Adobe CEO Shantanu Narayen will step down after nearly two decades leading the company, as investors weigh a leadership transition and mounting competition from AI-driven creative tools
Shantanu Narayen will step down as chief executive of Adobe once a successor is appointed, the company said on Thursday, marking the end of an 18-year tenure that reshaped the design software maker into a global leader in creative tools.
The announcement sent Adobe’s shares down more than 7 per cent in extended trading, as investors weighed the leadership transition at a time when artificial intelligence is rapidly reshaping the creative software industry.
Narayen will remain chair of the board, supporting the incoming chief executive and ensuring continuity during the transition.
Leadership change amid AI disruption
Narayen’s departure comes as Adobe navigates a major technological shift driven by generative AI, which is lowering barriers to entry in the design software market and intensifying competition.
During his nearly two decades in charge, Narayen oversaw Adobe’s transformation from a traditional packaged-software company into a subscription-driven cloud platform. Under his leadership, products such as Adobe Photoshop, Adobe Illustrator, Adobe Premiere Pro and Adobe InDesign became industry standards for designers, filmmakers and digital creators worldwide.
He also spearheaded Adobe’s shift to Creative Cloud and Experience Cloud, a move that helped establish a stable recurring revenue model and significantly expand the company’s global user base.
However, the rapid emergence of AI-powered creative tools has raised fresh questions about Adobe’s long-term dominance in the sector.
Investors cautious despite strong results
The leadership announcement overshadowed otherwise strong quarterly results from Adobe.
For the first quarter, the company reported revenue of $6.40 billion, beating analysts’ estimates of $6.28 billion, according to data compiled by LSEG. Adjusted earnings came in at $6.06 per share, ahead of expectations of $5.87 per share.
Revenue from the company’s Creative and Marketing Professionals subscription segment — its core business — rose to $4.39 billion, topping forecasts of $4.32 billion.
Despite the earnings beat, investors remain wary about the company’s ability to monetise its artificial intelligence initiatives.
“Investors will likely focus on whether incoming leadership maintains a balance between disciplined execution and aggressive AI investment, especially as competition in creative and enterprise AI intensifies,” Grace Harmon, an analyst at eMarketer, told Reuters.
The creative software market is undergoing rapid change as new AI-driven platforms enable users to generate images, videos and design elements with minimal technical expertise.
Such technologies threaten to disrupt traditional subscription-based software models by making content creation faster and cheaper.
Adobe has responded by embedding AI capabilities across its product suite and investing heavily in new technologies, partnerships and potential acquisitions aimed at protecting its market leadership.
Even so, analysts say investor scepticism persists over how quickly those investments will translate into meaningful revenue growth.
Stock under pressure
Adobe’s shares have fallen about 22 per cent so far this year, after declining more than 21 per cent in 2025, reflecting broader investor concerns about the company’s AI strategy and future growth trajectory.
Looking ahead, Adobe forecast second-quarter revenue of $6.43 billion to $6.48 billion, broadly in line with analysts’ expectations of $6.43 billion.
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