"Salesforce Inc. projected lackluster quarterly sales growth, suggesting its artificial intelligence product isn't yet paying off as quickly as hoped in the face of competition from emerging AI companies. Revenue will be $10.2 billion to $10.3 billion in the period ending in October, the company said Wednesday in a statement. Analysts, on average, estimated $10.3 billion. Current remaining performance obligations, a measure of bookings, will increase slightly above 10%, in line with analysts' average projections."
"Investors have been increasingly anxious that incumbent software makers will be outshined by new AI-based vendors. Companies like Salesforce, which make applications that are charged per user, have faced the steepest skepticism because of the view that AI will take over some of the tasks they provide and reduce the workforce of their customers. Investors will have to look at the qualitative Agentforce numbers and wait for the Dreamforce conference next month to increase their enthusiasm,"
"Salesforce is trying to get clients to use its Agentforce AI tool, which can complete tasks such as sales development and customer management without human supervision. The company launched the product late last year and said it has closed more than 6,000 paid deals since then. In May, Salesforce said the tool had $100 million in annual recurring revenue. The company didn't update that figure Wednesday."
Salesforce projected revenue of $10.2–$10.3 billion for the quarter ending in October, marginally below analysts' average estimate of $10.3 billion. Current remaining performance obligations are expected to rise slightly above 10%, aligning with consensus. Investor concern centers on competition from new AI vendors and skepticism that per-user software could be undermined by AI automation. Agentforce, launched late last year, has closed over 6,000 paid deals and had $100 million in annual recurring revenue as of May, with no update provided. Large and regulated customers are adopting AI more slowly; additional pricing options and sales hires aim to boost adoption. Shares fell about 6.8% in early trading and are down 23% year-to-date.
Read at www.mercurynews.com
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