March 12 (Reuters) - Adobe's longtime CEO Shantanu Narayen will leave his role once a successor is appointed, the design software maker said on Thursday, sending its shares down over 7% in extended trading on renewed worries around its strategy as it grapples with AI disruption.
Narayen's exit from the role comes after he served as the head of Adobe for 18 years, during which he helped the company's flagship software such as Photoshop, Illustrator, Premiere Pro and InDesign become household products for creatives across the world.
Narayen will stay on as chair of the board to support the next CEO, the company said. But the announcement of him leaving the helm puts the company in a precarious position as it comes at a time when Adobe is doubling down on AI, striking partnerships and exploring acquisitions to extend its industry lead.
Separately, Adobe reported quarterly financial results, with double-digit growth in total revenue and its customer subscription segments, reflecting resilient spending on its product suite.
Adobe is grappling with a changing software landscape, where artificial intelligence is lowering the barrier to entry for design and its dominant position in the industry is being threatened by newcomers embracing the technology.
"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," said Emarketer analyst Grace Harmon.
Worries have also flared with the rise of new automated AI tools and agents that many fear would be able to disrupt traditional software subscription models and give way to quicker and cheaper ways of creating products.
While Adobe has bet heavily on artificial intelligence to bolster its product suite, "investor skepticism about monetization timing and payoff may have factored into a drop in its share prices," Harmon said.
Adobe's shares have fallen around 22% so far this year after declining over 21% in 2025, reflecting investor apprehension over the firm's AI strategy and outlook.
The company forecast second-quarter revenue between $6.43 billion and $6.48 billion, compared with estimates of $6.43 billion, according to data compiled by LSEG.
It reported first-quarter revenue of $6.40 billion, beating estimates of $6.28 billion.
On an adjusted basis, the company earned $6.06 per share, compared with estimates of $5.87 per share.
Creative and Marketing Professionals subscription revenue came in at $4.39 billion, topping expectations of $4.32 billion.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Alan Barona)
