Adobe Q1 EPS $6.06 on $6.40B Revenue; CEO to Step Down
Adobe reported Q1 adjusted EPS of $6.06 on record revenue of $6.40 billion, both topping estimates, and set Q2 guidance of $5.80–$5.85 EPS on $6.43–$6.48 billion revenue. Shares fell over 7% after CEO Shantanu Narayen announced his planned departure once a successor is named.
1. First-Quarter Earnings Beat
Adobe delivered adjusted earnings per share of $6.06, up from prior levels, on a 12% year-over-year revenue increase to a record $6.40 billion, exceeding consensus forecasts and demonstrating strength across its flagship Creative and Document Cloud segments.
2. CEO Departure Announcement
Shantanu Narayen, who has led the company for 18 years, announced he will step down once a successor is identified, ending a tenure marked by major product expansions and a shift toward subscription-based offerings.
3. Market Reaction and Stock Slide
Shares declined over 7% in extended trading following the leadership news, extending a broader slide of roughly 23% year-to-date and about 60% off the 2024 highs amid investor concerns over intensifying AI competition.
4. Second-Quarter Outlook
The company forecast Q2 adjusted EPS of $5.80 to $5.85 on revenue of $6.43 billion to $6.48 billion, again above street estimates, signaling management’s confidence in sustained demand despite industry headwinds.