Salesforce Earnings Report: Weaker-Than-Expected Quarterly Revenue and Forecast

Image credits: Justin Sullivan/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. The company's 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. The company's artificial intelligence technology is expected to make a modest contribution to revenue in fiscal 2026, with a larger effect in the following year.

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. The company's cloud computing technology is expected to play a key role in its future growth.

Some of the key features and specifications of Salesforce's Agentforce technology include: * Second-generation artificial intelligence agent technology * Answers employee questions in the Slack team communications app * Completed more than 3,000 paid deals involving Agentforce since October * Gotten involved in 380,000 conversations through Salesforce’s help website * Humans getting involved in 2% of cases. The company's CEO, Marc Benioff, said that the company will work closely with the government to help them succeed. The U.S. Department of Government Efficiency is using Slack, and the company will do anything it can to help them succeed.

Salesforce's earnings report comes at an interesting time for the technology industry, with many companies pivoting towards the AI era. The company's stock has been affected by the weaker-than-expected quarterly revenue and forecast, but the company remains optimistic about its future growth. The company's Agentforce technology is expected to play a key role in its future growth, and the company is targeting $11.09 to $11.17 in adjusted earnings per share on $40.5 billion to $40.9 billion in revenue for fiscal 2026. As the company continues to invest in its AI technology, it is expected to remain a major player in the cloud computing industry.