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Salesforce Faces AI Disruption, Soft Q2 Outlook
28 May
Summary
- Salesforce reported Q1 revenue beat but offered a weak Q2 outlook.
- AI advancements from competitors raise concerns for traditional vendors.
- Company's AI model usage doubled; Agentforce revenue grows significantly.
Salesforce experienced a mixed financial report, beating first-quarter earnings estimates but projecting a cautious revenue outlook for the subsequent quarter. This softer guidance comes amidst growing market apprehension regarding the impact of sophisticated AI technologies developed by competitors such as Anthropic and OpenAI.
The company's fiscal second-quarter revenue projection is set around $11.3 billion, falling slightly short of analyst expectations. Salesforce's remaining performance obligations, a key indicator of future sales, also came in below forecasts. However, the company noted a substantial increase in the utilization of AI models within its platform, with usage more than doubling from the previous quarter.
In the first quarter ended April 30, Salesforce achieved a 13% revenue increase to $11.1 billion, partly aided by its recent acquisition of data software firm Informatica. Excluding certain items, profit per share reached $3.88, surpassing Wall Street's average estimate. The company anticipates revenue growth to accelerate in the latter half of the year.
