Salesforce CEO on robot sales agents, Microsoft's AI letdowns, and big earnings beat

A bounce-back quarter for Salesforce ( CRM ).

Shares of the SaaS company popped 4% in after-hours trading on Wednesday as it bested Wall Street estimates on sales, operating margins, and earnings.

The reaction — and tone around the quarter's performance — is in stark contrast to just three months ago, when the company shockingly missed sales estimates for the first time since 2006.

Demand remains strong, and there are "big goals" for operating margins and cash flow, Salesforce co-founder and CEO Marc Benioff told me on Yahoo Finance.

Sales increased 11% in Europe and 16% in Asia-Pacific on a constant currency basis. The company's Americas segment notched 8% sales growth.

"I don't think anyone expected a repeat performance of that [last quarter]," Third Bridge analyst Charlie Miner said on Yahoo Finance.

Added Miner, "What I think a lot of people are excited about right now is the beat on adjusted operating margin. Profitability has become fully the focus for Salesforce over the last six quarters, you can't miss there right now, especially when [sales] growth is decelerating into the single digits as it is only the second time in their company history."

The company maintained its full year sales outlook, but lifted its expectations for operating margins. That may spur enthusiasm that Salesforce's various AI initiatives will boost profits.

To that end, Benioff teased the coming launch of AgentForce, which features AI sales agents that go beyond chatbots and can resolve customer inquiries. Benioff says more details will be shared in September at the company's closely watched Dreamforce conference.

But he tells me the service is a higher margin opportunity and will be priced by conversation. Benioff envisions one billion agents in service by the end of fiscal year 2026.

He also says Microsoft has "misled" customers "that they have to do so much heavy lifting on the technology side." Salesforce aims to enable customers to train their models within its platform.

"They get real value from AI now," he says of Salesforce's offerings.

"One of the biggest initiatives in the field is around monetizing the AI theme within the Salesforce massive installed base. We believe this is a major land grab opportunity that could significantly benefit Salesforce over the coming years and could increase overall revenue by $4 billion+ annually based on our estimates and field work by 2025," Wedbush analyst Dan Ives wrote in a client note.

The earnings rundown

What else caught our attention: the outlook

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Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn