Salesforce Sees Stable Growth Despite Wall Street’s AI Concerns
The company expects annual revenue of $45.8 billion to $46.2 billion in the new fiscal year
- Salesforce expects current fiscal year revenue growth to match about the same rate as it did the year before, amid investor concerns about AI’s threat to software.
- The company reported a profit of $1.87 billion and revenue of $11.20 billion for the quarter ended Jan. 31.
- Annual recurring revenue from Salesforce’s AI product Agentforce reached $800 million in the quarter, up from $540 million the quarter before.
Salesforce CRM 3.41%increase; green up pointing triangle expects revenue to grow in the current fiscal year at about the same rate as it did the year before, as investors worry about AI’s threat to software.
Chief Executive Marc Benioff told investors on a call Wednesday he wasn’t fazed by the selloff across software companies in recent weeks, which was driven by concerns that AI companies would replace software services. He said the stock’s price—which hit a three-year low earlier this month—created the opportunity to authorize a $50 billion share buyback.
“This is not our first SaaS-pocalypse,” Benioff said, referring to software-as-a-service. “We are going to make it through this one as well, so this is a great marketing opportunity and a great buying opportunity.”
The new buyback will replace all previously unused authorizations, Salesforce said.
In the new fiscal year, Salesforce expects annual revenue to be $45.8 billion to $46.2 billion, while analysts were projecting $46.11 billion. The company expects adjusted earnings per share to be $13.11 to $13.19, while the consensus estimate from Wall Street was $13.15.
At the midpoint, the full-year revenue guidance would represent roughly 10% growth, in line with the 10% sales increase Salesforce logged in the just-ended fiscal year.
The stock fell 5% to $181.25 in after-hours trading.
Benioff highlighted the growth of Salesforce’s AI product Agentforce, which made its debut in the fall of 2024. He said more companies, including SharkNinja and Wyndham Hotels & Resorts, are adding agents at a rapid pace and turning to Agentforce to do that work for them.
Agentforce reached $800 million in the quarter, up from $540 million the quarter before. Salesforce said it closed 29,000 deals during the quarter, a 50% jump from the third quarter. Agentforce made its debut in the fall of 2024.
“If there is a SaaS-pocalypse, it may be eaten by the SaaS-quatch because there are a lot of companies using a lot of SaaS because it just got better with agents-as-a-service,” Benioff said.
Even before February’s software selloff, investors have been questioning Salesforce’s ability to stay relevant in the age of AI. Agentforce has been growing, but some investors worry it isn’t catching on fast enough. Despite consistently beating estimates with its financial results last year, Salesforce shares have lost 38% of their value in the past 12 months.
Revenue rose 12% to $11.20 billion in the fourth quarter. Analysts surveyed by FactSet forecast revenue of $11.19 billion.
Salesforce posted a profit of $1.87 billion, or $2.07 a share, compared with $1.82 billion, or $1.75 a share, a year earlier. Adjusted per-share earnings were $3.81, ahead of the $3.05 anticipated by analysts, according to FactSet.
In the current quarter, Salesforce anticipates revenue of $11.03 billion to $11.08 billion, ahead of the $11.0 billion analysts expected. Adjusted earnings per share are set to be $3.11 to $3.13, also ahead of Street estimates of $3.01.