Adobe Inc. (NASDAQ:ADBE) shares fell sharply in Friday’s premarket trading after the company unexpectedly announced that longtime CEO Shantanu Narayen will step down following 18 years leading the software giant.

Quarterly Financial Performance

On Thursday, Adobe reported fiscal first-quarter revenue of $6.40 billion and adjusted EPS of $6.06, topping estimates of $6.28 billion and $5.87, respectively.

The company also disclosed a planned CEO transition, saying CEO Shantanu Narayen will step down after a successor is appointed while remaining board chair.

Adobe expects second-quarter revenue of $6.43 billion-$6.48 billion versus estimates of $6.43 billion and adjusted EPS of $5.80-$5.85 versus estimates of $5.68.

Adobe affirmed its full-year revenue guidance of $25.90 billion-$26.10 billion versus estimates of $26.03 billion and adjusted EPS of $23.30-$23.50 versus estimates of $23.50.

Key Takeaways From Conference Call

The company disclosed that it exceeded 850 million monthly active users across Acrobat, Creative Cloud, Express, and Firefly. This marks a 17% year-over-year (Y/Y) growth, demonstrating both robust engagement and strong monetization potential.

Also, Adobe achieved growth of over 30% Y/Y in AEP & Apps, as well as Adobe GenStudio, ending ARR.

Management stated that user growth is picking up pace, with monthly active users (MAUs) hitting new highs.

Creative freemium accounts alone exceeded 80 million MAUs, a 50% ...