Revenue Guidance and Performance - Salesforce raised its fiscal year 2026 revenue guidance to between $41.45 billion and $41.55 billion, reflecting a year-over-year growth of 9% to 10%[3] - Q4 FY26 guidance includes expected revenue of $11.13 billion to $11.23 billion, with a growth rate of 11% to 12% year-over-year[7] - Total revenues for the three months ended October 31, 2025, were $10,259 million, a 9% increase from $9,444 million in the same period of 2024[21] - Total revenues for Q3 2025 reached $10,259 million, a 8.6% increase from $9,444 million in Q3 2024[32] - Constant currency growth for total revenue was 8% for the three months ended October 31, 2025, compared to the same period in 2024[31] Subscription and Support Revenue - Third quarter subscription and support revenue was $9.7 billion, an increase of 10% year-over-year, and total revenue for the quarter was $10.3 billion, up 9% year-over-year[5] - Subscription and support revenues accounted for 95% of total revenues for both the three and nine months ended October 31, 2025[23] - Subscription and support revenue for the three months ended October 31, 2025, was $9,726 million, compared to $8,879 million in 2024, marking a 9% growth[29] Performance Obligations - Current remaining performance obligation (cRPO) reached $29.4 billion, up 11% year-over-year, while total remaining performance obligation (RPO) climbed to $59.5 billion, up 12% year-over-year[5] - Remaining performance obligation (RPO) as of October 31, 2025, totaled $59.5 billion, compared to $53.1 billion as of October 31, 2024, indicating a 12% year-over-year growth[27] - Unearned revenue at the end of the period was $14,996 million, up from $13,472 million in the same period last year, showing an increase of 11%[28] Profitability and Cash Flow - Operating cash flow for the third quarter was $2.3 billion, reflecting a 17% year-over-year increase, while free cash flow was $2.2 billion, up 22% year-over-year[5] - Net income for the three months ended October 31, 2025, was $2,086 million, compared to $1,527 million for the same period in 2024, reflecting a 37% increase[21] - Basic net income per share for the three months ended October 31, 2025, was $2.20, up from $1.60 in the same period of 2024[21] - Free cash flow for Q3 2025 was $2,177 million, up from $1,779 million in Q3 2024, indicating a 22.4% increase[36] - GAAP net income for the nine months ended October 31, 2025, was $5,514 million, up from $4,489 million in the same period of 2024, a 22.9% increase[35] Shareholder Returns - Salesforce returned $4.2 billion to shareholders in the form of share repurchases and dividends, including $3.8 billion in share repurchases[5] - The company repurchased $3,801 million of common stock during the three months ended October 31, 2025[25] Strategic Developments - Informatica acquisition completed, enhancing Salesforce's data management capabilities and contributing approximately 80 basis points to revenue growth guidance[6] - The company aims to expand internationally and enhance its business strategy despite uncertainties in market competition and geopolitical events[20] Expenses and Liabilities - The company reported a restructuring expense of $260 million for the three months ended October 31, 2025, compared to $56 million in the same period of 2024[21] - Total current assets decreased to $21,063 million as of October 31, 2025, from $29,727 million as of January 31, 2025[24] - Total liabilities decreased to $35,123 million as of October 31, 2025, from $41,755 million as of January 31, 2025[24] Capital Expenditures and Investments - Strategic investments increased to $6,410 million as of October 31, 2025, from $4,852 million as of January 31, 2025[24] - Capital expenditures for the nine months ended October 31, 2025, totaled $453 million, compared to $504 million in the same period of 2024[36] Operating Margins - Full year FY26 GAAP operating margin guidance is set at 20.3%, while non-GAAP operating margin guidance remains at 34.1%[8] - GAAP operating margin for Q3 2025 was 21.3%, an increase from 20.0% in Q3 2024[32] - Non-GAAP operating margin for Q3 2025 was 35.5%, compared to 33.1% in Q3 2024, showing an improvement of 2.4 percentage points[32] Tax and Other Financial Metrics - The projected non-GAAP tax rate for fiscal 2025 and 2026 is set at 22.0%[41] - The Company presents constant currency revenue growth rates to assess underlying business performance excluding foreign currency fluctuations[42] - Free cash flow is defined as GAAP net cash provided by operating activities minus capital expenditures[43] - Annual recurring revenue (ARR) for Agentforce and Data 360 includes the annualized recurring value of active subscription agreements at the end of the reporting period[43]

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...

