05:07 PM EDT, 03/12/2026 (MT Newswires) -- Adobe (ADBE) late Thursday reported stronger-than-expected fiscal first-quarter results and said Chief Executive Shantanu Narayen plans to step down.

Adjusted earnings per share rose to $6.06 in the three months ended Feb. 27 from $5.08 a year earlier, compared with the FactSet-polled consensus of $5.87. Revenue jumped 12% to $6.40 billion, higher than the Street's $6.28 billion view.

Narayen, who has led Adobe for 18 years, will step down from his role as CEO after a successor has been appointed. He will, however, stay on as board chair.

Artificial Intelligence is reshaping creativity amid new workflows, Narayen wrote in a memo to employees.

"As we take the next step in succession planning, we are focused on selecting the right leader for this next exciting chapter of the company's growth and are grateful for Shantanu's continued leadership as CEO to ensure a smooth transition," Frank Calderoni, lead independent director of Adobe, said in a statement.

Shares were down 6.7% in after-hours trading and have declined 23% this year.

Annualized recurring revenue exiting the first quarter was $26.06 billion, in line with market estimates. AI-first ARR more than tripled year over year, Narayen said in a statement.

RBC Capital Markets expected Adobe to deliver ARR above consensus expectations.

The company likely saw some positive momentum in its third and fourth quarters of last year, but "translating partnerships and strategies to re-accelerating ARR remains the key to investor sentiment," RBC said in a note emailed Monday.

For the second quarter, Adobe projected adjusted EPS of $5.80 to $5.85 on revenue between $6.43 billion and $6.48 billion. The market consensus indicates $5.68 and $6.43 billion, respectively.

Adobe said it affirmed its fiscal 2026 targets.

The company in December expected adjusted EPS of $23.30 to $23.50 and revenue of $25.90 billion to $26.10 billion. At the time, the company pegged ARR growth of 10.2% year over year.

Analysts are modeling for $23.46 in non-GAAP EPS and $26.04 billion in sales.