Salesforce Inc. jumped in extended trading after the software company gave an outlook for strong revenue expansion and deepened its partnership with Anthropic PBC, reassuring investors that it can compete successfully in the AI era.
Sales will be about $11.5 billion in the fiscal third quarter, which ends in October, Salesforce said Wednesday in a statement. That's just ahead of analysts' average estimates, according to data compiled by Bloomberg. Current remaining performance obligations - a measure of future sales - will increase about 14%, also ahead of the average estimate of 13% growth.
The company expects revenue to accelerate in the second half of the year, even without the impact of acquisitions, Chief Financial and Operating Officer Robin Washington said in the statement. Net orders are at the strongest they've been in four years, she said.
The leading maker of customer management software is under pressure to prove it can thrive against competition from artificial intelligence companies and products. Agentforce, its AI tool meant to handle business tasks without human oversight, is on track to contribute about $1.5 billion in revenue this year, Salesforce said Wednesday. That's an increase from the $1.2 billion reported in the prior quarter.
The company also announced an expanded partnership with Anthropic, the maker of the AI model Claude. It will integrate Salesforce's products within Claude, allowing sellers to access information on their customers and sales cycles with the AI app.
When customers access Salesforce data from Claude, it will run up consumption bills with both companies. This integration should help push Salesforce customers toward higher-tier plans, said Mike Spencer, Salesforce head of finance, in an interview.
Revenue gained 11% to $11.3 billion in the fiscal second quarter, which ended July 31, in line with analysts' estimates. Profit, excluding some items, was $5.90 a share.
The results were "encouraging," wrote Rebecca Wettemann, an analyst at Valoir. "Salesforce needed to beat the numbers, but also the narrative around AI eating its business."
The shares gained more than 12% in extended trading after closing at $205.62. The stock had dropped 38% this year through July 24, but had rebounded 26% since then through Wednesday's close.
Chief Executive Officer Marc Benioff started a conference call after the results were released by addressing "skeptics" who believe that AI will lead customers to abandon Salesforce or negotiate for lower prices. Instead, attrition is near record lows and contract terms are improving for Salesforce, Benioff said.
"This nonsense of this SaaSpocalypse, I think it's time to stop," Benioff said, referencing the stock meltdown earlier this year for software-as-a-service companies such as Salesforce.
Benioff isn't the only software leader who has pushed back on earnings calls in an attempt to shake investors' negativity. Peers from ServiceNow Inc. to Oracle Corp. have been trying increasingly aggressive strategies to address the sentiment.
In June, Salesforce announced it would acquire AI startup Fin for $3.6 billion. The deal is expected to help the company bolster its customer service AI offerings and better compete against Sierra, a startup founded by Bret Taylor, OpenAI chairman and a former co-chief executive officer at Salesforce.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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