Endava (NYSE:DAVA) Q1 2026 Earnings Call November 11, 2025 08:00 AM ET Company ParticipantsMark Thurston - CFO and DirectorJohn Cotterell - Founder, CEO, and DirectorPuneet Jain - Associate of Equity ResearchBryan Bergin - Managing DirectorAntonio Jaramillo - Equity Research Senior AssociateLaurence Madsen - Head of Investor Relations and ESGJonathan Lee - MD of Equity ResearchConference Call ParticipantsMaggie Nolan - Research Analyst of Technology, Media, and CommunicationsNate Svensson - Director and Sen ...

Core Insights - Salesforce Inc (NYSE:CRM) has faced challenges in its core business due to an early and rushed launch of its AI technologies, which has led to underperformance compared to competitors like ServiceNow [1][2] - The complexity of changing business software has resulted in corporate America being unprepared for Salesforce's AI products, as companies have high expectations for software accuracy and reliability [2] - Despite concerns about slowing growth and the impact of AI on market share, Salesforce is expected to benefit from AI advancements due to its deep integration within enterprise systems and a strong customer retention rate [4] Company Overview - Salesforce is recognized as the leading SaaS vendor for customer relationship management (CRM) and salesforce automation (SFA) software, offering a wide range of products including marketing automation and analytics [3] - The company is expanding its product suite with multiple cloud offerings and proprietary data, positioning itself as an AI innovation leader [4] - Salesforce maintains a scalable business model with high margin potential, supported by a loyal customer base and recurring revenue streams [4]

Core Viewpoint - Salesforce's recent investor day revealed a new revenue target of over $60 billion for the fiscal year 2030, indicating a potential growth acceleration that has encouraged investor sentiment despite previous stock performance challenges [11][12][19]. Company Performance - Salesforce's stock has declined 29% year-to-date, reflecting broader pressures in the enterprise software sector and skepticism regarding its AI platform, Agent Force [3][4][5]. - The company has reported solid quarterly results but has not seen significant revenue growth from Agent Force, which raises concerns about its effectiveness [7][8]. AI Platform - Agent Force - Agent Force, Salesforce's AI platform, aims to replace human roles with digital agents, but Wall Street remains unconvinced about its success [2][5]. - Despite the initial rollout of Agent Force, there has been no meaningful uptick in revenue growth attributed to this platform [6][7]. Revenue Guidance - The new revenue target of over $60 billion for fiscal 2030 is higher than analysts' expectations of $58.4 billion, suggesting a compound annual growth rate of 10% over the next four years [12][13]. - This guidance implies a potential recovery in Salesforce's growth rate, moving from the current high single digits to low double digits [13][14]. Market Reaction - Following the announcement of the new revenue target, Salesforce's stock jumped 4%, marking its best single-day gain since May [14]. - The company also announced a $7 billion stock buyback, which represents approximately 3% of its outstanding shares, further boosting investor confidence [14][15]. Analyst Sentiment - While the new guidance has been viewed positively, some analysts remain skeptical, labeling the targets as "aspirational" and questioning the company's ability to achieve them [17][18]. - The onus is on Salesforce's management to deliver on these ambitious projections, as the market remains cautious [18][19].

Maybe our brains are too small. Could that be the reason why we can't get our silly little heads around the need to spend fortunes building out the data centers for artificial intelligence. That's what I'm trying to comprehend as I do my deep dive into the tech world in order to help you make the most informed decisions about all sorts of stocks whose fortunes depend on what comes next in Silicon Valley.The averages often depend on who's meeting who and who's spending what. Including today, Dow dipped 17 po ...

Group 1 - The tech industry is experiencing significant investment in data centers to support artificial intelligence, indicating a shift in operational needs [1][5] - The stock market performance shows mixed results, with the NASDAQ gaining 66% driven by AI-related stocks, while the Dow dipped 17 points and the S&P advanced 4% [2] - Salesforce's stock fell over three dollars following CEO Mark Benioff's keynote on the Agent Force initiative, reflecting Wall Street's skepticism about its immediate impact on the company's performance [3][4] Group 2 - There is a growing concern about the substantial backend investment required to power AI applications, which is seen as a critical battleground for tech companies [4][5] - The fourth industrial revolution, characterized by advancements in AI, is compared to previous industrial shifts, emphasizing its potential to transform the operational landscape [5][6]

Core Insights - The discussion revolves around the significant investments required for data centers to support artificial intelligence (AI) technologies, highlighting the skepticism in the market regarding the sustainability of these expenditures [2][4][10]. Industry Overview - The current phase is described as the fourth industrial revolution, driven by advancements in AI and data center capabilities, likened to previous revolutions such as the steam engine and personal computers [5][7][12]. - The AI sector is experiencing a massive buildout of data centers, which is seen as both a necessary investment and a potential bubble, with concerns about overvaluation and unsustainable spending [9][10][12]. Company Insights - Salesforce is making significant strides in AI with its Agent Force initiative, but market reactions indicate skepticism about its immediate impact on the company's stock performance [3][4]. - OpenAI is highlighted as a company potentially engaging in risky financial practices, raising concerns among analysts about its long-term viability and the sustainability of its valuation [9][10]. Market Reactions - The stock market's mixed performance reflects broader uncertainties, with the Dow dipping while the NASDAQ gained, primarily driven by AI-related stocks [2][3]. - Analysts express concerns that the current spending patterns in the AI sector resemble those seen during the dot-com bubble, leading to fears of a similar outcome [10][12].

