Salesforce surges on AI-driven earnings beat, $50B buyback
Agentforce ARR jumps 169% to $800M as cloud giant raises FY27 guidance and targets $63B by FY30
Salesforce shares surged more than 3% in after-hours trading Wednesday as the cloud software giant delivered a stronger-than-expected quarterly earnings report highlighted by explosive growth in its artificial intelligence platform and a massive new share repurchase authorization.
The San Francisco-based company reported fiscal fourth-quarter adjusted earnings per share of $3.81, beating analyst expectations of $2.86 by 33.1%. Revenue reached $11.2 billion, topping the $10.3 billion consensus estimate by 9%.
The standout performance came from Agentforce, Salesforce's AI-powered autonomous agent platform, which saw annual recurring revenue jump 169% year-over-year to $800 million. The platform closed 29,000 deals during the quarter, demonstrating growing enterprise adoption of AI-powered customer service and sales automation tools.
Buoyed by the strong results, Salesforce raised its fiscal 2027 revenue guidance to $45.8 billion to $46.2 billion, representing 10-11% year-over-year growth. The company also set an ambitious longer-term target of reaching $63 billion in revenue by fiscal 2030.
"We're seeing incredible momentum across our entire portfolio, particularly in AI," said Marc Benioff, Salesforce's chairman and CEO. "Our customers are rapidly deploying Agentforce to transform how they connect with their own customers, creating significant new value for their businesses."
In a move that should please value-oriented investors, Salesforce's board authorized a new $50 billion share repurchase program, signaling confidence in the company's ability to generate cash and return capital to shareholders. The company also raised its quarterly dividend by 5.8%, continuing a pattern of consistent shareholder returns.
The capital allocation decisions come at a critical time for Salesforce, which has faced investor pressure to improve operational efficiency after a period of aggressive acquisitions and hiring during the pandemic. The new buyback authorization represents one of the largest in the software sector and reflects management's view that shares remain undervalued despite the recent recovery.
Analysts at Morgan Stanley noted that the Agentforce growth trajectory "exceeds even bullish expectations" and represents a "potential second growth engine" for the company beyond its core customer relationship management software.
Salesforce's market capitalization stands at approximately $176 billion, with shares currently trading around $192. The stock has recovered significantly from its 52-week low of $180.24, though it remains below its yearly peak of $311.67. The company trades at a forward price-to-earnings ratio of 18.9, below its trailing multiple of 24.7, suggesting improved earnings visibility.
The strong quarter and optimistic outlook provide a counterpoint to broader concerns about enterprise software spending amid macroeconomic uncertainty. While some peers have reported slowing deal cycles and increased scrutiny from customers, Salesforce's results suggest that AI-driven productivity tools are commanding budget priority even in a cautious spending environment.
Looking ahead, investors will focus on whether Salesforce can maintain the Agentforce growth momentum and convert the impressive ARR expansion into sustainable revenue and profit growth. The company's ability to integrate AI capabilities across its full suite of products—sales, service, marketing, and commerce—will be critical to achieving its $63 billion FY30 target.
The raised guidance and substantial buyback authorization signal management's confidence that the recent restructuring efforts and AI investments are beginning to pay off, potentially positioning Salesforce for sustained outperformance in the enterprise software market.