Salesforce Dunks On AI Fears After Massive Earnings Beat (For Now)

IMHO, Salesforce earnings felt like the brief moment in between water boards… 

I can only imagine that Marc Benioff is getting his Pete Weber on after Salesforce's earnings… especially considering the company just posted its best growth in two years… 12% YoY revenue, a clean beat on both lines. 

(Source: Giphy) 

Meaning, in the new age of Saas is dead, this qualifies as a miracle. For instance, adjusted EPS came in at $3.81 versus the $3.04 the Street expected… a 25% beat that would've been a face-melter in any other environment. Revenue also hit $11.20B against $11.18B expected while current RPO clocked in at $35.1B versus the $34.5B consensus. Additionally, Benioff's AI baby, is now running at an $800M annualized clip. Suck it, Anthropic…

(Source: CNBC) 

However, the guidance ended up being more of a shrug then a fist pump. Fiscal 2027 full-year revenue came in at $45.8B–$46.2B, implying 10%–11% growth… roughly in line, maybe a hair light depending on who you ask. But in a market where  every SaaS name has been getting repriced around existential AI disruption fears, "roughly in line" usually gets you taken behind the barn. 

And yet, it appears the market looked at the full picture and decided the beating had gone far enough. Fair. Benioff helped the case with the most Big D*ck Energy buyback announcement in recent memory: $50 billion in new repurchases. His exact words on the call, “because these are some low prices”. To which I say, respect.  When you're down 28% and you back up the truck with $50B, that's a statement. The market took notes. 

(Source: Giphy) 

That said, regardless of the earnings, regardless of the “hopium” the real banger is the fact that Salesforce's stake generated an $811M gain on strategic investments this quarter (up from $96M a year ago), and Benioff basically said he wishes he'd gone harder. "We're at about $330 million into Anthropic invested. It's almost about 1% of Anthropic. And believe me, I wish we had invested a lot more." The man watched his own stock get body-slammed by AI fears all year, and his side bet on the company doing the slamming printed $811M in a single quarter.

Meanwhile, the Informatica acquisition ($8B, closed this quarter) kicked in $399M of revenue and bumped the fiscal 2030 target from "over $60B" to $63B. Benioff also couldn't resist taking a shot at ServiceNow, claiming five of the company’s customers defected to Salesforce's competing ITSM product. Petty, much? 

(Source: Giphy) 

In the end, the broader read is cautiously encouraging if you're long. Net income grew. Bookings grew. The AI product is ramping. The balance sheet is "very under-leveraged" (Benioff's words, and he's not wrong). Morgan Stanley says Agentforce conversations with partners suggest "early innings." And today, for once, the market actually rewarded the work instead of punishing the sector.

But, but, but… don’t get comfortable. Salesforce is clawing back but the repricing isn't over just because one company posted a clean quarter. However, if you’ve been waiting for a sign that the Street can still differentiate between companies getting disrupted and companies doing the disrupting… yesterday's print was a decent data point. Until next time, friends… 

At the time of publishing, Stocks.News does not hold positions in companies mentioned in the article.