Stock slips after forward guidance
Salesforce shares dropped 5% in extended trading after the company delivered stronger than expected fourth quarter results but offered fiscal 2027 revenue guidance that came in slightly below Wall Street forecasts.
Adjusted EPS: $3.81 vs. $3.04 expected
Revenue: $11.20 billion vs. $11.18 billion expected
Revenue rose 12% year over year in the fiscal fourth quarter ended Jan. 31, marking the company’s fastest expansion rate in two years. Net income climbed to $1.94 billion, or $2.07 per share, up from $1.71 billion, or $1.75 per share, a year earlier.
Buybacks and near term strength
Salesforce authorized an additional $50 billion in share repurchases. CEO Marc Benioff indicated that current valuation levels presented an opportunity, noting the stock has fallen roughly 28% in 2026 while the S&P 500 has gained 1%.
Remaining performance obligation, a key metric tracking contracted future revenue, totaled $35.1 billion, ahead of the $34.53 billion consensus estimate.
For the fiscal first quarter, Salesforce forecast adjusted earnings of $3.11 to $3.13 per share on revenue between $11.03 billion and $11.08 billion, slightly above consensus expectations.
Longer term guidance disappoints
For fiscal 2027, the company projected adjusted earnings of $13.11 to $13.19 per share on revenue of $45.8 billion to $46.2 billion. The midpoint trails analyst expectations of $46.06 billion in revenue, implying growth of about 10% to 11%.
Salesforce also lifted its fiscal 2030 revenue target to $63 billion, up from a prior goal of more than $60 billion. The updated projection incorporates contributions from its recently completed $8 billion acquisition of Informatica, which added $399 million in quarterly revenue.
AI focus and competitive shifts
The company continues to emphasize artificial intelligence capabilities. During the quarter, Salesforce rolled out an AI powered Slack assistant and expanded adoption of its Agentforce automation platform, which reached an annualized revenue run rate above $800 million.
At the same time, investor concerns about generative AI disruption have weighed on broader software valuations. IBM shares recently fell sharply following commentary about AI tools modernizing legacy systems.
Salesforce reported an $811 million gain from strategic investments, including its stake in AI company Anthropic, compared with $96 million in the prior year period.
The company also noted that several customers shifted from a competing IT service management platform to Salesforce during the quarter.
