Salesforce (CRM) reported earnings below estimates, but revenue and AI are driving optimism.
The company reported third-quarter adjusted earnings of $2.41 per share, falling short of analysts' expectations of $2.44. However, revenue outpaced projections, hitting $9.44 billion compared to the forecasted $9.35 billion. This marked an 8.3% year-over-year increase, driven by resilience in Salesforce’s core subscription services.
Despite the earnings miss, Salesforce shares surged nearly 10% to $368 in early Wednesday trading, reflecting investor enthusiasm for the company’s innovative AI platform, Agentforce. CEO Marc Benioff highlighted Agentforce’s transformative potential in reshaping industries with autonomous AI agents, propelling Salesforce into the forefront of AI-driven enterprise solutions.
Agentforce: The AI Revolution in Enterprise Solutions
Unveiled in September, Agentforce is Salesforce’s autonomous AI platform designed to enhance productivity in sales, marketing, and commerce. By leveraging 200–300 petabytes of Salesforce data, Agentforce delivers precise, personalized solutions in real-time, setting it apart from competitors like Microsoft’s (MSFT) Copilot.
Unveiled in September, Agentforce is Salesforce’s autonomous AI platform designed to enhance productivity in sales, marketing, and commerce. By leveraging 200–300 petabytes of Salesforce data, Agentforce delivers precise, personalized solutions in real-time, setting it apart from competitors like Microsoft’s (MSFT) Copilot.
Early adoption has been promising, with 200 deals already closed and a strong pipeline of opportunities. Analysts have hailed Agentforce as a game-changer, with Stifel calling Salesforce "the best way to play AI." Wedbush raised its price target for the stock to $425, citing Agentforce's potential to drive sustained growth.
Strong Performance Across Core Businesses
Salesforce’s growth extended beyond AI, with notable expansions in its core clouds. Subscription and support revenue rose by 9%, underpinned by strong average revenue per user (ARPU). Regional performance varied, with double-digit growth in the EMEA and APAC regions, while Americas showed moderate gains. Key industries such as healthcare, manufacturing, and energy also delivered robust results.
The company’s current remaining performance obligation (cRPO), a key indicator of future revenue, reached $26.4 billion—a 10% increase year-over-year and above Wall Street expectations. Salesforce’s multi-cloud strategy continues to gain traction, with its top 25 deals involving an average of five or more clouds.
A Bright Future for Salesforce and AI
As generative AI reshapes the software landscape, Salesforce is well-positioned to capitalize on this trend. With its revised fiscal 2025 revenue guidance now between $37.8 billion and $38 billion, the company is poised for continued expansion. Analysts remain bullish, underscoring the momentum generated by Agentforce and Salesforce’s enduring market leadership in customer relationship management.
Investors’ confidence in Salesforce reflects its ability to innovate and adapt in a rapidly evolving technological environment, solidifying its role as a leader in AI-powered enterprise solutions.
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