Salesforce Delivers a SaaSpocalypse Reality Check

After becoming the unwilling poster child for the so-called SaaSpocalypse earlier this year, Marc Benioff & Co. used Salesforce’s quarterly earnings report Wednesday to make the case that Wall Street’s software pessimists are little more than Chicken Littles of the AI age. Their evidence? Record revenue and Salesforce’s own continued embrace of agentic AI.

Is The Sky Falling?

The narrative that put Salesforce at the center of the SaaSpocalypse is a simple one: In a world of highly capable AI-coding agents, every company can follow Klarna and Palantir’s lead and build a customer relationship management system of its own, lickety-split, saving tens of thousands of dollars in yearly expenses. Shares of the company have plummeted 30% this year as the world got Claude-pilled, and have lagged behind peers amid a post-repricing SaaS rebound. The iShares Expanded Tech-Software Sector ETF, for instance, has gained about 24% from an April 10 low, while Salesforce shares have rebounded less than 10%.

Last week, Bank of America analyst Tal Liani reinstated coverage of the company with a note reiterating an underperform rating, writing that “we expect a structural reset driven by AI transition that raises three core concerns: muted net new customer additions, limited up-sell potential, and an underwhelming AI monetization pathway.”

Company leaders essentially spent the earnings report attempting to refute the points, one by one:

• Salesforce posted revenue of $11.1 billion, a record and up 13% year over year. While that’s slower than the growth the company routinely achieved earlier this decade, Salesforce said it would deliver organic revenue acceleration in the second half of the year.
• Annual recurring revenue for Data 360 and Agentforce, its agentic AI tool, rose 200% from a year ago to nearly $3.4 billion. Meanwhile, “Agentic Work Units,” the company’s outcomes-based pricing metric for Agentforce, jumped 111% from the previous quarter, and more than half of bookings on Agentforce and Data 360 came from existing customers, a sign that clients are adopting the new AI-driven tools.

Force Majeure: Wall Street didn’t exactly bite. A lower-than-expected revenue forecast for the current quarter of $11.3 billion (below consensus estimates of $11.4 billion) dulled any enthusiasm for evidence that the corporate world isn’t quite ready to jump ship from its entrenched CRM platform. “We are not sure this will be enough to drive a meaningful reaction,” Barclays analyst Raimo Lenschow wrote in a note following the after-the-bell earnings call. Shares of the company fell as much as 1.6% in after-hours trading, suggesting the SaaSpocalypse narrative hasn’t exactly been slain.