🌐Salesforce disappoints, weak earnings and outlook send stock down!
Salesforce $CRM is a global leader in cloud-based customer relationship management (CRM ) solutions . Its platform enables companies to effectively manage sales, marketing, customer support and business process automation.
While the company beat earnings estimates in its most recent quarter, it fell short of revenue expectations. The company's outlook for the next quarter was disappointing, and the stock responded by falling more than 4 %, which has now been partially erased.
Key financial results:
✅ Earnings per share (EPS): $2.78 (Expectation: $2.61)
❌ Revenue: $9.99 billion (expectations: $10.04 billion)
📉 Year-over-year revenue growth: 7.6%
Subscriptions and support division accounted for the largest share of revenue with $8.33 billion (+8% YoY), which was below analyst consensus. Similarly, the sales segment brought in $2.13 billion, also below market expectations.
📌 A forecast that did not please.
Salesforce's outlook for the next quarter and fiscal year 2026 didn't impress much. The company expects:
1Q26 EPS: $2.53-$2.55 (analysts were expecting $2.61)
1Q26 revenue: $9.71-9.76 billion (market estimate: $9.9 billion)
FY26 EPS: $11.09-11.17 (expectations: $11.18)
FY26 revenue: USD 40.5-40.9 billion (+7.4% YoY, market estimate: USD 41.35 billion)
⚡ AI and next generation Salesforce products
The company continues to bet on AI and introduced Agentforce, an artificial intelligence tool for workflow automation. Since October, Salesforce has closed over 3,000 paid contracts with the technology, which has already helped handle 380,000 conversations. CEO Marc Benioff says AI agents will become a key part of enterprise software, but their impact will only be seen in sales in the coming years.
Salesforce faces stiff competition, especially from ServiceNow $NOW in IT Service Management. CEO Benioff also pointed out that the company works closely with the US government, which uses Slack. Given that Salesforce has been aggressive in acquisitions in recent years (Slack, Tableau, Mulesoft), it is expected to focus on profitability rather than expansion in the future.
📉 Salesforce shares are down more than 9% this year, and the price has fallen more than 15% since the highs.
Does Salesforce still have growth potential? Does anyone have shares of this tech company in their portfolio?
I have a smaller position and I'm happy, but I won't be increasing my position.
I'd rather bet on $AMZN out of this industry. Amazon is outbidding a lot of companies now and in the end is better at almost everything .
The results were not bad, but the company has quite a lot of competition and that can be a problem.