Adobe Inc. (ADBE) recently unveiled its first-quarter financial results, sparking investor interest and market scrutiny. The stock experienced a 9.5% decline in after-hours trading, so Adobe CEO Shantanu Narayen addressed the company’s performance and outlook in a candid interview.

In a conversation with CNBC, Narayen offered his perspective on Adobe’s first-quarter results and provided insights into the company’s future trajectory.

Reflecting on the quarter’s performance, Narayen highlighted several key metrics that underscored Adobe’s continued growth and profitability. He emphasized the company’s record-breaking quarter: “Q1 was a record quarter for Adobe, with tremendous profitability and strong fundamentals underlying our business.” Narayen pointed to the significant growth in recurring revenue, which expanded by 16%, as evidence of Adobe’s resilience and market position.

Narayen attributed much of Adobe’s success to its focus on innovation, particularly in the realm of artificial intelligence (AI). He remarked, “We have been investing in AI-driven technologies, such as Firefly and AI generation, which have been integrated into various Adobe applications. Users have embraced these innovations, with over 6.5 million individuals leveraging Firefly and AI generation within our suite of products.” Narayen underscored the positive impact of these advancements on user experience and Adobe’s competitive edge in the market.

Addressing concerns about the quarter’s performance relative to market expectations, Narayen provided context for the figures. He explained, “When you normalize for pricing actions taken in the previous year, we actually had a record Q1 in terms of commercial net additions in subscriptions and creative ARR, which grew by 20%. This demonstrates sustained growth and strong demand for our offerings.” Narayen emphasized Adobe’s ability to adapt to changing market dynamics and deliver value to customers.

Looking beyond the quarterly results, Narayen discussed broader industry trends and Adobe’s strategic priorities. He highlighted the growing emphasis on digital experiences and personalized content: “Consumers are increasingly seeking personalized engagement and interactive experiences across various channels. Adobe’s solutions are well-positioned to meet this demand, particularly in digital marketing.” Narayen emphasized Adobe’s commitment to driving innovation and delivering value to customers in an evolving digital landscape.

In response to questions about capital allocation and future strategies, Narayen reiterated Adobe’s commitment to returning excess capital to shareholders. He emphasized Adobe’s track record of returning billions of dollars to shareholders over the past decade and announced plans for an additional $25 billion stock repurchase program. Narayen concluded, “We remain confident in our financial position and growth prospects, and we are committed to delivering long-term value to our customers and shareholders.”

Narayen’s insights provided a comprehensive overview of Adobe’s performance, strategic direction, and commitment to driving innovation in the digital experience space. Despite short-term market fluctuations, Adobe remains focused on delivering long-term value to its customers and shareholders through continued innovation and strategic investments in key growth areas.