Salesforce's Revenue Outlook Falls Short of Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 17 hours ago
0mins
Source: Yahoo Finance
- Revenue Outlook Miss: Salesforce's forecast for Q2 revenue at approximately $11.3 billion falls short of the $11.4 billion expected by analysts, raising concerns that the AI transition may disrupt the software business faster than anticipated.
- Decline in Future Sales Obligations: Remaining performance obligations reached $67.9 billion in Q1, below the $68.9 billion analysts expected, indicating potential pressure on future sales growth and impacting long-term performance.
- Strong Q1 Performance: Despite the disappointing outlook, Salesforce reported a 13% year-over-year revenue increase to $11.1 billion for Q1, bolstered by $444 million in sales from the Informatica acquisition, demonstrating robust short-term profitability.
- Agentforce Revenue Growth: The AI tool Agentforce is projected to generate $1.2 billion in annual revenue, up from $800 million in February, although its momentum may not yet be sufficient to alleviate concerns regarding overall software growth.
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Analyst Views on CRM
Wall Street analysts forecast CRM stock price to rise
39 Analyst Rating
29 Buy
9 Hold
1 Sell
Moderate Buy
Current: 176.170
Low
223.00
Averages
326.40
High
405.00
Current: 176.170
Low
223.00
Averages
326.40
High
405.00
About CRM
Salesforce, Inc. is a customer relationship management (CRM) technology company. Its artificial intelligence (AI) powered Agentforce 360 Platform offers sales, service, marketing, commerce, collaboration, data management, integration, analytics, and information technology (IT) service solutions. It enables customers to build and deploy digital labor for employees and customers, leveraging autonomous AI agents across business functions. Its service offerings include Agentforce Sales, Agentforce Service, Agentforce 360 Platform, Slack and Others. The Agentforce Sales provides sales capabilities and tools built for organizations across prospecting, sales engagement, team collaboration, sales analytics and AI, sales programs, sales performance, partner management, and revenue and orders. The Agentforce Service provides field service solutions that enable companies to connect service agents, dispatchers and mobile employees through platform to schedule, dispatch and manage jobs.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Overlooking Obvious Opportunities: Cramer believes that investors often dismiss opportunities because the investment thesis seems too obvious, particularly in the AI space, where other companies like Salesforce, Oracle, and Microsoft could also benefit from successful AI strategies.
- Profitability of AI Leaders: Unlike the speculative companies during the 2000 internet bubble, Cramer asserts that today's AI leaders are largely profitable businesses generating substantial earnings and cash flow, urging investors not to overlook this market opportunity.
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