Analysts Forecast 11.9% Q4 Growth as Salesforce Balances 114% AI ARR Surge
Salesforce will report Q4 earnings after the bell, with analysts expecting 11.9% revenue growth following last quarter’s $10.26B (+8.6%) result and EPS guidance beat. Agentforce ARR rose 114% YoY and free cash flow is strong, but 8% stock-based compensation and a P/E of 24 fuel concerns over margins and valuation.
1. Upcoming Earnings Expectations
Salesforce is set to announce its Q4 results after market close, with analysts projecting 11.9% year-over-year revenue growth. Last quarter delivered $10.26 billion in revenue, up 8.6%, along with a full-year EPS guidance beat, though the company has missed revenue estimates multiple times over the past two years.
2. AI Product Momentum
The company’s AI segment, led by Agentforce, achieved 114% year-over-year ARR growth, underpinning strong free cash flow generation. This surge underscores investor interest in Salesforce’s expanding AI capabilities and potential for continued subscription revenue expansion.
3. Cost Structure and Valuation Concerns
Salesforce’s stock-based compensation reached 8% of quarterly revenue, pressuring operating margins. Trading at a P/E of 24, some investors question the margin of safety and long-term impact of escalating compensation and AI investment on profitability.