Core Insights - Salesforce is expected to report rising revenue and profits in its upcoming quarterly earnings report [1] - Analysts predict a potential stock movement of up to 7% in either direction by the end of the week [1] Financial Performance - Projected adjusted earnings per share for Salesforce are $2.86, with a 9% year-over-year revenue increase to $10.28 billion for the third quarter [1] - The stock is currently around $235, with potential high and low targets of $251 and $218, respectively [1] Market Sentiment - Deutsche Bank analysts anticipate Salesforce will exceed estimates and raise its outlook, indicating the stock is undervalued due to "excessive negative sentiment" in recent quarters [1] - Despite a nearly 30% decline in stock value in 2025, the majority of analysts remain bullish, with 14 out of 18 recommending a "buy" [1] - The mean target price for Salesforce is approximately $310, suggesting a potential upside of around 32% from the recent close [1]

First, we're going to kick things off with a big committee move. This is Brin throwing in the towel, so to speak, on Salesforce ahead of the earnings report after the closing bell today. You're not even going to wait to see what happens, Bren.Why are you getting out. >> Yeah. Well, so I mentioned this on Monday.I've been in this stock for a minute, probably a quarter and a half. And I feel like when the market goes up, it doesn't go up. When the market goes down, it goes down slightly.I feel they're going t ...

Core Viewpoint - The discussion revolves around the performance and outlook of Salesforce and other software stocks, highlighting concerns about their stock prices not reflecting operational results and the impact of market sentiment on investment decisions. Group 1: Salesforce Performance - Salesforce is perceived to be "stuck in the mud," with a lack of upward movement in stock price despite expectations of solid earnings and free cash flow [2][3][12] - There is a sentiment that the stock may not respond positively to earnings due to a prevailing trend of negative market feedback on stocks that report good numbers [3][4] - The disconnect between operational results and stock price is noted, with more sellers than buyers in the market for Salesforce [7][8] Group 2: Broader Software Industry Trends - The software sector, including Salesforce and Adobe, is facing challenges with stock performance, as evidenced by the IGV index being flat over the past 52 weeks, while the SMH index has risen approximately 45% [15][16] - Concerns about software valuations reaching extremes and potential restrictions on technology exports are affecting investor sentiment in the software space [16][17] - The discussion highlights the existential threat posed by artificial intelligence to software companies, although current results have not yet reflected significant negative impacts [8][9] Group 3: Comparisons with Other Companies - Snowflake is highlighted as a company with strong growth potential, projecting product revenue growth of 29-30% and improving operating margins, which may differentiate it from Salesforce and Adobe [18][20] - Adobe is mentioned as having a better growth rate and being cheaper than Salesforce, with a projected growth rate of 14% and a clean balance sheet [24]

Back on Morning Trade Live. Let's focus on Salesforce. The company is set to report third quarter earnings this afternoon after the closing bell.We'll have the numbers for you momentarily, but here's a look at the chart. Salesforce more than 25% up this year and 10% over the last month. The stock rallying to an all-time high after third quarter earnings last December.We are currently just on the line to the downside at the moment for Salesforce. That's the focus of the morning trade. So, joining us for a cl ...

