Adobe’s Strong Quarter Collides With CEO Exit as Analysts Cut Targets

Overview

• Adobe beat fiscal Q1 targets on March 12 as shares fell about 6.7% after it disclosed a CEO transition.
• The company reported $26.06 billion in annualized recurring revenue, 13% subscription growth, $2.96 billion in operating cash flow, and 850 million monthly active users, and it guided Q2 revenue to $6.43–$6.48 billion with GAAP EPS of $4.35–$4.40.
• CEO Shantanu Narayen said he will step down after 18 years and will work with lead independent director Frank Calderoni on a successor with no timetable.
• Barclays cut the stock to Equal Weight with a $275 target, Argus moved to Hold, and UBS lowered its target to $290 with a Neutral rating after net new ARR lagged estimates and rapid growth in free users pressured average revenue per user.
• Adobe extended its AI push with a March 16 partnership with Nvidia to build next‑generation Firefly models on Nvidia’s platform and to add Nemotron document intelligence to Acrobat.