Salesforce's stock falls as mixed earnings forecast fails to dispel AI gloom

By Christine Ji

Salesforce announces a $50 billion stock buyback and a new AI metric, but investors remain focused on the threat of AI disruption

Salesforce introduced Agentic Work Units as a new metric to measure the value added by AI to customers.

Salesforce's fourth-quarter results for fiscal 2026 were solid, but they weren't enough to shake off the looming overhang of artificial intelligence on the stock.

Shares of Salesforce (CRM) slipped 4.6% in after-market trading on Wednesday. Revenue for the quarter came out to $11.20 billion, growing 12% year over year and essentially matching the FactSet consensus view for $11.19 billion. Revenue grew 10% in constant currency and included $399 million from Informatica, which Salesforce acquired last year. Agentforce's annual recurring revenue reached $800 million, surging 169% from the prior year.

The company's current remaining performance obligations, or the amount of revenue expected in the next year from services not yet delivered, was $35.1 billion, surpassing the consensus of $34.5 billion. That marked an 16% year-over-year increase, or a 13% increase in constant currency. Total RPO was $72.4 billion, up 14% year-over-year.

The company also unveiled a new AI metric: Agentic Work Units, defined as one discrete task accomplished by an AI agent. While AI workloads are often measured in tokens, or fragments of text processed by large language models, AWUs quantify the amount of digital labor actually added by AI. The company revealed that it has consumed nearly 20 trillion tokens and delivered 2.4 billion AWUs to date.

"Tokens represent how many times you are pinging the LLM," Mike Spencer, VP of investor relations, told MarketWatch. "But it's not necessarily a representative of creating value for the customer."

More: Salesforce's stock has been hit hard by AI fears. Can anything in its earnings report turn things around?

"Agentic AI is a tailwind for our business, and we're well on our way to $63 billion in revenue" in fiscal 2030, CEO Marc Benioff said in the earnings release.

Salesforce's earnings announcement is taking on an unconventional format this quarter, with Benioff promoting an "earnings show" and appearing on TBPN (Technology Business Programming Network) beforehand. The CEOs of SharkNinja (SN), Wyndham Hotels & Resorts (WH) and SaaStr also joined Salesforce's earnings show to share their experiences with Salesforce.

Shares of Salesforce are down 25% year to date as the broader software sector relentlessly sells off on fears of AI disruption. On Wednesday, the company also announced a $50 billion share repurchase program and hiked its quarterly dividend nearly 6% to 44 cents a share, an action "reinforcing our commitment to delivering significant shareholder value," according to President and Chief Financial and Operating Officer Robin Washington.

"I have never seen performance like this. But this obviously is not a rational market," Benioff said on the earnings call, characterizing the share repurchases as a "great buying opportunity."

"If there is a SaaSpocalypse, I think it might be being eaten by the SaaSquatch," Benioff said, referring to software-as-a-service. "Because there are a lot of companies using a lot of SaaS, because SaaS just got a lot better with agents-as-a-service." Anthropic and other AI labs are all building their global operations on top of Salesforce and Slack, according to Benioff, who pointed out that Anthropic is hiring a Salesforce administrator.

However, Washington said on the call that revenue growth was hampered by "continued weakness in marketing and commerce" and "weaker-than-expected Tableau performance." Still, Salesforce is seeing incremental growth in the business year over year and quarter over quarter, Washington said.

For the current quarter, Salesforce issued guidance of $11.03 billion to $11.08 billion, exceeding analysts' estimates of $11.01 billion. Total revenue for the full 2027 fiscal year is expected to be between $45.80 billion and $46.20 billion. The projections imply a 10% to 11% increase from last year, as Salesforce posted $41.5 billion in total revenue for fiscal year 2026. The forecast also includes a three-percentage-point contribution from Informatica. Analysts had been anticipating $46.11 billion of revenue for the entire year.

Management said that organic revenue growth is expected to accelerate in the second half of this year. "Given the organic subscription guide of 8%, we are not surprised to see shares down a bit in the aftermarket," Evercore ISI analyst Kirk Materne wrote in a note following the earnings call. Reaccelerating organic subscription growth back to 10% will be critical for Salesforce to regain investor confidence, Materne added.

Read: ServiceNow CEO looks to call a bottom on software stocks with this $3 million move

-Christine Ji

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02-25-26 2035ET