Core Viewpoint - Salesforce, initially seen as a growth leader in AI, is now facing valuation challenges as investor sentiment shifts towards skepticism about AI's impact on the tech sector [1][6]. Financial Performance - Salesforce shares have declined nearly 30% year-to-date, trading close to the lower end of their 52-week range, despite expectations of a new era of double-digit growth [2]. - Revenue growth is projected to fall below 10% in the coming years, a significant drop from the previous annual growth rate of around 20% [2]. - The company's forward P/E ratio is approximately 18, with a trading multiple of about five times forward sales, indicating a substantial decrease compared to many large software peers [2]. Market Perception - The market currently views Salesforce as a modest performer rather than a leader in AI innovation, despite the company's efforts to promote its AI capabilities [3]. - Investors are evaluating the potential impact of Salesforce's AI initiatives, such as Agentforce and Data Cloud, which have a disclosed annual recurring revenue (ARR) run-rate of $1.2 billion [5]. Upcoming Earnings Expectations - Salesforce is set to report its latest earnings, with expectations of revenue around $10.27 billion and non-GAAP earnings of approximately $2.86 per share, reflecting year-over-year increases of about 9% and 18% respectively [4]. - The focus for Salesforce is not just on meeting these expectations but on demonstrating a transformative narrative that showcases the effectiveness of its AI initiatives [4]. AI Narrative vs. Market Reality - There is a disconnect between Salesforce's ambitious AI revenue goals, projected to exceed $60 billion annually by the end of the decade, and the current market valuation, which reflects a lack of confidence in achieving these targets [6]. - The perception of AI as a potential bubble is leading to a decline in Salesforce's stock value, positioning it among companies viewed as "AI losers" [6]. - Concerns persist that AI advancements could negatively impact software pricing, shift budgets towards infrastructure, or facilitate new entrants in the market, further challenging Salesforce's position [6].

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Salesforce. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

Core Insights - Salesforce is being viewed as a value stock due to its shares trading near 52-week lows and a forward price-to-earnings (P/E) ratio of approximately 19.6x, significantly lower than its five-year average of over 40x or 50x during peak growth phases [1][1][1] - The market is concerned about Salesforce's growth potential, particularly regarding its core CRM business and the new AI platform, Agentforce, which has not yet contributed meaningfully to revenue [1][1][1] Valuation Analysis - Salesforce's current P/E ratio of 19.6x is a stark contrast to the broader tech sector average of around 32x, indicating a significant valuation gap [1][1] - The stock's decline to the $220–$230 range reflects investor skepticism about the company's ability to return to double-digit growth [1][1] Catalysts and Risks - The bullish outlook hinges on the success of Agentforce, which could lead to a substantial re-rating of the stock if it effectively upsells AI agents to its existing customer base [1][1] - Analysts at Oppenheimer maintain an "Outperform" rating with a $300 price target, citing Salesforce's strong financial health and potential for revenue expansion through AI [1][1] - The bear case highlights execution risks, with only about 8% of customers currently adopting Agentforce, and potential macroeconomic headwinds affecting enterprise IT spending [1][1][1]

Core Viewpoint - Salesforce's stock price has fallen to its historical lowest level, with investor concerns about artificial intelligence undermining the company's growth prospects [1][2] Group 1: Stock Performance and Market Sentiment - Salesforce's stock has declined by 30% year-to-date, making it the second-largest decliner in the Dow Jones Industrial Average and among the top 25 decliners in the S&P 500 [1] - The company's market capitalization has dropped to its lowest level since its IPO in 2004, with a forward P/E ratio of less than 19, significantly below its 10-year average of 47 and the S&P 500 average of about 22 [2] - Despite predictions of double-digit revenue growth in the coming years, Wall Street remains skeptical about whether the upcoming earnings report will change the cautious market sentiment [1][2] Group 2: AI Concerns and Competitive Landscape - Concerns persist that products from native AI companies like OpenAI may weaken demand for Salesforce's services and its pricing power [2][3] - Salesforce has its own AI product, Agentforce, but investor confidence in its financial contribution remains low, raising doubts about the company's ability to thrive in the AI era [3] - The broader SaaS sector has also faced pressure, with a 12% decline in the sector tracked by Morgan Stanley in 2025 due to fears of AI disruption [3] Group 3: Future Projections and Analyst Opinions - Salesforce is projected to see an 11% net profit growth and an 8.8% revenue growth for the current fiscal year, with expectations of acceleration in these metrics over the next three fiscal years [4] - Some analysts believe current market fears are overblown, suggesting that the SaaS sector is undervalued by 30% to 40% relative to its fundamentals [4] - The average target price for Salesforce over the next 12 months is approximately $325, indicating a potential upside of nearly 40% from the current price of $235 [4] Group 4: Importance of Services and Market Complexity - The sentiment towards SaaS companies has become quite harsh, but some services are deemed "critical" for businesses, suggesting that Salesforce may be one of the companies worth monitoring [5][6] - The outlook for the sector remains complex, with companies needing time to demonstrate resilience against AI disruptions or to emerge as winners in the AI era [6]