Salesforce shares fall after weak Q3 sales forecast
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The news: Business software company Salesforce forecast third-quarter revenue below Wall Street estimates and said it has cut 4,000 customer support jobs due to AI, as its shares fell more than 4% in extended trading.
The company said it expects revenue between USD10.24 billion ($15.7 billion) and USD10.29 billion for the quarter ending in October, with the midpoint coming below analysts’ average estimate of USD10.29 billion.
The context: Shares are down more than 23% this year, amid broader economic uncertainty and growing investor unease about competition from AI-driven startups.
Its user-based pricing model is seen as especially exposed to AI replacing some of the tasks it supports.
CEO Marc Benioff said AI now handles 30% to 50% of the company’s work and has already led to 4,000 job cuts in customer support.
Salesforce is leaning into AI with products like Agentforce and plans to acquire data management firm Informatica in an USD8 billion deal.
The numbers: Second-quarter revenue was USD10.24 billion, up 10% from a year earlier and above expectations. Adjusted earnings per share were USD2.91, topping estimates.
Salesforce also raised its share buyback program by USD20 billion to USD50 billion and maintained its full-year revenue outlook while lifting its earnings forecast, but raised its EPS forecast to USD11.33 to USD11.37, up from the previous range of USD11.27 to USD11.33 announced in May.
The sources: Salesforce, CNBC
