Narayen will remain as CEO till a successor has been appointed, as per an Adobe statement. However, he will remain on the company’s board as Chairman.
Shares of Adobe are now at their lowest in three years, having already declined 23% so far this year.
Adobe, which makes photoshop and other products for creative art professionals, is among the group of SaaS companies like Salesforce, who are struggling to win new clients amidst a wave of AI start-ups. Adobe has worked to weave artificial intelligence tools through its creative and marketing software — and offers its own range of AI models meant to generate imagery that doesn’t carry copyright risks — in an effort to keep its massive market share.
During Narayen’s nearly two decade-long tenure as CEO, Adobe’s annual revenue has grown nearly six-fold to $24 billion. The workforce has also grown from 7,000 to nearly 30,000 since he took charge in late-2007. Narayen is often credited with steering one of the first successful transitions in software to a business model, where customers brought recurring subscriptions to a bunch of products instead of buying individual applications.
Narayen had “a legendary run at Adobe,” Microsoft Corp. CEO Satya Nadella wrote on social network X. Dylan Field, the chief executive officer of Figma Inc., which Adobe tried to acquire in 2022, wrote that Narayen is “thoughtful, kind and relentless in pursuit of Adobe’s vision.”
However, Narayen’s role and direction has been questioned by investors in recent times as it has become easier to create visual media without Adobe’s expensive products.
The announcement was made alongside Adobe’s quarterly results. Narayen said in an analyst call that the company’s Annual Recurring Revenue for AI-first products such as Firefly has more than tripled in the first quarter compared to the same period last year. For the current quarter, Adobe projects revenue to be between $6.43 billion to $6.48 billion, the lower range of the analyst expectations of $6.43 billion. Earnings Per Share is projected to be between $5.8 to $5.85 per share, versus an average projection of $5.7.
(With Inputs From Agencies)
