Salesforce Q3 Earnings Beat, AI Drives Strong Outlook

December 4, 2025 at 07:15 UTC
5 min read
Salesforce Q3 earnings beat visualization with AI growth and upgraded revenue forecast

Key Points

  • Salesforce reported Q3 revenue of approximately $10.26 billion, up 8.6% year-over-year, matching analyst expectations.
  • Adjusted earnings per share (EPS) were $3.25, surpassing estimates by 14%, driven by strong profitability and operating margins.
  • The company raised its fiscal 2026 revenue guidance to $41.45-$41.55 billion and adjusted EPS guidance to $11.75-$11.77, reflecting AI-driven momentum.
  • Salesforce’s AI platforms, Agentforce and Data 360, now generate nearly $1.4 billion in annual recurring revenue, more than doubling year-over-year.

Q3 Financial Performance and Market Reaction

Salesforce Inc. reported third-quarter fiscal 2026 revenue of approximately $10.26 billion, representing an 8.6% increase compared to the same period last year. This revenue figure was in line with Wall Street estimates, which hovered around $10.26 to $10.28 billion. The company’s adjusted earnings per share (EPS) came in at $3.25, significantly exceeding analyst expectations of about $2.85 to $2.86, marking a 14% earnings surprise. This strong profitability was supported by an adjusted operating profit margin of 35.5%, surpassing the anticipated 34.1% and improving from 33.1% in the prior year. Salesforce’s GAAP net income was reported at $2.1 billion, or $2.19 per share, reflecting a 37% increase year-over-year. Despite the revenue meeting estimates, the earnings beat and margin expansion were key drivers behind the positive market reaction, with shares rising approximately 5% in after-hours trading following the earnings release. However, the stock remained down nearly 30% for the year, reflecting ongoing investor skepticism about the long-term impact of AI on legacy software companies.

AI Platforms Fuel Growth and Outlook Upgrade

Central to Salesforce’s upbeat outlook is the accelerating adoption of its artificial intelligence offerings, particularly the Agentforce platform and Data 360 product suite. CEO Marc Benioff highlighted these AI tools as significant momentum drivers, with combined annual recurring revenue (ARR) reaching nearly $1.4 billion, an explosive 114% increase year-over-year. Agentforce alone surpassed $500 million in ARR during the quarter, growing several hundred percent annually, and Salesforce reported closing over 18,000 Agentforce deals since its launch, with more than 9,500 paid deals in the most recent quarter. Data 360, which enhances data integration and governance, is ingesting tens of trillions of records per quarter, with its “zero copy” data capability growing even faster. These AI-driven products are designed to automate sales, service, and marketing tasks, helping enterprises streamline operations and improve efficiency. The company’s recent $8 billion acquisition of Informatica, a data-integration specialist, is expected to contribute approximately 3 percentage points to near-term revenue growth and about 4 percentage points to current remaining performance obligations (RPO), further strengthening the data infrastructure behind Salesforce’s AI offerings.

Current Remaining Performance Obligations and Backlog

Salesforce’s current remaining performance obligations (cRPO), a key indicator of near-term demand and bookings, rose to approximately $29.4 billion, exceeding analyst forecasts of around $29.1 billion. This represents an 11% increase year-over-year, signaling a healthy pipeline of contracted revenue. Total remaining performance obligations (RPO) climbed 12% to roughly $59.5 billion. The growth in backlog and bookings provides reassurance about Salesforce’s medium-term revenue prospects amid a competitive and evolving software market. Billings at the end of the quarter were reported at $8.7 billion, up 13.1% year-over-year, reflecting strong customer commitment. These metrics underscore the company’s ability to maintain steady demand across its cloud portfolio despite broader market uncertainties.

Guidance and Strategic Positioning Amid AI Skepticism

For the fiscal fourth quarter ending in January 2026, Salesforce projected revenue between $11.1 billion and $11.2 billion, surpassing analyst expectations of approximately $10.9 billion. Adjusted EPS guidance was set between $3.02 and $3.04 per share, aligning closely with consensus estimates. The company reiterated its full-year adjusted operating margin target of roughly 34%. Additionally, Salesforce raised its full-year fiscal 2026 revenue forecast to a range of $41.45 billion to $41.55 billion, up from prior guidance of $41.1 billion to $41.3 billion, and increased its adjusted EPS guidance to $11.75 to $11.77 from $11.33 to $11.37. This upgrade reflects confidence in the monetization of its AI platforms and the integration benefits from the Informatica acquisition. Despite these positive developments, Salesforce’s stock has faced significant pressure, declining about 30% year-to-date, as investors remain cautious about the broader AI market hype and its impact on traditional software vendors. CEO Marc Benioff emphasized Salesforce’s unique positioning in the AI era, underscoring the company’s long-term growth ambitions, including a target of more than $60 billion in organic revenue by fiscal 2030 and a combined growth-plus-margin metric of 50. The company’s strategy focuses on embedding AI capabilities deeply into its cloud offerings to drive sustainable growth rather than relying solely on hypergrowth narratives.

Key Takeaways

  • Salesforce’s Q3 results demonstrated solid revenue growth and a significant earnings beat, driven by strong operating margins and profitability.
  • The company’s AI platforms, Agentforce and Data 360, are rapidly gaining traction, contributing substantially to recurring revenue and future growth prospects.
  • Salesforce raised its fiscal 2026 revenue and earnings guidance, reflecting confidence in AI-driven demand and the strategic value of its Informatica acquisition.

References

  1. 1. https://www.tradingview.com/news/invezz:7e024e8c2094b:0-salesforce-jumps-as-ai-tools-help-drive-upbeat-revenue-outlook/
  2. 2. https://finance.yahoo.com/news/salesforce-ceo-vies-overcome-investors-231904876.html
  3. 3. https://finance.yahoo.com/news/salesforce-com-fiscal-q3-earnings-230831729.html
  4. 4. https://za.investing.com/news/earnings/salesforce-inc-earnings-beat-by-039-revenue-topped-estimates-4011687
Stay Ahead of the Market

Get premium market insights delivered directly to your inbox.

Assets in this article
CRMSalesforce
$264.95-0.4%
Trending now