Salesforce on Wednesday reported mixed third-quarter results — a small sales miss and a huge earnings beat. Still, shares jumped higher in after-hours trading after the enterprise software giant raised its full-year outlook for both headline numbers. Revenue in its fiscal 2026 third quarter rose 8.6% year over year to $10.26 billion, missing expectations of $10.27 billion, according to LSEG. Adjusted earnings per share (EPS) increased 35% year over year to $3.25, beating the consensus estimate of $2.86, LSEG data showed. It also helped that investor expectations were low heading into the print. The stock entered Wednesday evening down about 28% year to date and has struggled to regain upward momentum amid lingering concerns that artificial intelligence will displace software. Shares popped in mid-October to $246 after management announced a new long-term revenue target of more than $60 billion by fiscal year 2030, but fell to a 52-week low of $225.37 on Nov. 20. With the 2% move higher in after-hours trading, Salesforce is priced at roughly $245 per share. CRM YTD mountain Salesforce YTD return Bottom line It wasn’t a squeaky-clean quarter, but the positives outweighed the negatives. Total sales were just $13 million short of the consensus estimate, with weakness in the company’s two smaller applications, called “clouds”: Marketing and Commerce, and Integration and Analytics. The three larger clouds — Sales, Service, and Platform & Other — were all better than expected. Agentforce, the company’s AI-powered platform, closed more than 9,500 paid deals since its launch in the fall of 2024, up from the over 6,000 disclosed last quarter. In addition, six of the top 10 deals in the quarter were “driven by companies that just want to transform with Agentforce,” according to CEO Marc Benioff. Although sales aren’t a material contributor to the company just yet, momentum is building. Agentforce’s annual recurring revenue increased 330% year over year to $540 million. And Salesforce is steadfast in its belief that Agentforce usage will continue to grow as companies become an agentic enterprise, meaning systems can operate autonomously . During the conference call, Benioff pointed out that 50% of its Agentforce new bookings this quarter came from existing customers increasing their investment, which he said is a sign of strong adoption. Another positive was operating margins — on both a generally accepted accounting principles (GAAP) basis and an adjusted basis that excludes items such as stock-based compensation and severance costs. Both were much better than expected and increased significantly year over year, thanks in part to timing expenses and to a “bad debt” expense adjustment after strong collection performance. Why we own it Salesforce is a leading enterprise software platform for companies across all industries, helping employees better communicate internally and with their customers. The company’s balance of margin expansion with the…
Read More: Salesforce’s raised guidance lifts the stock but doesn’t change our rating