Narayen announced that he will step down once a successor is appointed. He will remain chair of the board.

“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,” Narayen said in a memo to employees.

On Thursday after the bell, Adobe reported financial results for its first quarter of fiscal year 2026, which ended Feb. 27. Earnings per share (EPS) came in at $6.06, beating analysts’ estimate of $5.87 per share. Revenue hit $6.4 billion, topping analysts’ expectations of $6.28 billion, while sales increased 12.1% year over year.

Annualized revenue from AI-first products more than tripled year over year, Narayen said in a statement accompanying the earnings release. “Our mission to empower everyone to create represents an even larger opportunity as content powers all experiences in the AI era,” he said.

The company delivered 13% subscription revenue growth and record first-quarter cash flow of $2.96 billion, Adobe EVP and CFO Dan Durn said in a statement. “As we accelerate AI-powered capabilities across creativity, productivity and customer experience orchestration, Adobe is well positioned for continued profitable growth,” he said.

For the fiscal second quarter, Adobe expects adjusted earnings between $5.80 and $5.85 per share on revenue of $6.43 billion to $6.48 billion, above analyst forecasts of $5.68 per share and $6.42 billion, according to LSEG data.

While Adobe, No. 201 on the Fortune 500, topped first-quarter estimates, its second-quarter and full-year guidance only modestly exceeded Wall Street forecasts, and the stock slipped with the CEO transition announcement and as investors sought a more aggressive outlook. Adobe fell about 1.43% in after-hours trading.

Narayen’s departure comes as Wall Street debates whether artificial intelligence could reduce demand for some traditional software tools. In early February, a broad sell-off in sell-off in SaaS  and cloud stocks—labeled by some investors as “SaaS-mageddon”—reflected fears that agentic AI could undermine per-seat software pricing.

“The next era of creativity is being written right now—shaped by AI, by new workflows and by entirely new forms of expression,” Narayen said in his memo to employees. “Adobe has never waited for the future to arrive. We’ve anticipated it. We’ve built it. And we’ve led it. What gives me the greatest confidence isn’t just our technology—it’s our people.”

Narayen joined Adobe in January 1998 as vice president and general manager of the company’s engineering technology group. He later rose through the executive ranks, becoming president and COO in 2005, and has served as CEO since December 2007.

Over those 28 years, the company grew from about 3,000 employees to more than 30,000 and increased revenue from less than $1 billion to more than $25 billion, he wrote in the memo.

Several chief executives have publicly supported Narayen. Satya Nadella, CEO of Microsoft, wrote in a post on X that Narayen “built one of the most important software companies in the world.”

“What has always stood out to me is the empathy you’ve brought to the creative process and the example you’ve set as a leader,” Nadella added. “Grateful for your friendship, mentorship, and for all you’ve done for Adobe and for our industry.”

Adobe has not yet announced a timeline for selecting Narayen’s successor.