Salesforce stock shot up after the company enjoyed a strong display in its long-awaited Q3 earnings report.
The cloud giant’s stock (CRM) stood at $367 at 9.30am on Wednesday – an impressive 10% increase from its close-of-market cost of $331.43 amid a wave of good news from the company’s third-quarter figures.
Salesforce Q3 Earnings Summary
Salesforce’s revenue grew 8% year over year during the third quarter and fiscal fourth quarter sales were expected to be between $9.9B and $10.10B; within analysts’ projections of $10.05B.
The company’s net income was $1.5B – a 25% increase from last year’s $1.2B. The figures come after the company’s apparent hard pivot towards the world of artificial intelligence (AI).
It is the first earnings report from the company since it properly unveiled its flagship AI product, Agentforce, to the world at Dreamforce 2024 in September.
The company’s shift in focus towards the world of agentic AI is plain to see from their Q3 earnings call. The word “Agentforce” was mentioned 80 times during the call – twice the number (39) it appeared in this year’s Q2 earnings call.
The good news for the “Mothership” will come as a very welcome relief for many in the Salesforce ecosystem, which was a shock when the company’s stock plunged 16% in the wake of May’s Q1 earnings report when the company missed its revenue forecast number for the first time since 2006.
Salesforce might now be fully justified in looking back on May’s doom and gloom as merely a blip in what can now be seen as a strong year for the company overall.
Its third quarter revenue rose 8% to $9.44B, exceeding the average analyst estimate of $9.35B, according to data compiled by LSEG.
Salesforce now expects fiscal year 2025 revenue between $37.8B and $3B, which is a small increase from its previous forecast range of $37.7B to $38B.
In a post-earnings call on Tuesday, Salesforce executives said that the company would hire 1,400 people in its fourth quarter – even more than the 1,000 figure reported in November – in a bid to help with the increased demand for Agentforce.
In yet more evidence of Salesforce’s “hard pivot” to artificial intelligence, the annual spend on Slack AI grew nearly 50% quarter over quarter, the earnings report revealed. Slack was included in more than a third of the tech giant’s deals greater than $1M.
What Is Agentforce 2.0?
Salesforce’s AI product Agentforce was praised for having “incredible” momentum in Q3 with more than 200 deals closed in just one week. But, ever forward-looking, Salesforce CEO Marc Benioff did not miss the opportunity to tease yet another new item coming from the cloud giant – and before the year is over, no less.
He said on the earnings call: “This is incredible even to be able to say this because we just introduced Agentforce in October, but I want to invite all of you to join us for the launch of Agentforce 2.0.
“And it is incredible what you are going to see, the advancements in the technology already are amazing in accuracy, in the ability to deliver even additional value. We hope that you’re going to join us in San Francisco on December 17th.
“You’ll see Agentforce 2.0 for the first time and you’re not going to believe it. You’re not going to want to miss it.”
Seemingly not wanting to give too much away, he then handed over to President and Chief Operating Officer Brian Millham, who spoke of how AI will “redefine how we work and how work gets done”.
What exactly “Agentforce 2.0” is remains to be seen, but Marc will have no doubt raised expectations for its apparent debut on December 17 in San Francisco.
Big Deals, New Hires, Data Cloud, and Integration
In another curious revelation, Brian Millham said that the number of wins greater than $1M, with AI “more than tripled” year over year, with Salesforce signing more than 2,000 AI deals. He said that customer success with Agentforce and Salesforce AI solutions was driving “strong results”.
The COO added that, to capture the increased demand for Agentforce, the company would seek to hire 1,400 account executives globally in the fourth quarter – and the company would be using a new sales SDR agent and sales coaching agent to “augment every seller”.
Brian told the earnings call the company was seeing “amazing Agentforce energy” across the ecosystem, with global partners involved in 75% of their Q3 Agentforce deals in nine of their top 10 wins in the quarter.
More than 80,000 system integrators have completed Agentforce training, he said, adding that hundreds of ISVs and technology partners were building and selling agents.
“Our partners are also becoming agent-first enterprises themselves,” Brian said. “In the quarter, Accenture chose Agentforce to streamline sales operations and enhance bid management for its 52,000 global sellers.”
Another takeaway from the earnings report was the drastic change in year-over-year growth for Integration and Analytics – the service previously referred to as Data, which includes MuleSoft and Tableau.
The YOY growth in constant currency for Integration and Analytics drops from 25% in Q1 for FY25 to just 5% in Q3.
Meanwhile, Data Cloud was praised in the call as the “foundation for every AI transformation” and was included in one-third of all the company’s deals this quarter over $1M.
Eight of Salesforce’s top 10 deals included both Data Cloud and AI, inclusive of Agentforce, the earnings call revealed. Brian told the call that 25% of the Fortune 100 are now Data Cloud customers.
Final Thoughts
The headlines are good, with CRM stock shooting up 13% in pre-market; Salesforce revenue growing 8% year over year; and net income 25% up. But CEO Marc Benioff appears to be far from resting on his laurels, using the earnings call to tease “Agentforce 2.0” – which will apparently be both unmissable and unbelievable.
The frequency of the word “Agentforce” rising from 39 in a previous earnings call to 80 for Q3 perhaps illustrates the significance of the cloud giant’s shift towards AI, which is more and more taking center stage in Salesforce news, events, and earnings reports.
At least for now, this shift appears to be very much paying off.
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