Salesforce Shares Rise as AI Demand Fuels Q3 Beat and Higher Full-Year Guidance

Core Insights - Salesforce reported third-quarter results that exceeded expectations and raised its full-year outlook, driven by strong demand for its AI-enhanced offerings [1][4] Financial Performance - For the quarter ended October 31, Salesforce posted earnings per share of $3.25, surpassing Bloomberg consensus forecasts of $2.86 [2] - Revenue increased by 8.6% year-over-year to $10.3 billion, slightly above expectations, with subscription and support revenue rising 10% year-over-year [2] Future Outlook - The company now expects fiscal 2026 revenue to be between $41.45 billion and $41.55 billion, an increase from the previous outlook of $41.1 billion to $41.3 billion [3] - For the fourth quarter, projected EPS is between $3.02 and $3.04, with revenue expected to be between $11.13 billion and $11.23 billion [3] Demand Drivers - The improved guidance is supported by strong anticipated demand for Salesforce's AI-powered agent platform, particularly among large enterprise customers [4] - The company expects to benefit from a growing number of organizations adopting AI tools to streamline operations, with major technology firms utilizing Salesforce's AI agents for workflow automation [4] Key Indicators - Salesforce's remaining performance obligations, a key indicator of future revenue streams, rose by 11% in the quarter [5] - Operating cash flow increased by 17% to $2.3 billion, reflecting healthy cash generation alongside the AI-driven growth strategy [5]