A small amount of air was released from the balloon, which was Salesforce (CRM) stock. Wednesday’s after-hours trading saw a 5% decline in Salesforce shares after the company’s 2025 earnings per share forecast fell short of expectations. Due to anticipation about the financial effect of Salesforce’s new Agentforce technology, the stock had risen 16% in the six months before the results announcement.
Once management informed investors on the results call that Agentforce will have a “modest” impact on sales in 2025, the stock’s after-hours decline accelerated. In 2026, a more “meaningful” contribution is anticipated. A higher US currency will affect This year’s revenues by $200 million.
Marc Benioff, the CEO, chairman, and co-founder of Salesforce, told me the firm might exceed its operating margin projections for this year. He pointed out that the advice is wise considering the company’s recurring income model and Agentforce is in its infancy.
“We’ll have a great year,” said Benioff. Salesforce reported that over 3,000 of the 5,000 Agentforce agreements it has made since have been paid. Artificial intelligence and data cloud recurring income more than quadrupled annually.
Given the impending CFO transfer and the difficulties in professional services, leap year, and F/X, it is not surprising to see a “prudent” guide [guidance] – bears may do a victory lap on the first quarter sales guide, said Evercore ISI analyst Kirk Materne in a client note. However, generally speaking, we believe the story will stay primarily unchanged: Salesforce’s key to 2025 will be demonstrating faster growth throughout the year, growing Agentforce use, and further improving the operating margin target.
- Net sales: $10 billion (+8% annually) compared to the estimated $10.04 billion (recommendation: $9.9 billion to $10.1 billion).
- Remaining performance obligations as of right now: $30.2 billion (+9% year over year) vs the estimated $30.12 billion
- Adjusted operating margin: 32.8% projected vs 33% (compared to 31.2% a year ago).
- Diluted profits per share: $2.78 (+21.4%) compared to the forecast of $2.61 (recommendation: $2.57 to $2.62).
The timing of software firms’ earnings shift toward the AI age is intriguing. At best, 2025 has witnessed a mixed bag of trading for the AI darlings inside the “Magnificent Seven”: Meta (META), Amazon (AMZN), Google (GOOG), Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), and Tesla (TSLA). This year, the S&P 500 (^GSPC) has only been significantly outperformed by Meta, one of the large-cap tech components. Shares are up 16% this year despite a 4% sell-off during the last five sessions.
AI sweetheart, due to a sell-off ahead of this evening’s report, Nvidia has been down 6% this year. This year, Tesla’s decline has now reached 25%. Conversely, software profits have been substantial, and the stocks have gained value. Following today’s closing, Snowflake (SNOW) shares surged 12% due to a more optimistic outlook.
After a better-than-expected quarter late Tuesday, ZoomInfo’s (ZI) stock jumped more than 23% Wednesday. On Yahoo Finance’s Opening Bid podcast, I learned that Henry Schuck, the company’s founder and CEO, is a stock buyer. On Tuesday evening, Workday’s (WDAY) quarter and forecast exceeded expectations. Today’s session saw a 6% increase in the stock.
