Adobe CEO Shantanu Narayen — who has led the creative software giant for 18 years — announced Thursday he will step down once a successor is named, as the company faces intensifying pressure to prove it can thrive in an AI-first world.

18 Years at the Helm

Narayen joined Adobe in 1988 and became CEO in 2007. Over his tenure, Adobe pivoted from boxed software licenses to its subscription-based Creative Cloud model and attempted a $20 billion acquisition of design startup Figma — a deal that collapsed under regulatory pressure in 2023, costing Adobe a $1 billion breakup fee. He will remain as board chair while the company searches for his replacement.

"We are focused on selecting the right leader for this next exciting chapter," said lead independent director Frank Calderoni.

Mixed Signals

Adobe's Q1 FY2026 earnings, reported Thursday after market close, beat expectations: revenue hit $6.4 billion — up 12.1% year-over-year — and EPS came in at $6.06 against estimates of $5.87. Annualized revenue from AI-first products more than tripled year-over-year.

But guidance for Q2 only modestly exceeded Wall Street forecasts, and shares slid in after-hours trading. Adobe stock has fallen 23% year-to-date, part of a broader rout in SaaS names amid fears that generative AI tools could displace subscription-based creative software.

The AI Question

The CEO transition comes as analysts debate whether Adobe's core products — Photoshop, Illustrator, Premiere — face structural pressure from AI tools capable of performing creative tasks at a fraction of the cost. Adobe has invested heavily in its own Firefly generative AI platform, but that growth hasn't been enough to fully reassure investors about the company's long-term competitive position.