Adobe CEO Change: Record Revenue, Falling Stock, and the Seat Problem

Adobe just reported the highest quarterly revenue in its history. In the same month, it announced that its chief executive of more than 18 years will step aside, and its share price remains well below where it started the year. Those facts look contradictory. They are not, and the reason matters to anyone who sells creative or marketing work.

What Adobe reported

Adobe published its fiscal third-quarter 2026 results on 10 September 2026.

Adobe fiscal Q3 2026 headline results

Metric	Result
Total revenue	$6.76 billion, up 13% year over year
Creative and Marketing Professionals subscription revenue	$4.65 billion, up 13%
Business Professionals and Consumers subscription revenue	$1.91 billion, up 16%
AI-first annual recurring revenue	Up more than 150%
Monthly active users	1 billion across creativity and productivity products
Guidance	Full-year revenue and EPS targets raised

By any normal measure, that is a strong quarter.

The leadership change

On 3 September, Adobe announced that Anil Chakravarthy will become CEO on 1 December 2026. Shantanu Narayen, who has led the company for more than 18 years, will become executive chair.

Other changes landed around the same time. David Wadhwani, who led Adobe's creativity and productivity business for nearly five years, said he would leave. Chief Financial Officer Dan Durn had already left in June.

Adobe shares have fallen roughly 18% during 2026, after dropping more than 21% in 2025. Morgan Stanley has cited concern that competition from AI could affect the recurring revenue generated by Creative Cloud. After the results, the stock dipped 3% in early trading and recovered, with the softer fourth-quarter outlook the stated concern.

Why does a stock fall when revenue hits a record?

Because revenue and share price answer different questions.

Revenue answers whether customers are paying today. They clearly are. The share price reflects whether investors believe customers will keep paying in the same way for years to come. That is where the doubt sits.

Adobe's core creative business is sold largely per person. A Creative Cloud license assumes a designer, editor or marketer using it. If AI means the same output needs fewer people, the number of seats a customer needs can shrink even while the software gets better and more popular.

That is why a record quarter cannot settle the question. Growth in the current model does not prove the durability of the model.

What is seat-based pricing, and why is it under pressure?

Seat-based pricing charges per user. It works well when value scales with the number of people doing the work. It struggles when the tools let each person do far more, because the customer's need for seats falls as productivity rises.

Adobe is responding. Its AI-first recurring revenue is its fastest-growing line, and its freemium and consumer products are expanding its reach. The open question investors keep pricing in is how much of the traditional per-seat creative base that new revenue replaces.

Why this matters for agencies

Most creative and marketing agencies are also priced per seat, even if they never use the word. A day rate, a retainer sized by team allocation, a proposal that adds a designer when scope grows: each assumes value scales with people.

How seat logic shows up in software and in agencies

	Adobe	A typical agency
Unit of pricing	User license	Hours, day rate or team size
What AI changes	Fewer seats for the same output	Fewer hours for the same deliverable
Good year can hide it?	Yes, record revenue	Yes, busy team and full pipeline
What protects value	Pricing on outcomes and usage	Pricing on results and decisions

If the market doubts that seat-based creative work holds its value at the most successful creative software company in the world, it is reasonable to ask the same question about a creative retainer.

We saw a related pattern in Fiverr's results: buyers of simple, briefable tasks left, while the remaining relationships grew larger. The work that holds its price is the work that needs judgment.

Is AI killing Adobe?

No, and that framing misses the point. Adobe's AI revenue is growing faster than anything else it sells, and it has a billion monthly users. It is competing well inside the seat.

The harder read is that winning inside the seat may not be enough when the seat itself is being questioned. That is the same trap a busy agency can fall into: revenue is up, the team is stretched, and the unit the client is really buying has quietly stopped being hours.

What to do about it

1. Audit how your fees are built. If most proposals scale with headcount or hours, you are exposed to the same doubt as a per-seat license.
2. Move one offer to outcome pricing. Pick a service where the result is measurable and price the result. Learn from one before changing everything.
3. Take the production layer out of your cost base. Automating repeatable production and reporting keeps margin intact when clients start expecting fewer hours for the same deliverable.

Adobe will almost certainly remain a major company. The lesson for service businesses is not about Adobe's future. It is that a record year is not evidence that the way you charge will last.