Adobe’s Architect Is Leaving the Building – Moby
Shantanu Narayen built Adobe into a $150 billion software empire over 18 years, survived the death of the CD-ROM, pioneered the subscription pivot that Wall Street now treats like scripture, and watched a $20 billion Figma deal collapse into a $1 billion consolation prize. On Thursday, Adobe announced he’s stepping down whenever a replacement materializes, which is the corporate equivalent of a resignation letter that says “TBD.”
The market, characteristically, had thoughts. Shares fell 7% after hours despite earnings that were actually quite good: $6.06 in adjusted EPS against a $5.87 consensus, $6.40 billion in revenue versus $6.28 billion expected, and AI product revenue that more than tripled year over year. Narayen called AI the company’s “next billion dollar business,” which, if you’re keeping score, is roughly the same figure Adobe handed Figma on the way out.
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The structural story here is the one Adobe would rather not tell loudly. Adobe Stock, the legacy photo licensing business, declined faster than management anticipated as generative AI quietly Napsterized the stock imagery market. Customers who once paid for premium Getty-adjacent content are now prompting their way to a passable hero image in eleven seconds, and Adobe is left playing defense on a product line it cannot easily replace with Firefly. The company says it’s giving customers “meaningful choice” between the two, which is the kind of thing you say when one option is actively eating the other.
Narayen, 62, leaves with 850 million monthly active users, a stock that’s 60% off its 2021 high, and a board searching for whoever gets to figure out whether Adobe leads the AI creative economy or quietly becomes infrastructure for it. The candidates will have opinions. The stock will have more feelings.
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