Salesforce (CRM) recently announced its third quarter results that continued to surpass market expectations. While its growth rate has slowed down, the market remains positive, and sent the stock soaring 8% to a 52-week high in the after-hours trading session. Salesforce’s stock has climbed over 70% this year, significantly outperforming the Nasdaq which grew 36% in the year.

Salesforce’s Financials

Salesforce’s revenues for the third quarter grew 11% to $8.72 billion, at par with analyst estimates of $8.72 billion. Adjusted earnings of $2.11 per share were better than the market’s forecast of $2.06 per share.

By segment, Subscription and support revenues grew 13% to $8.14 billion. Professional services and other revenues fell 4% to $0.58 billion. Current remaining performance obligations grew 14% to $23.9 billion compared with estimates of $23.22 billion.

For the fourth quarter, Salesforce forecast revenues of $9.18-$9.23 billion and an EPS of $2.25-$2.26. The market was looking for revenues of $9.21 billion. Salesforce expects to end the current fiscal with revenues of $34.75-$34.8 billion and an EPS of $8.18-$8.19.

Salesforce’s Expanding AI Partnerships

Salesforce continues to focus on its AI initiatives. After announcing that it had laid off about 10% of its overall workforce early in 2023, it has recently announced plans to hire more than 3,000 employees to focus on its AI development process. It continues to build on partnerships, and recently entered into an expanded agreement with AWS to deepen its product integrations across data and AI. For the first time, select Salesforce products will be available on the AWS Marketplace.

The expanded agreement simplifies the process for customers to manage data across Salesforce and AWS, and safely integrate AI into their applications and workflows. The partnership will enable customers to use solutions like Salesforce Prompt Builder, which are part of the Einstein Copilot Studio, to create custom prompt templates grounded in their data. Customers will be able to securely use techniques such as retrieval-augmented generation (RAG) with models from leading AI companies including AI21 Labs, Amazon, Anthropic, Cohere, Meta, and Stability AI. It will also enable developers to use simplified tooling to power generative AI experiences across the Salesforce Customer 360 platform.

Additionally, Salesforce also announced the release of Einstein 1 Platform, which features advancements for Salesforce Data Cloud and Einstein AI capabilities. The newest Einstein 1 Platform gives companies the ability to safely connect any data to build AI-powered apps with low-code and deliver new CRM experiences. Einstein 1 brings a conversational AI assistant to every CRM application and customer experience.

The upgraded Einstein Copilot is an out-of-the-box conversational AI assistant that has been built into the user experience of every Salesforce application. It will drive productivity by assisting users within their flow of work, enabling them to ask questions in natural language, and receive relevant answers that are derived from secure proprietary company data from Data Cloud.

Additionally, Einstein Copilot will be able to suggest additional options beyond the user’s query to help make the entire process more efficient. Salesforce also released an upgraded Einstein Copilot Studio that is a simpler way for companies to build a new generation of AI-powered apps with custom prompts, skills, and AI models to close sales deals faster, streamline customer service, and auto-create websites based on personalized browsing history.

Salesforce’s stock hit a 52-week high of $252.5 yesterday. It is currently trading at $251.9 with a market capitalization of $245.1 billion. It had fallen to a 52-week low of $126.34 in December last year.

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