Salesforce CEO Marc Benioff delivered the keynote at Dreamforce in San Francisco on Oct. 14, 2025.
Salesforce reported earnings that beat Wall Street expectations on Wednesday, and its revenue outlook for the fourth quarter lifted the stock 2% in after‑hours trading.
Key financial highlights versus LSEG consensus:
- Earnings per share: $3.25 adjusted vs. $2.86 expected
- Revenue: $10.26 billion vs. $10.27 billion expected
Revenue grew 8.6% YoY in the fiscal third quarter, which ended Oct. 31. Net income rose to $2.09 billion, or $2.19 per share, up from $1.53 billion, or $1.58 per share, a year earlier. The increase was bolstered by a $263 million gain from strategic investments. Adjusted earnings exclude stock‑based compensation.
During the quarter, the Tableau data‑analytics unit delivered a higher proportion of cloud services than the company had projected, according to Chief Operating and Financial Officer Robin Washington. Revenue from on‑premises Tableau and MuleSoft integration products was recognized upfront, rather than spread over time.
For the fiscal fourth quarter, Salesforce forecast adjusted earnings of $3.02‑$3.04 per share on revenue of $11.13‑$11.23 billion. LSEG analysts had expected $3.04 per share and $10.9 billion in revenue.
The guidance implies 11%‑12% revenue growth, with roughly three percentage points coming from the recent acquisition of Informatica—a data‑management platform purchased for about $8 billion in November. The outlook also reflects a continued shift to cloud‑based offerings for MuleSoft and Tableau, while marketing and commerce segments remain under pressure.
Salesforce’s shares have underperformed the broader tech sector this year, dropping 29% in 2025, compared with a roughly 21% gain in the Nasdaq. Market sentiment has been muted by concerns that generative AI could erode the competitive edge of some of Salesforce’s flagship products.
In the third quarter, the company added two AI‑focused startups to its portfolio: Regrello, which automates routine tasks with AI, and Waii, which generates code for data queries from natural‑language prompts. Salesforce also launched Agentforce, an AI‑driven platform that streamlines IT service‑request handling, and set a bold fiscal‑2030 revenue target of $60 billion—well above analyst estimates.
Agentforce’s annualized revenue surged 330% YoY to exceed $500 million, and the company reported more than 9,500 paid contracts, up from just over 6,000 in September.
Free cash flow grew 22% to $2.18 billion, though it fell short of the $2.24 billion consensus.
Strategic Implications and Outlook
1. AI Integration as a Growth Engine – Salesforce is positioning AI at the core of its ecosystem. The combined capabilities of Regrello, Waii, and Agentforce enable customers to automate both front‑office (sales, service) and back‑office (IT, data integration) workflows. This breadth could offset competitive pressure from pure‑play AI vendors such as OpenAI and Microsoft, which are rapidly embedding generative models into CRM‑like tools.
2. Cloud Migration Momentum – The shift from on‑premises to SaaS for Tableau and MuleSoft is accelerating. By recognizing on‑premises revenue upfront, Salesforce improves short‑term topline visibility, but the longer‑term health of the business hinges on recurring subscription growth. Analysts will watch churn rates and expansion‑revenue metrics closely over the next two quarters.
3. Informatica Acquisition – The $8 billion deal expands Salesforce’s data‑fabric capabilities, giving it a more complete view of customer information across silos. Successful integration could unlock cross‑selling opportunities, especially in regulated industries that demand robust data‑governance.
4. Competitive Landscape – SAP, Oracle, and Microsoft continue to invest heavily in AI‑enhanced CRM suites. Salesforce’s ability to maintain pricing power will depend on the tangible ROI that its AI add‑ons deliver. Early adoption metrics, such as reductions in service‑ticket handling time and increases in sales‑cycle velocity, will be critical proof points.
5. Financial Discipline – While revenue growth remains strong, free cash flow missed consensus, suggesting higher reinvestment in R&D and acquisitions. Investors should monitor operating cash‑flow conversion efficiency as the company scales its AI portfolio.
Overall, Salesforce’s third‑quarter performance underscores a transition phase: the firm is leveraging AI and data‑management acquisitions to fortify its cloud stack, but it must translate these investments into sustainable, high‑margin subscription revenue to regain investor confidence.
This is developing news. Please check back for updates.
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