Salesforce Inc. gave an outlook for revenue in the current period that topped analysts’ estimates, suggesting the software company is persuading customers to buy its AI tools.
Revenue will be $11.1 billion to $11.2 billion in the period ending in January, the company said Wednesday in a statement. Analysts, on average, estimated $10.9 billion. Current remaining performance obligations, a measure of bookings, will increase about 15%, compared with analysts’ estimates of a 10% rise.
The revenue forecast includes 3 percentage points of growth from Informatica, a data integration software maker that Salesforce acquired last month in an $8 billion deal. The outlook for current remaining performance obligations includes 4 percentage points from Informatica.
The largest maker of software to track customer relationships is trying to push adoption of Agentforce — its AI tool that can complete tasks such as sales development and customer service without human supervision. Still, use has been largely limited to experimentation, in part due to customer confusion over pricing and disorganized data, wrote Derrick Wood, an analyst at TD Cowen, ahead of earnings.
Salesforce Chief Executive Officer Marc Benioff touted adoption of the AI tool, saying “our Agentforce and Data 360 products are the momentum drivers.”
Agentforce launched last year, and the company said it has closed more than 9,500 paid deals since then, an increase from 6,000 in the prior quarter.Annual recurring revenue for Salesforce’s division that includes AI-focused tools such as data organization and agents was $1.4 billion in the period ended Oct. 31, the company said.
The shares gained about 8% in extended trading after closing at $238.72 in New York. The stock has dropped 29% this year through Wednesday’s close as investors have grown concerned about AI disrupting incumbent application software makers.
In the fiscal third quarter, Salesforce reported that revenue increased 8.6% to $10.3 billion. Profit, excluding some items, was $3.25 per share. Analysts, on average, estimated adjusted earnings of $2.86 a share on $10.3 billion revenue, according to data compiled by Bloomberg. The current remaining performance obligation was $29.4 billion, while analysts expected $29.1 billion.
Earnings, excluding some items, will be $3.02 a share to $3.04 a share in the period ending in January. Analysts, on average, estimated $3.03.
For the full year ending in January, adjusted operating margin will be about 34%, in line with estimates.