MW Salesforce's growth hits a bad milestone. Can its AI agents provide a boost?

By Therese Poletti

The cloud-software pioneer delivered an annual revenue growth rate in the single digits for the first time

Salesforce Inc.'s earnings results and guidance were further confirmation that the cloud-software pioneer is in a maturing, slower-growth mode - and some analysts say its artificial-intelligence agents are not going to boost its growth rate anytime soon.

The company's guidance for fiscal 2026 revenue of $40.5 billion to $40.9 billion implies a 7% to 8% revenue growth rate compared with fiscal 2025, which ended Jan. 31. That is down from the 9% revenue growth rate Salesforce $(CRM)$ just reported for 2025, in what appears to be its first single-digit annual growth rate in the company's history.

Salesforce also forecast 9% growth for subscription and support revenue for fiscal 2026.

"We have been concerned that Salesforce was a mature business in a mature market and that expectations were running too high in general and especially as it relates to Agentforce," Bernstein Research analyst Mark Moerdler wrote in a note to clients.

Indeed, the company confirmed that it is still early days for its AI agent, called Agentforce, which is meant to do tasks alongside human employees. While Salesforce did not break out revenue for Agentforce, it did give annual recurring revenue for its data-cloud segment, which includes its AI products, at $900 million. But Moerdler pointed out that Agentforce is still a very small part of that. By his estimates, it may only be doing "a couple of tens of millions" of dollars in annual recurring revenue since its launch last September.

Also read: Salesforce makes a pitch for AI agents, but its tempered forecast spooks investors

"Salesforce did mention that out of the 5,000 Agentforce deals they closed since October, more than 3,000 of them are paid customers, but these deals are likely small in size," Moerdler said. "As management has mentioned themselves, the adoption cycle is still in early stage, and it takes time to ramp."

Moerdler lowered his estimates for fiscal 2026 and 2027 and changed his financial models to reflect the company's slower growth, cutting his price target to $243 from $286.

Macquarie Equity Research analyst Steve Koenig said he was encouraged by the potential for the adoption of Agentforce and margin improvement. But at the same time, "Salesforce is facing a combination of macro-driven demand weakness and intensifying competition," he said in a note to clients. Salesforce saw stability in sales, service and platform - and in the U.S. - while its Tableau and Mulesoft businesses lagged due to tough comparisons. Meanwhile, parts of the Europe, Middle East and Africa were under pressure.

Cowen & Co. analyst Derrick Wood was more bullish about the potential for Agentforce, writing that Salesforce's guidance could be conservative due to the impending departure of Chief Financial Officer Amy Weaver. Marc Benioff, the company's chief executive and co-founder, said goodbye to two of his top executives on the call with analysts. Weaver and Brian Millham, who serves as president and chief operating officer, are both leaving soon.

Investors have been concerned in the past about Benioff's inability to hold on to potential successors. In February, Salesforce named longtime board member Robin Washington as president, chief operating officer and chief financial officer.

"We are encouraged around AI demand indicators and think [Salesforce] has incorporated added conservatism in guide given [the] CFO transition," Wood said in a note.

He and his team "think Data Cloud & Agentforce are in strong ramp mode, and that Mulesoft, Tableau & Slack are likely to re-accelerate in [fiscal 2026] versus current levels, and we see a setup for upward revisions to estimates as we progress through the year," he added.

Even so, he lowered his price target on Salesforce to $375 from $400, and he cut his earnings estimates for fiscal 2026 and 2027 as well, while reiterating a buy rating on the stock.

In morning trading, shares of Salesforce were down nearly 4%, to pace Dow Jones Industrial Average DJIA laggards.

-Therese Poletti

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February 27, 2025 11:11 ET (16:11 GMT)

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