Salesforce reported better than-expected second-quarter results but revenue growth was up 8%. CFO Amy Weaver will also step down.
The company reported second quarter net income of $1.43 billion, or $1.47 a share, on revenue of $9.32 billion. Adjusted earnings were $2.56 a share.
Wall Street was expecting Salesforce to report earnings of $2.36 a share on revenue of $9.23 billion. Wall Street is expecting Salesforce to report single digit revenue growth rates for the foreseeable future.
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As for the outlook, Salesforce said third quarter revenue will be $9.31 billion to $9.36 billion, up 7%. Full year revenue will be $37.7 billion to $38 billion.
Salesforce CEO Marc Benioff said the company is operating with discipline and boosting operating margins. “With our new Agentforce AI platform, we’re reimagining enterprise software for a new world where humans with autonomous Agents drive customer success together,” said Benioff.
Weaver will remain CFO of Salesforce until a successor is found, the company said.
By the numbers for the second quarter:
- Sales Cloud revenue was up 10% from a year ago.
- Service Cloud revenue was up 11% from a year ago.
- Platform and other was up 10% from a year ago with marketing and commerce up 7%.
- Integration and analytics was up 14%.
Key points from Benioff on the conference call:
- Multi-cloud deals accounted for close to 80% of new business in the quarter.
- There were 25 trillion Einstein transactions across Salesforce clouds.
- AI is top of mind, but customers are overthinking it.
Benioff elaborated on the do-it-yourself genAI trend. He said:
"I think that there's a lot of misconceptions about AI with my customers. I have been very disappointed with the huge amount of money that so many of these customers have wasted on AI. They are trying to DIY their AI. It's not unlike when we first saw cloud emerge. Customers feel like have to roll their own, build it themselves, get in the weeds, and try to figure to figure it out. This is a moment where every customer is needs to realize you don't need the DIY your AI. You can use a platform like Salesforce to get the highest efficacy of artificial intelligence."
The bet on Agentforce
Speaking on the earnings call, Benioff said genAI is positioning the company for the future and AgentForce is going to drive growth. Benioff said:
"Dreamforce is really becoming Agentforce," said Benioff. "I think this is going to be a moment that everyone is going to have to see in person understand what is going on. We're going to show Agentforce and how we've reimagined enterprise software for this new world of autonomous AI."
Benioff said:
"We're building the agents for Workday, and we're going to be building custom agents for so many of you as well. Agentforce is a development platform, as well as this incredible capability to radically, extend your sales and service organizations. We're all going to have Agentforce and we're going to have them at scale automating the entire workflow on their own."
Constellation Research analyst Martin Schneider said Agentforce represents a new foray for Salesforce. In a blog post, he said:
"The announcement hints at a demarcation point in Salesforce's AI strategy. To reduce it to simple terms, the company has now entered the automated and autonomous phase; as it has evolved from Einstein insights, to generative AI copilots, to these new agents. And to be clear, Salesforce is intently pointing out that these are NOT "bots." These new agents are more outcome oriented, and are designed to handle far more complex and personalized interactions that your typical web chatbot. These agents should, in theory, have far more data points to work with to make this a reality."
Jabs at Microsoft
Benioff said Agentforce can win over enterprises--especially those disappointed with Microsoft Copilots. He said:
"With our new Agentforce platform, we're going to make quantum leap forward in AI. I want you to have your hands on this technology to really understand this. This is not about copilots. So many customers are so disappointed at what they bought from Microsoft with Copilots because they're not getting the accuracy of the response that they want. Microsoft has disappointed so many customers with AI. These agents are autonomous. They're able to act with accuracy. They're able to come right out of the box.
By the end of the fiscal year, we will have thousands of customers on this platform. The early trials have been remarkable."
