Salesforce’s earnings are due to be revealed after the close of the market on Wednesday, and the whole SaaS market will be bracing itself for a call that will “set the tone” for the entire industry, which has been buckling under fears of AI replacing it.
The company’s CEO, Marc Benioff, is set to lead a discussion about Salesforce’s Q4 and full-year fiscal 2026 results on February 25 at 1.30 PM PT (4.30 PM ET), appearing on Technology Business Programming Network (TBPN) to discuss the recent performance, then broadcasting a live “earnings show” broadcast from Salesforce Tower. This will be a historic day for Salesforce and for software as a whole.
Customers Aren’t Interested in Replacing Salesforce With AI
Analysts surveyed by FactSet expect Salesforce to reveal adjusted Q4 earnings of $3.05 a share on revenue of $11.19B – which would represent an increase from earnings of $2.78 from revenue of $9.99B for the same period last year, Barron’s reports.
Billy Fitzsimmons, analyst at Piper Sandler, wrote on Sunday: “CRM’s print has the potential to set the tone for enterprise software for the coming months amidst the debates around seat deflation and AI.”
Seat deflation means fewer users of SaaS, possibly due to AI tools handling the jobs that traditional software currently does.
Jackson Ader, analyst at KeyBanc Capital Markets, rates Salesforce as Overweight – but slashed his price target to $300 from $400 to reflect the stock’s drop. He wrote on Monday that he has heard that “Agentforce deals are moving from the proof of concept (POC) and trial phase into actual paying contracts” during his conversations with Salesforce customers.
Ader said: “This signals that, while many customers are still on pilot pricing, there is significant uplift in monetization happening in Agentforce base.”
Karl Keirstead, analyst at UBS, said on February 16 that the bottom line was that Agentforce feedback “up-ticked” and customers are “uninterested in replacing Salesforce with an AI-built alternative”. But, Keirstead added: “We did NOT pick up evidence to support a view that Salesforce’s backlog or revenue growth rates are bending higher.” Keirstead rates Salesforce as Neutral with a price target of $200.
A Bad Omen? Workday Tumbles Amid AI Danger
Workday shares dropped by around 10% premarket on Wednesday after forecasting downbeat revenue, amid this macroeconomic uncertainty for the industry.
The company, which provides HR and payroll software, has been suffering under similar pressures to Salesforce, with Workday shares tumbling around 40% this year amid the so-called ‘SaaSpocalypse’.
Anthropic – which recently unveiled 10 new ways for businesses to plug in its technology to key areas of their work (including Salesforce’s Slack) – had rolled out new enterprise tools earlier this year, which, according to Reuters, fuelled investors’ fears that AI could harm revenue for traditional SaaS businesses.
Workday forecast subscription revenue between $9.93B and $9.95B for fiscal year 2027 – coming under the roughly $10B analysts had been expecting.
Piper Sandler analysts said in a note: “In an environment where there is increased scrutinization of every metric amidst the AI debates, the guide likely does not allay investors’ general concerns for app layer names.”
Workday said that elongated sales cycles had pushed back some large enterprise deals, but most were still active, and a couple had already closed early in the first quarter.
Workday’s 12-month forward price-to-earnings multiple is 11.94. Salesforce’s is 13.98.
Final Thoughts
Tonight’s call is not just about Salesforce beating or missing estimates – it will be a definitive blow for one side of the ‘SaaS is dying’ argument. If Salesforce can demonstrate that Agentforce is becoming a major revenue engine, without shooting its own historic SaaS offerings in the foot through a ‘seat deflation’ narrative, it will go some way towards steadying nerves across the sector.
But more cautious guidance could have a compounding effect on the ‘SaaSpocalypse’ narrative. Industry peers like Workday have already shown that the market can be quite unforgiving at this very sensitive time for software.
Salesforce has to shake the doom-mongers. This earnings call is the time to do it.
