Adobe posted record quarterly revenue and crossed 1 billion monthly active users for the first time, yet its stock slipped anyway after next-quarter guidance came in just under Wall Street's target — and the company simultaneously announced its first CEO change in nearly two decades.

The software giant reported fiscal third-quarter revenue of $6.76 billion, up 13% year-over-year and above the $6.69 billion analysts expected, with adjusted earnings of $6.13 per share topping estimates of roughly $6.07. Subscription revenue climbed to $6.58 billion from $5.79 billion a year earlier.

The AI Numbers Investors Wanted

Adobe said its AI-first annualized recurring revenue grew more than 150% year-over-year, pushing total annualized recurring revenue to $27.5 billion, while Creative Cloud's free tier alone topped 100 million users, up 70%. Yahoo Finance reported the company raised its full-year guidance to $26.576 billion-$26.626 billion in revenue and $24.45-$24.50 in adjusted earnings per share.

Even so, shares fell roughly 2-3% after the report because fourth-quarter revenue guidance of $6.80 billion-$6.85 billion came in just under the Street's $6.85 billion consensus — extending a rough year for a stock that has lagged the broader AI rally on investor worries that generative-AI tools could eat into Adobe's core Creative Cloud business, SiliconANGLE noted.

Adding to the uncertainty, Adobe announced Anil Chakravarthy, currently head of its Digital Experience unit, will become CEO effective Dec. 1, succeeding Shantanu Narayen — one of the longest-tenured CEOs in big tech, who has run Adobe since 2007. 24/7 Wall St. noted the leadership handoff arrives just as Adobe's AI-monetization numbers finally started matching what investors have been waiting to see. What's next: Wall Street will be watching whether Chakravarthy's incoming leadership shifts Adobe's AI strategy, and whether the company closes the Q4 guidance gap when it reports again in December.