[NEW YORK] Salesforce is projected to have a low gloss for quarterly sales growth, suggesting that its artificial intelligence (AI) products are not rewarded as quickly as expected in competition with emerging AI companies.
The company said on Wednesday (September 3) that its revenues would range from US$10.3 billion, from US$10.3 billion. Analysts estimated an average of US$10.3 billion. The current remaining performance obligation, a measure of reservation, increases “slightly” by more than 10%, along with the analyst average forecast.
Investors are increasingly worried about the current software maker reaching new AI-based vendors. Companies such as Salesforce, which create apps that are billed per user, face the most steep skepticism due to the view that it will take over some of the tasks it provides and reduce the customer's workforce.
“Investors need to look at qualitative Agent Force numbers and raise enthusiasm to wait for next month's Dream Force meeting,” Barclays analyst Raimo Renshaw wrote in a note after the results.
Salesforce is trying to get clients to use the AgentForce AI tool. This allows you to complete tasks such as sales development without human supervision. The leading customer management software provider launched its product late last year and said it has since shut down more than 6,000 paid transactions. In May, Salesforce said the tool had a recurring annual revenue of US$100 million. The company did not update that figure on Wednesday.
It takes time for large businesses and regulated industries to feel comfortable implementing AI tools, Chief Financial and Executive Officer Robin Washington said in an interview after the results were released. Salesforce added more pricing options and hired additional salespeople to help with fuel adoption, she said.
Stocks fell approximately 4.5% in long-term trading after closing at US$256.45 in New York. In a memo before the results were released, shares fell 23% this year until the end of Wednesday, as “AI confusion stories grow loudly.”
Second quarter revenues rose 9.8% to US$10.2 billion. The remaining performance obligations currently rose 11% to US$29.4 billion. Profit except for some items was USD 2.91 per share. Analysts estimated earnings of USD 2.78 per share with revenues of USD 10.1 billion, according to data compiled by Bloomberg.
The company also announced it would add US$20 billion to its existing stock repurchase program, increasing its approved total to US$50 billion. Bloomberg
