Salesforce reported weaker-than-expected quarterly revenue on Wednesday, raising concerns among investors and leading to a 2% decline in its stock price during extended trading. The company introduced its second-generation Agentforce artificial intelligence (AI) technology, which answers employee questions in the Slack communications app. Despite this innovation, Salesforce's financial outlook failed to meet analyst expectations, casting uncertainty on its future earnings potential.
The tech giant revealed that revenue from its customer service products reached $2.33 billion, marking a notable increase. However, overall revenue for the quarter ending January 31 rose by only 7.6% from the previous year, falling short of analysts' forecasts. Adjusted earnings per share were expected to be between $2.53 to $2.55, with revenue ranging from $9.71 billion to $9.76 billion. This guidance did not align with LSEG analysts' predictions of $2.61 per share on $9.9 billion in revenue.
In addition, Salesforce's net income climbed to $1.71 billion, or $1.75 per share, compared to $1.45 billion, or $1.47 per share, from the previous year. The sales category generated $2.13 billion in revenue, representing an 8% increase. Nevertheless, the company's fiscal projections for 2026 estimated adjusted earnings per share between $11.09 and $11.17 on revenue between $40.5 billion and $40.9 billion, below the LSEG consensus of $11.18 per share on $41.35 billion in revenue.
Agentforce, the newly launched AI agent technology, has already engaged in 380,000 conversations through Salesforce's help website, with human intervention required in just 2% of cases. Since its debut in October, Salesforce has completed over 3,000 paid deals involving Agentforce, underscoring the technology's appeal and potential for adoption across industries.
Despite these achievements, Salesforce's financial outlook has left room for improvement as it navigates a challenging market environment. The company's focus remains on enhancing its product offerings to drive future growth and maintain its competitive edge.