(Bloomberg) — Salesforce Inc. gave a revenue outlook for the current period that just fell short of analysts’ estimates, unnerving investors already concerned about the possibility that artificial intelligence will disrupt the software business.
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Revenue will be about $11.3 billion in the fiscal second quarter, which ends in July, Salesforce said Wednesday in a statement. Analysts, on average, projected $11.4 billion. The company also reported fiscal first-quarter remaining performance obligations — a measure of future sales — were $67.9 billion, compared with analysts’ average estimate of $68.9 billion.
Salesforce, the leading maker of customer management software, is under pressure to show it can thrive in the AI era. The company is promoting Agentforce, its own AI tool that is meant to handle tasks such as customer service without human oversight. Still, the product’s capabilities don’t always match Salesforce’s marketing, Bloomberg News reported last week.
The shares slid about 2% in extended trading after closing at $177.51. The company’s stock has declined about 33% this year, a drop mirroring that of other application software companies such as ServiceNow Inc. and Adobe Inc.
Agentforce is now on track to contribute $1.2 billion of annual revenue, up from $800 million in February. Use of AI models within Salesforce’s platform has more than doubled compared to the prior quarter, the company said.
Customers are getting more comfortable with AI, which is helping to boost the company’s results, Executive Vice President Mike Spencer said in an interview. “We’re seeing a level of adoption and usage, and that’s anchoring the acceleration.”
For the quarter that ended April 30, revenue increased 13% to $11.1 billion. That result was aided by $444 million in sales tied to the November acquisition of data software firm Informatica. Profit, excluding some items, was $3.88 per share, compared with analysts’ average estimate of $3.13 a share, according to data compiled by Bloomberg.
The healthy results from Agentforce still aren’t boosting overall numbers, Raimo Lenschow, an analyst at Barclays, wrote in a note. “We are not sure this will be enough to drive a meaningful reaction.”
Salesforce continues to expect revenue growth to accelerate in the second half of the year, Chief Financial and Operating Officer Robin Washington said in the statement.
