ADBE Shares Plunge As CEO Shantanu Narayen Announces Departure Shortly After Strong Q1 Results

Narayen said he would step down as CEO after a successor had been named, but would stay on as chair of the company’s board.

• Following the departure announcement, the board said that it has initiated its search for a successor. 
• The company also posted Q1 2026 results, recording a 12% growth in revenue that came in at $6.4 billion. 
• For Q2, Adobe said it expects revenue of $6.43 billion to $6.48 billion, versus a Wall Street forecast of $6.43 billion.

Adobe Inc. (ADBE) shares declined more than 7% in Thursday’s extended trading hours after the company’s Chief Executive Officer Shantanu Narayen said he would be stepping down from the role.

Narayen said he would step down after a successor was named, but would remain chair of the company’s board.

The announcement came amid the company’s first-quarter (Q1) 2026 results, in which Adobe reported 12% revenue growth to $6.4 billion. Meanwhile, the company posted diluted earnings per share of $6.06.

Transition Plans

“Over the coming months, I will be working with Frank Calderoni, our lead Director, and the Board of Directors to identify my successor and to ensure a smooth transition. I will stay on as Chair of the Board to support the next CEO just as John and Chuck did when I took on this role,” Narayen said in a message to Adobe employees on Thursday.

Narayen joined Adobe in 1988 as a vice president and general manager. He then transitioned to being the company's president and chief operating officer in 2005, and then took over as CEO from Bruce Chizen in 2007.

Following the departure announcement, the board said that it has initiated its search for a successor.

Earnings And Guidance

For the quarter, Adobe said that its total subscription revenue and Remaining Performance Obligations increased 13% year-on-year, while also clocking record Q1 cash flows from operations of $2.96 billion.

The design software company said that its Annualized Recurring Revenue (ARR) at the end of the quarter was $26.06 billion, while adding that AI-first ARR more than tripled year-over-year.

“Our mission to empower everyone to create represents an even larger opportunity as content powers all experiences in the AI era,” said Narayen.

For Q2, Adobe said it expects revenue of $6.43 billion to $6.48 billion. Wall Street had forecast revenues of $6.43 billion. The company provided an EPS guidance of $5.80 to $5.85, versus consensus estimates of $5.68.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around ADBE shares jumped to the highest levels in a week, increasing from ‘bearish’ to ‘extremely bullish’ over the past 24 hours amid ‘extremely high’ message volumes.

One bullish user said the sell-off was “crazy” after the company’s beat-and-raise results.

ADBE shares have fallen 19% in the past year.

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