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United States Salesforce’s disappointing guidance overshadows earnings beat, stock slips 4%
Salesforce Inc.’s stock initially slipped 4% in after-hours trading Wednesday after the company racked up revenue and earnings that topped analysts’ estimates. It also provided updates on its recently released Einstein artificial-intelligence platform and on its cost-cutting moves.
The company also disclosed a dividend of 40 cents and a $10 billion stock buyback program. But a tepid fiscal 2025 revenue guidance was dinging Salesforce shares.
“We’re thrilled to initiate our first-ever Salesforce dividend and increase our share buyback plan by $10 billion,” Salesforce Chief Executive Marc Benioff said in a statement announcing the results.
In a conference call with analysts later, Benioff staked Salesforce’s claim as the No. 1 AI enterprise company during the “most important” time in tech history. He said the Einstein AI Copilot is scheduled to go live on Thursday.
The cloud-based software company CRM, +0.09%, a key barometer for enterprise-software spending, reported fiscal fourth-quarter net income of $1.45 billion, or $1.47 a share, compared with a net loss of $98 million, or 10 cents a share, in the same quarter a year ago. Adjusted earnings were $2.29 a share.
Revenue improved 11% to $9.29 billion from $8.4 billion in the year-ago quarter.
Analysts surveyed by FactSet had expected on average net income of $2.27 a share on revenue of $9.2 billion.
Salesforce offered full-year fiscal 2025 revenue guidance of $37.7 billion to $38 billion, short of the FactSet projection of $38.65 billion.
Heading into the quarterly report, analysts were cautiously optimistic. Jefferies’ Brent Thill expected “modest improvement in demand” as manufacturing and tech verticals rebound while public-sector demand remains strong.
“The market wants to hear meaningful customer adoption of [Salesforce’s] gen-AI tools and I expect Salesforce to provide an update on its progress while also continuing to note its focus on operational efficiency and tightly managing headcount as costs will be watched carefully,” Daniel Newman, CEO of the Futurum Group, said in an email.
Shares of Salesforce have rocketed 79% over the past 12 months to a near-record high, while the broader S&P 500 index SPX is up 28%.
