Adobe, CEO Shantanu Narayen will step down as the head of the creative software company amid growing doubts about its ability to succeed in the AI era.
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Adobe said Thursday that longtime CEO Shantanu Narayen, who has led the company for 18 years, will step down once a successor is named. The 62-year-old will remain CEO until then and continue as board chairman. The announcement sent the design software maker’s shares down more than 7% in extended trading amid renewed concerns about its strategy in the AI era.
Adobe is facing a changing software landscape as artificial intelligence makes design tools easier to build and use, allowing new competitors to challenge its long-standing market leadership.
Separately, Adobe reported quarterly results showing double-digit growth in total revenue and its subscription segments, highlighting strong demand for its products.
Concerns have also grown with the rise of new AI tools and agents that could disrupt traditional software subscriptions by offering faster and cheaper ways to create products.
Adobe’s shares have dropped about 22% this year after falling more than 21% in 2025, showing investor concerns about the company’s AI strategy and outlook.
The company forecast second-quarter revenue of $6.43 billion to $6.48 billion, roughly in line with estimates of $6.43 billion, according to LSEG data. It reported first-quarter revenue of $6.40 billion, beating estimates of $6.28 billion. On an adjusted basis, Adobe earned $6.06 per share, above expectations of $5.87 per share, while revenue from its Creative and Marketing Professionals subscription segment reached $4.39 billion, topping estimates of $4.32 billion.
Although Adobe has invested heavily in artificial intelligence to strengthen its products, investor doubts about when it will make money from AI may have contributed to the drop in its share price, Harmon said.
“Investors will likely watch whether the new leadership can balance strong execution with continued AI investment, especially as competition in creative, and enterprise AI grows,” said Emarketer analyst Grace Harmon.
After the announcement, Satya Nadella shared a message on X praising Narayen’s leadership.
“Congratulations, Shantanu, on an incredible run at Adobe. You’ve built one of the world’s most important software companies and expanded opportunities for creators, entrepreneurs, and brands everywhere,” Nadella wrote.
“I’m grateful for your friendship, mentorship, and everything you’ve done for Adobe and the industry,” he said.
Shantanu Narayen was born in Hyderabad and later moved to the United States to pursue a master’s degree at Bowling Green State University. He joined Adobe in 1998 as vice president and general manager of its engineering technology group, became president and chief operating officer in 2005, and has served as CEO since 2007. In 2017, he was named chairman of the board. Before joining Adobe, Narayen held product development roles at Apple and Silicon Graphics and also co-founded an early photo-sharing startup called Pictra.
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