Salesforce delivered better-than-expected fourth quarter results powered by its Agentforce AI platform, but investors still sent shares down over concerns that artificial intelligence could disrupt the entire enterprise software sector.
Revenue for the quarter ended January 31 rose 12 percent year-over-year to $11.2 billion, topping analyst expectations of $11.18 billion according to LSEG data. Adjusted earnings per share reached $3.81, beating consensus estimates by 77 cents and marking a 37 percent increase from the same period last year.
Despite these results, Salesforce stock fell roughly 4.5 percent in after-hours trading to about $183, not far from its 52-week closing low of $178.16. The decline reflects persistent investor anxiety about AI's potential to upend traditional software business models even as companies like Salesforce successfully integrate the technology into their own offerings.
Agentforce has become a growth driver since its launch last October, closing more than 29,000 deals and reaching an annual recurring revenue run rate of $800 million according to company disclosures during Wednesday's earnings call.
The AI-powered platform represents what industry observers call "the most credible threat yet" to ServiceNow's dominance in IT service management (ITSM). Early customer PenFed Credit Union projects a 30 percent reduction in operating costs and $2 million in savings through Agentforce implementation.
"Salesforce is a 'SaaSquatch' set to capitalize on enterprise AI adoption,"
CEO Marc Benioff said during Wednesday's earnings presentation, dismissing concerns about a broader "SaaSpocalypse" affecting software-as-a-service providers.
Full-year revenue reached $41.5 billion, exceeding the company's guidance range of $40.5 to $40.9 billion provided a year ago for seven to eight percent growth.
The company announced several shareholder-friendly measures alongside its results, including a new program to repurchase up to $50 billion in stock and a 5.8 percent increase in quarterly dividend to 44 cents per share.
Current remaining performance obligations, a measure of contracted revenue expected within the next twelve months, came in at $35.1 billion according to Morgan Stanley analyst Keith Weiss, who described the figure as "disappointing" relative to expectations for stronger forward-looking metrics.
Salesforce also disclosed that organic revenue growth was approximately $200 million when excluding contributions from its recent Informatica acquisition, which added $399 million to total revenue figures.
