Davos, Switzerland – Salesforce, a leading cloud software vendor, experienced a significant drop in its shares, plummeting 17% in extended trading after reporting revenue below analysts’ expectations and providing weaker guidance. The CEO, Marc Benioff, appeared on a panel at the World Economic Forum, discussing the company’s performance.

In the latest financial report, Salesforce posted earnings of $2.44 per share, adjusted, slightly higher than the expected $2.38 per share. However, the revenue fell short at $9.13 billion compared to the projected $9.17 billion. The company anticipated adjusted earnings per share for the current quarter to be between $2.34 and $2.36, with revenue ranging from $9.2 billion to $9.25 billion, missing the analysts’ consensus of $2.40 per share on $9.37 billion revenue.

Despite an 11% increase in revenue in the fiscal first quarter, reaching $8.25 billion, Salesforce failed to meet revenue expectations for the first time in over five years. The company’s product categories all contributed to growth, except for the Professional Services and Other category, which saw a 9% decline in revenue to $548 million. However, net income surged to $1.53 billion or $1.56 per share from $199 million year-over-year.

Looking ahead, Salesforce raised its earnings forecast for the 2025 fiscal year to between $9.86 and $9.94 per share, compared to the previous range of $9.68 to $9.76. Revenue guidance remained steady at $37.7 billion to $38 billion. The company introduced Einstein Copilot, an AI assistant for sales and customer service reps, and announced enhanced AI features for paid Slack customers.

Before the after-hours decline, Salesforce shares had been up 3.5% year-to-date, lagging behind the S&P 500 index’s 11% increase over the same period. Analysts will have the opportunity to delve deeper into the results during a conference call scheduled at 5 p.m. ET. This development is ongoing, and updates will be provided as more information becomes available.