative and marketing professionals reached $4.39 billion, surpassing analyst expectations. As the company prepares for this transition, Adobe executives are set to discuss their financial performance during a conference call scheduled for 5 p.m. ET. The future looks uncertain for the software giant amidst evolving market dynamics and leadership changes.