Adobe Inc. announced today that Chief Executive Officer Shantanu Narayen plans to step down from the role after 18 years and will transition from his position as CEO after a successor has been appointed.

Adobe’s board has established a special committee to direct the process that will consider both internal and external candidates. Narayen (pictured) will remain at Adobe as chair of the board. The fact that a new CEO hasn’t yet been named suggests Narayen’s move wasn’t expected.

Narayen, who joined Adobe in 1998 and became chief executive in 2007, oversaw one of the most significant strategic shifts in the software industry when Adobe moved from selling packaged software to a cloud-based subscription model. The launch of Adobe Creative Cloud transformed the company’s business model and also the way the software business operated.

Although software-as-a-service existed before Adobe adopted the model, the shift under Narayen demonstrated that subscription software could operate successfully at a massive scale. Although some customers complained, they eventually came around, helping cement Adobe’s dominance in professional creative tools, one that hasn’t been seriously challenged since.

Narayen also led Adobe’s expansion beyond its traditional creative applications with the Digital Experience platform, which provides tools for marketing, analytics and customer engagement used by large global organizations.

In more recent years, Narayen oversaw Adobe’s integration of artificial intelligence across its products, such as rolling out generative AI capabilities through its Firefly models and embedding AI features into applications such as Photoshop and Illustrator.

“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,” said Frank Calderoni, lead independent director of Adobe. “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.”

Record earnings

The announcement of Narayen’s plans came alongside Adobe announcing record earnings for its fiscal 2026 first quarter, with results ahead of expectations, though the news of Narayen’s plans to step down likely caused Adobe shares to fall more than 7% in late trading.

For the quarter that ended on February 27, Adobe reported adjusted earnings per share of $6.06, up from $5.08 per share in the same quarter of the previous fiscal year, on revenue of $6.4 billion, up 12% year-over-year and a record high for Adobe. Both figures were ahead of the $5.86 per share and revenue of $6.28 billion expected by analysts.

Adobe also saw record cash flow from operations in the quarter of $2.96 billion and the company ended the quarter with remaining performance obligations of $22.22 billion.

Across Adobe’s verticals, total customer group subscription revenue in the quarter came in at $6.17 billion, up 13% year-over-year. Business professionals and consumer subscription revenue rose 16%, to $1.78 billion. And creative and marketing professionals subscription revenue came in at $4.39 billion, up 12% year-over-year.

For its fiscal year 2026 second quarter, Adobe expects adjusted earnings per share of $5.80 to $5.85 and revenue of $6.43 billion to $6.48 billion. The outlook was ahead of the $5.70 per share and revenue of $6.43 billion expected by analysts.

Photo: Adobe