Salesforce misses on revenue, issues disappointing guidance
Salesforce CEO Marc Benioff appears at the World Economic Forum in Davos, Switzerland, on Jan. 23, 2025.
Halil Sagirkaya | Anadolu | Getty Images
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:
- Earnings per share: $2.78 adjusted vs. $2.61 expected
- Revenue: $9.99 billion vs. $10.04 billion expected
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%.
Lisa Su, president and CEO of AMD, talks about the AMD EPYC processor during a keynote address at the 2019 CES in Las Vegas, Nevada, U.S., January 9, 2019.
Steve Marcus | Reuters
AMD said on Wednesday that its board of directors approved $6 billion in share buybacks. The stock climbed 6%.
The authorization is in addition to $4 billion in existing approved share repurchases, the company said.
“Our expanded share repurchase program reflects the Board’s confidence in AMD’s strategic direction, growth prospects, and ability to consistently generate strong free cash flow,” AMD CEO Lisa Su said in a statement.
AMD, the most important artificial intelligence chip company aside from Nvidia, reported 96 cents in earnings per share on $7.44 billion in revenue in its fiscal first quarter.
AMD announced a deal potentially worth $10 billion in investment on Tuesday to support an AI company called Humain in Saudi Arabia with chips. Su was in Saudi Arabia this week to announce the deal.
AMD said that it would provide graphics processors for AI as well as central processors needed to build AI servers to Humain, which is also buying Nvidia processors. Bank of America analyst Vivek Arya added $10 to his price target for AMD, bringing it to $130 per share, on the news.
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