Core Insights - The application software industry is facing potential disruption from AI platforms, similar to the challenges faced by package software companies during the dotcom era [1][2] - Current market dynamics indicate that while AI is a disruptive force, its impact on application software companies is not immediate, and it may take time for significant changes to occur [2][4] Company Analysis - Salesforce has struggled this year, particularly due to its early bet on Agent Force, which was not ready for market adoption, leading to neglect of its core business [6][10] - In contrast, Service Now has performed well by focusing on its core business, demonstrating the importance of maintaining a strong foundational offering [6][5] - The differentiation in application software companies currently lies between those with strong core businesses, like Service Now, and those struggling, like Salesforce [5][6] Market Readiness - Corporate America is not fully prepared for the changes that Salesforce is attempting to implement, as changing business software is complex and infrequent [8][9] - High expectations for business software results create a low tolerance for inaccuracies, which AI currently struggles to meet in a business context [9][10]

Summary of the Conference Call Company and Industry - The conference call primarily discusses **Salesforce** and its innovative product **Agent Force**, which is positioned within the broader context of the **AI and CRM industry**. Core Points and Arguments 1. **Growth of Agent Force**: Agent Force has rapidly evolved from an idea to the fastest-growing product launched by Salesforce, handling over **1.5 million customer service requests** [6][2][1]. 2. **Human-AI Collaboration**: The focus is on creating an "agentic enterprise" where AI and humans work together to enhance customer success, emphasizing that AI should elevate human capabilities rather than replace them [7][6]. 3. **Data as Foundation**: The foundation of Salesforce's strategy is centered around **Data 360**, which integrates various data sources to create a unified customer record, essential for delivering personalized experiences [18][25]. 4. **Agent Force's Role**: Agent Force is embedded within the Salesforce platform, providing immediate access to data and applications, which simplifies the integration process for businesses [30][31]. 5. **Learning from Customers**: Salesforce has actively engaged with over **12,000 customers** to refine Agent Force, learning from their experiences and challenges in deploying AI solutions [21][24]. 6. **Challenges with LLMs**: The limitations of large language models (LLMs) in business contexts were highlighted, emphasizing the need for deterministic execution alongside probabilistic reasoning [59][39]. 7. **Intelligent Context for Unstructured Data**: Improvements in handling unstructured data have led to a significant increase in accuracy for document processing, enhancing the utility of AI in business applications [40][42]. 8. **Agentic Enterprise Opportunity**: The call emphasized the unprecedented opportunity for companies to transform into agentic enterprises, leveraging AI to drive productivity, reduce costs, and enhance customer satisfaction [58][59]. 9. **Sales Strategy**: Salesforce has developed a playbook to help customers transition to agentic enterprises, focusing on industry-specific solutions and gradual implementation [60][61]. 10. **Flexible Pricing Models**: Salesforce offers various pricing models, including seat-based licenses and consumption-based options, to accommodate different customer needs and reduce barriers to adoption [66][67]. Other Important Content - **Customer Engagement**: The importance of customer feedback in shaping product development was emphasized, with a commitment to listening and responding to customer needs [51][52]. - **Future Vision**: The executives expressed excitement about the future of Salesforce and the potential of AI to revolutionize customer interactions and business processes [50][58]. - **Integration of Applications**: All Salesforce applications are now fully integrated with Agent Force, enhancing the overall functionality and user experience [46][47]. This summary captures the key insights and developments discussed during the conference call, highlighting Salesforce's strategic direction and the transformative potential of Agent Force within the CRM and AI landscape.

Core Insights - The podcast discusses the evolution of technology and its impact on businesses, particularly focusing on the identity security fabric and the agentic revolution in the context of cloud computing and AI [10][14][22]. Company Insights - Octa, co-founded by Todd McKinnon, aims to revolutionize identity management in the cloud, emphasizing the importance of a unified identity security fabric that consolidates various identity solutions [14][36][41]. - The company is experiencing momentum as it aligns with the latest technological shifts, particularly the integration of AI and automation in enterprise processes [20][46]. - Octa's strategy focuses on providing comprehensive identity solutions that enhance security and control while enabling innovation across organizations [22][27][39]. Industry Insights - The current technological landscape is characterized by rapid innovation, with AI and cloud computing being pivotal in transforming business operations [10][12][21]. - Companies are increasingly seeking integrated solutions that address security concerns while allowing flexibility in choosing innovative technologies from various vendors [24][25][27]. - The cybersecurity industry is investing heavily, with $200 billion spent annually, highlighting the ongoing challenges of identity-based attacks and the need for robust identity management systems [22][55][56].

Every year I come out to San Francisco for Dreamforce which is Salesforce's main customer event in order to take the pulse of all things tech. This year it's extra important because the enterprise sector cohort has been evviscerated by the art rise of artificial intelligence. Salesforce itself is seated stock doubled 34% from its all-time highs late last year.Even though it's made major strides with AI in the field of incentives kind of dominates it. So far, Wall Street hasn't seemed to care. But I'm not re ...