Salesforce’s shares rose 9% Tuesday following the company’s reporting of better-than-expected fiscal third-quarter earnings and fourth-quarter guidance. The company also upped the bottom line for revenue guidance to fiscal 2025 and nudged it very slightly above analysts’ collective estimate.
Third Quarter Results
Total revenue also rose 8% in the company’s third quarter (ended Oct. 31) to $9.44 billion. But for the quarter, the company earned $1.5 billion in net income, up 25% from $1.2 billion in 2008.
Fourth Quarter Expectations
Analysts were expecting $10.05 billion in sales, and Salesforce expects sales in the range of $9.90 billion to $10.10 billion in the fourth quarter. For the fourth quarter, the company expects earnings per share in the range of $2.57 to $2.62, slightly below analysts’ expectations of $2.65.
Future plans
The company raised its revenue bottom line for its fiscal year 2025 to $37.8 billion to $38 billion, slightly ahead of analyst expectations of $37.86 billion. Salesforce CEO Marc Benioff said in a statement that ‘We delivered another quarter of exceptional financial performance across revenue, margins, cash flow, and cRPO.’
The role of AI and Agentforce
Coordinating a startup that relied on artificial intelligence, like Agentforce, for chatbot service to the Salesforce platform gave Benioff the opportunity to proudly tout Salesforce’s latest AI work. “We’re also delivering these Agentforce capabilities.” He said this is a bold step into the future of work where AI agents help humans replace customer interactions.
Personal events
On his recent birthday, Benioff also admitted to damaging his Achilles tendon during a scuba diving trip in Fakarava, French Polynesia. He also said that the hospital that treated him could not use AI agents to schedule his forthcoming appointments.
Leadership changes
In August, the company said that chief financial officer Amy Weaver would resign but would continue in that position until a successor is appointed. The same month, activist investor Starboard Value said it had increased its stake in Salesforce to almost 40%.
Conclusion
Salesforce came out ahead of analysts’ expectations in its third quarter as well as its fourth quarter. The company’s latest AI and AgentForce initiatives could make its future even prettier. What also becomes clear, looking at the company’s success and growing revenue rates, is that Salesforce is off to the right path.
The company’s leadership changes and investments in AI technology have led it to become more competitive and profitable. In the future, these strategic moves by Salesforce will further strengthen its stability and ability to innovate.
FAQs
Q. How did Salesforce’s stock perform after the earnings report?
A. Following the better-than-expected fiscal third-quarter earnings and fourth-quarter guidance, Salesforce’s shares rose by 9%.
Q. What were Salesforce’s third-quarter earnings for the fiscal year?
A. Salesforce reported total revenue of $9.44 billion for the third quarter, which ended on October 31, and earned $1.5 billion in net income, an increase of 25% from $1.2 billion in 2008.
Q. What are Salesforce’s expectations for the fourth quarter?
A. Salesforce expects sales in the range of $9.90 billion to $10.10 billion for the fourth quarter, with earnings per share projected between $2.57 and $2.62, slightly below analysts’ expectations of $2.65.
Q. How has Salesforce adjusted its revenue guidance for fiscal year 2025?
A. Salesforce raised its revenue guidance for fiscal year 2025 to a range of $37.8 billion to $38 billion, which is slightly ahead of the analyst expectations of $37.86 billion.
Q. What initiatives is Salesforce pursuing in relation to artificial intelligence?
A. Salesforce is advancing its AI initiatives, including the introduction of Agentforce, which leverages AI technology to enhance customer interactions and support human agents in their roles.
