Key Takeaways:
- Revenue of $11.13B missed $11.4B consensus, rising 13% YoY.
- Agentforce ARR hit $1.2B, up 205%, with AI revenue surging 200%.
- Company raised full-year guidance and launched a $25B buyback.
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Salesforce misses $11.4B revenue target as AI competition intensifies
Salesforce reported Q1 revenue of $11.13B, missing the $11.4B consensus, as AI competition pressures its core CRM business.
"Agentic AI is the biggest growth opportunity for our customers and for Salesforce," Chair and CEO Marc Benioff said.
Non-GAAP operating margin expanded to 34.8% from 32.3%, while GAAP net income rose 37% to $2.11B. Total remaining performance obligations came in at $67.9B, below the $68.9B consensus estimate.
The results highlight the challenge Salesforce faces as OpenAI and Anthropic push into enterprise software. Shares fell 1.4% after hours, extending a 33% year-to-date decline.
Agentforce, Salesforce's AI agent platform, emerged as the quarter's standout performer. The product reached $1.2B in annual recurring revenue, up 205% year over year. Combined with Data 360, AI and data-related ARR totaled about $3.4B, more than triple the prior year.
The company processed 3.8 billion agentic work units during the quarter, up 111% sequentially, and handled 28.6 trillion tokens, a 152% increase. Public sector agentic work units grew nearly 400% quarter over quarter.
Salesforce also announced a $25B accelerated share repurchase agreement, funded by about $24.8B in new debt. The buyback pushed non-current debt to $39.3B from $10.4B at the end of the prior fiscal year. The company held $8.9B in cash and $2.9B in marketable securities.
For the current quarter, Salesforce guided revenue of $11.27B to $11.35B, implying 10% to 11% growth. Full-year revenue guidance was raised to $45.9B to $46.2B, with non-GAAP operating margin held at 34.3%. Management reiterated confidence in organic revenue acceleration in the second half of the fiscal year.
The guidance raise suggests management expects AI demand to accelerate. Investors will watch the Q2 earnings call for updated Agentforce adoption metrics and margin trends.
This article is for informational purposes only and does not constitute investment advice.
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