Salesforce shares dip on soft revenue outlook as AI disruption concerns linger

By Christine Ji and Hannah Pedone

While the company's Agentforce offering is picking up steam, Salesforce doesn't deliver the top-line growth investors wanted to see

Shares of Salesforce fell after hours on Wednesday after the company reported earnings.

Salesforce's mixed April-quarter results didn't give investors a definitive answer regarding whether or not the company could buck the software selloff and remain competitive in an AI-first market.

Shares of Salesforce (CRM) fell 1.3% after hours Wednesday following the report. For the first fiscal quarter of 2027, Salesforce reported revenue of $11.1 billion, in line with FactSet consensus estimates. That marked a 13% year-over-year increase, or 12% in constant currency.

Salesforce reported earnings that rose 50% from a year ago to $3.88 a share, surpassing Wall Street estimates of $3.13. The boost to earnings was partially influenced by Salesforce's share-buyback policy, which the company announced on its last earnings report.

The $50 billion buyback is one of the largest ever announced, and was initiated to take advantage of Salesforce's discounted stock price. Salesforce said it spent $27.1 billion on share repurchases during the April quarter.

The strategy is "strongly based on the dislocation we saw in the market," Mike Spencer, Salesforce's head of finance, told MarketWatch. "We really feel like our shares are undervalued," he added, highlighting that the company remains on track to exceed $63 billion of revenue in fiscal 2030.

More: Salesforce's record $50 billion stock-buyback plan is proving controversial on Wall Street

For the current quarter, Salesforce guided for revenue between $11.27 billion and $11.35 billion, coming in a hair short of analysts' estimates of $11.351 billion. The company raised the midpoint of its full-year revenue guidance for the 2027 fiscal year, projecting between $45.9 billion and $46.2 billion. Previously, the company had guided for $45.8 billion of revenue on the low end, but analysts were expecting $46.1 billion.

Salesforce CEO Marc Benioff said in a statement that the quarter was "outstanding," with "record" revenue. He called agentic AI the "biggest growth opportunity" for customers and the company.

The company expects to see organic revenue acceleration in the second half of the fiscal year, which Spencer believes will be driven significantly by Agentforce.

Growth in Agentforce was encouraging: Agentforce's annual recurring revenue reached a new milestone last quarter, growing 205% year over year to $1.2 billion. More than half of Agentforce and Data 360 bookings came from existing customers in the first quarter, the company said.

The company said that Agentforce is now powering "every Customer 360 application and helping tens of thousands of businesses across every industry transform into Agentic Enterprises."

However, another metric investors were monitoring for AI traction fell flat. Current remaining performance obligations, or the value of signed contracts expected to convert into revenue within the next 12 months, came out to $33.6 billion, slightly below consensus estimates of $33.7 billion.

Read: ServiceNow's stock notches best day in a year - flashing a green light for the software sector

-Christine Ji -Hannah Pedone

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05-27-26 2023ET