Salesforce misses on revenue, issues disappointing guidance
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Salesforce
reported weaker-than-expected quarterly revenue on Wednesday and issued a forecast that fell short of analysts’ estimates. The stock price slipped 4% in extended trading.
Here’s how the company did compared with LSEG consensus:
Revenue increased 7.6% from a year ago in the quarter that ended Jan. 31, according to a statement. Net income rose to $1.71 billion, or $1.75 per share, from $1.45 billion, or $1.47 per share, a year earlier.
The top category of subscription and support revenue was service, at $2.33 billion. The figure was up about 8% and below the $2.37 billion consensus among analysts surveyed by Visible Alpha. In the sales category, Salesforce generated $2.13 billion in revenue, up 8% and also trailing Visible Alpha’s consensus of $2.17 billion.
During the quarter, the company introduced its second-generation Agentforce artificial intelligence agent technology, which answers employee questions in the Slack team communications app.
Salesforce said it has completed more than 3,000 paid deals involving Agentforce since October. Agentforce has gotten involved in 380,000 conversations through Salesforce’s help website, with humans getting involved in 2% of cases, according to the statement.
“A lot of other vendors are talking about their agent capabilities, but few are able to show that they’ve got this really running at scale,” co-founder and CEO Marc Benioff said on a conference call with analysts.
Agentforce will make a modest contribution to revenue in fiscal 2026, with a larger effect in the following year, said Amy Weaver, Salesforce’s outgoing finance chief.
Benioff referred to a forthcoming product in the area of information technology service management, where ServiceNow
operates.
The U.S. Department of Government Efficiency is using Slack, Benioff said.
“We’ll work closely with the government,” he said. “We’ll do anything we can to help them succeed.”
The company called for $2.53 to $2.55 in adjusted earnings per share for the fiscal first quarter, with $9.71 billion to $9.76 billion in revenue. Analysts polled by LSEG had anticipated adjusted earnings of $2.61 per share, with $9.9 billion in revenue.
For fiscal 2026, Salesforce is targeting $11.09 to $11.17 in adjusted earnings per share on $40.5 billion to $40.9 billion in revenue, implying 7.4% growth. The LSEG consensus was for adjusted earnings per share of $11.18 on $41.35 billion in revenue.
As of Wednesday’s close, Salesforce shares are down about 8% so far in 2025, while the S&P 500 index has gained about 1%.
WATCH: Salesforce, Microsoft executives spar over AI products
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(Bloomberg) — Results from Salesforce Inc. this week pose a key test for the stock and for what many believe is the next big thing in artificial intelligence: AI agents.
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The software giant is seen at the vanguard of this kind of tool, which is designed to handle multi-step processes on behalf of users without human supervision. It launched its Agentforce product in October and introduced a well-received update in December, meaning this report, due after the market close on Wednesday, will be key to the case for its adoption and potential.
A positive read could not only revive the stock, which has trended lower this year, but reassure investors about AI’s potential to drive growth and efficiency more broadly.
“AI agents are now at the forefront of the software trade, and this is the first quarter where we should see hard numbers,” said Clayton Allison, portfolio manager at Prime Capital Financial.
“People are questioning whether the capex spent on AI has been worth it, so if we see tangible results and monetization from Salesforce, that could suggest tech deserves its premiums. If it’s a bad print, that will be disappointing since so much growth has already been baked in.”
Shares fell 0.9% on Tuesday, on track for their fifth straight negative session.
Salesforce’s previous report came in better than expected on key metrics, thanks in large part to AI, sparking a rally that took shares to a record. However, it failed to build on that rally, and is down 17% since that December release.
Last week was the worst for the stock since August, and shares closed at their lowest since November on Monday. The stock is down almost 9% this year, underperforming both the broader market and an index of software companies this year.
Despite that slump, the company is seen as well positioned to deploy AI agents into its software for such functions as customer service, scheduling, and lead scoring. It has been aggressive with the strategy, hiring workers to sell the product even as it cuts jobs elsewhere.
AI agent tools are proliferating; OpenAI released a research-focused one earlier this month. However, Wall Street is positive on Saleforce’s ability to capitalize. Morgan Stanley sees it “in the right place for the shift towards Agentic Computing,” while Scotiabank wrote that checks “highlighted a clear uptick in customers expanding their spend with Salesforce” as a result of Agentforce, although it caveatted that near-term growth “is still an open question” as many customers remain in the testing stage.
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Salesforce Stock Revival Hinges on Success of AI Agents
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