Adobe CEO Shantanu Narayen has announced he intends to depart the company after 18 years as the prince of PDFs.
Narayen didn’t say why he’s moving on, but on the company’s Q1 2026 earnings call said he notified Adobe’s board of his decision some time ago. Adobe’s announcement of the CEO’s departure also offers no rationale.
The closest thing The Register could find to a rationale came on the company’s earnings call, during which Narayen said “As a company that has prided itself on creating categories, our AI transformation begins with a focus on customer-centric product strategy to anticipate and fulfill the diverse needs of a large and growing customer base.”
Maybe Narayen felt he doesn’t have another big transition in him, after he led Adobe’s swing to become a SaaS company? It’s also worth noting he’s not likely to be short of cash given the size of his recent paychecks.
That said, Narayen had a solid AI story to tell, telling investors annual recurring revenue from the company’s new AI-first offerings more than tripled year-over-year, “reflecting progress against this opportunity with individuals and enterprises alike.”
Those weren’t just hollow words: David Wadhwani, president of the company’s Creativity and Productivity Business, pointed to 45 percent quarter-over-quarter growth in consumption of generative AI credits.
Wadhwani said use of credits to pay for video generation rose 8x year-over-year, and audio generation doubled. That growth, he said, shows Adobe customers are “moving deeper into AI-assisted creation across the full creative process.”
Every action has an equal and opposite reaction, and for Adobe that meant a dip for its business selling stock images.
“While Q1 had many highlights, our traditional stock business saw a steeper decline than we expected,” Wadhwani admitted. “This shift is playing out more quickly than we had planned for, and our focus remains on giving customers meaningful choice between stock and generative AI as they build their creative and marketing workflows.”
Narayen said the decline in stock sales meant Adobe posted 10.9 percent growth in recurring revenue, instead of 11.2 percent.
The company posted record revenue for the quarter of $6.4 billion, up 12 percent year-over-year, and net income of $1.9 billion. Subscription revenue rose 13 percent year-over-year. Those aren’t numbers that typically get boards looking for a new CEO.
The board needs to anyway and said it will consider internal and external candidates.
Narayen said Adobe has “always invested in developing a really deep bench of outstanding execs.”
Asked what the board will look for in his successor, he said Adobe will always be a product company. “And I think taking advantage and looking around the corner as it relates to the immense opportunity that AI has across creativity and marketing is the real opportunity for not just the CEO, but the company as well,” he concluded. ®