Adobe stock is not reacting well to the planned departure of longtime CEO Shantanu Narayen

Narayen, who oversaw Adobe’s transformation into a subscription-based company, leaves as software makers are seen as being vulnerable to AI.

Shantanu Narayen [Images: Sajjad Hussain/AFP via Getty Images, Adobe Stock]

Shares in the preeminent graphics software company Adobe Inc. (Nasdaq: ADBE) are dropping significantly in premarket trading this morning following the company’s Q1 2026 earnings results.

Yet it’s not the earnings themselves that are driving ADBE stock lower. It’s an announcement from the company’s CEO, Shantanu Narayen, who said he plans to exit the role he has held for over 18 years. Here’s what you need to know:

On Thursday, Adobe announced the results of its first quarter for fiscal 2026. And for all intents and purposes, the results were of the caliber that would normally make investors happy:

Total revenue of $6.4 billion (up 12% year-over-year)

Diluted earnings per share (EPS) of $6.06 adjusted

Total annualized recurring revenue (ARR) of $26.06 billion

As noted by CNBC, for the quarter, Adobe’s total revenue and EPS figures exceeded investor expectations. The LSEG analyst consensus was that Adobe would bring in total revenue of $6.28 billion and achieve an EPS of $5.87.

But if Adobe beat expectations, why is the stock down significantly this morning?

Longtime boss is saying goodbye

The main reason Adobe’s shares are in the red this morning is that in addition to the company’s earnings results yesterday, the Photoshop maker also announced that its long-running CEO, Shantanu Narayen, will be stepping down from the role.

Without a doubt, the departure of Narayen is a loss for the company. As the departing CEO said in his resignation letter, Narayen has worked for Adobe for 28 years and led the company in the chief executive role for over 18 years.

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