Digital media and marketing software firm Adobe (ADBE) late Thursday beat estimates for its fiscal first quarter and with its outlook. But Adobe stock fell in extended trading as the company's longtime chief executive announced plans to step down.

The San Jose, Calif.-based company earned an adjusted $6.06 a share on sales of $6.4 billion in the quarter ended Feb. 27. Analysts polled by FactSet had expected Adobe earnings of $5.87 a share on sales of $6.28 billion. On a year-over-year basis, Adobe earnings rose 19% while sales climbed 12%.

For the current quarter, its fiscal Q2, Adobe expects to earn an adjusted $5.83 a share on sales of $6.46 billion. That's based on the midpoint of its guidance. Wall Street had been modeling earnings of $5.68 a share on sales of $6.43 billion. In the same quarter last year, Adobe earned an adjusted $5.06 a share on sales of $5.87 billion.

Meanwhile, Chief Executive Officer Shantanu Narayen announced plans to step down as CEO after 18 years in the post. He will continue to serve as chairman of the board after a successor is chosen.

In after-hours trading on the stock market today, Adobe stock dropped more than 6% to 251.96. During the regular session Thursday, Adobe sank 1.4% to close at 269.78.

"Adobe delivered record Q1 results with AI-first ARR (annual recurring revenue) more than tripling year over year and subscription revenue growing 13 percent," Narayen said in a news release.

Adobe Stock Victim Of 'SaaSpocalypse'

Adobe shares, along with those of other software-as-a-service (SaaS) companies, have been hammered over concerns that artificial intelligence startups will erode their business. Wall Street analysts have dubbed the downturn in software stocks the "SaaSpocalypse."

However, Adobe has added AI functions across its creative and marketing software products.

"While we see Adobe's AI competitive positioning as improved, overall top-line growth continues to decelerate this year, and AI sales may not scale quickly enough to prevent further deceleration in FY27," BNP Paribas analyst Stefan Slowinski said in a March 6 report. He rates Adobe stock as neutral with a price target of 275.

Heading into Adobe's fiscal Q1 earnings report, Wall Street analysts had been increasingly pessimistic. At least five analysts have lowered their price targets or ratings on ADBE stock in the last two weeks.

On Tuesday, TD Cowen analyst Derrick Wood lowered his price target on Adobe stock to 325 from 400 and reiterated his hold rating. In a client note, Wood said channel checks pointed to continued growth deceleration.

Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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