Salesforce announced higher-than-anticipated earnings on Wednesday, exceeding Wall Street’s expectations regarding its revenue forecast for the fourth quarter. The stock increased by 2% in after-hours trading.
This is how the company performed against LSEG consensus:
- Earnings per share: $3.25 adjusted compared to $2.86 expected
- Revenue: $10.26 billion versus $10.27 billion expected
Revenue rose by 8.6% year-over-year in the fiscal third quarter ending on October 31, according to a statement. Net income grew to $2.09 billion, or $2.19 per share, up from $1.53 billion, or $1.58 per share, in the same quarter last year, fueled by a $263 million gain from strategic investments.
Adjusted earnings per share do not include stock-based compensation.
The Tableau data analytics segment exhibited a greater proportion of cloud services than anticipated during the quarter, remarked Robin Washington, Salesforce’s chief operating and financial officer, in a conference call with analysts. Revenue from on-premises Tableau and MuleSoft app integration products is recognized in the current quarter, rather than across a duration.
For the fiscal fourth quarter, Salesforce projected adjusted earnings per share of $3.02 to $3.04, with revenue expectations ranging from $11.13 billion to $11.23 billion. Analysts surveyed by LSEG had anticipated $3.04 per share and $10.9 billion in revenue.
The guidance suggests revenue growth of between 11% and 12%, with approximately 3 points derived from Informatica, the data management firm Salesforce acquired for around $8 billion in November. Concurrently, the guidance considers the ongoing transition to the cloud for MuleSoft and Tableau, alongside persistent weakness in marketing and commerce products, Washington noted.
Salesforce’s stock has significantly lagged behind the broader tech sector this year, partly due to worries regarding the potential of artificial intelligence to supplant some of its product functionalities. As of Wednesday’s close, the shares are down 29% in 2025, while the Nasdaq has risen by roughly 21%.
During the fiscal third quarter, Salesforce acquired startups Regrello, which provides AI software for task performance, and Waii, which utilizes AI to generate code for executing queries on data from minimal human input. The company also launched Agentforce AI software to handle IT service requests, and set a $60 billion fiscal 2030 revenue target, exceeding analysts’ expectations.
Annualized revenue from Agentforce, which automates sales and customer service processes, soared by 330% year-over-year to over $500 million. Salesforce indicated it has secured over 9,500 paid agreements thus far, up from over 6,000 as of September.
Free cash flow increased by 22% to $2.18 billion, although the total fell short of StreetAccount’s $2.24 billion consensus.
This is developing news. Please check back for updates.
