Salesforce shares plunge 16% on first revenue miss since 2006

Salesforce shares plummeted as much as 17% in extended trading on Wednesday after the cloud software vendor reported weaker-than-expected revenue and issued guidance that trailed Wall Street's expectations.

Here's how the company did, compared to the LSEG consensus:

Salesforce called for adjusted earnings per share in the current quarter of $2.34 to $2.36 on $9.2 billion to $9.25 billion in revenue. Analysts surveyed by LSEG had expected $2.40 in adjusted earnings per share on $9.37 billion in revenue.

Revenue in the fiscal first quarter, which ended April 30, increased 11% from $8.25 billion a year earlier, Salesforce said in a statement. It is the first time since 2006 that Salesforce fell short on revenue, according to LSEG data.

Salesforce saw budget scrutiny and longer deal cycles than usual during the quarter, president and operating chief Brian Millham told analysts on a conference call. Management implemented go-to-market changes that cut into bookings, Millham said.

All five of Salesforce's product areas contributed to the growth. But revenue from the Professional Services and Other category, at $548 million, was down 9% and under the StreetAccount consensus of $572.9 million.

Net income jumped to $1.53 billion, or $1.56 per share, from $199 million, or 20 cents per share a year ago.

Salesforce lifted its earnings forecast for the 2025 fiscal year. The company now expects adjusted earnings of $9.86 to $9.94 per share, compared to $9.68 to $9.76 three months ago. Its revenue guidance remains at $37.7 billion to $38 billion. Analysts polled by LSEG were looking for $9.76 in adjusted earnings per share and $38.08 billion in revenue.

Amy Weaver, Salesforce's finance chief, said she expects deal compression and slowing