Salesforce forecast disappoints as ‘SaaSpocalypse’ fears bite

TL;DR:

• Salesforce beat Q1 estimates with $11.13 billion revenue and adjusted EPS of $3.88, but Q2 revenue guidance of $11.27 billion to $11.35 billion came in below the $11.36 billion consensus.
• Shares are down nearly 33% year-to-date after a 20%-plus decline in 2025, with Wall Street using “SaaSpocalypse” to describe a wider sell-off in software stocks driven by Anthropic and OpenAI’s advanced coding tools.
• For UK enterprise software buyers, the question is no longer whether AI displaces per-seat SaaS — it is which incumbents successfully reposition as AI-agent businesses, and how quickly.

Salesforce delivered a paradoxical earnings update on Wednesday: a clear beat on the first quarter — $11.13 billion in revenue versus the $11.05 billion estimate, adjusted EPS of $3.88 against the $3.12 estimate — paired with second-quarter guidance that fell below Wall Street expectations. The company forecast Q2 revenue of $11.27 billion to $11.35 billion, just shy of the $11.36 billion consensus, and shares slipped in volatile extended trading.

What’s driving the discount

Salesforce shares have fallen nearly 33% in 2026 after a 20%-plus decline in 2025. The pressure is broader than company-specific execution: investors are pricing in AI’s potential to displace traditional software-as-a-service revenue streams. Advanced coding tools from Anthropic and OpenAI have contributed to a sell-off across software stocks, which Wall Street has now collectively branded the “SaaSpocalypse” — a term that captures the structural fear that AI agents could take over tasks once performed by enterprise software, and by extension by per-seat licence renewals.

CEO Marc Benioff said Salesforce secured 98 new deals worth over $1 million in annual contract value during the quarter, and that quarterly subscription and support revenue grew 14% — comfortably above expectations. The company is repositioning around Agentforce, its autonomous AI agent platform, which Benioff described as the core of Salesforce’s next phase.

The strategic question

Rebecca Wettemann, CEO of analyst firm Valoir, framed the issue plainly: “The next few quarters will be critical to Salesforce, both to show the value its core customers are getting from per-seat licenses and its Agentforce customers are getting from AI.” The challenge is genuinely hard. Existing customers paying per-seat for traditional CRM functionality need to see that those seats remain valuable, while new Agentforce contracts need to scale fast enough to offset any per-seat erosion.

For UK Salesforce customers — a sizeable portion of the FTSE 100 and mid-market — the implication is straightforward. Renewal conversations over the next 12-18 months will become more difficult on the buy side, as procurement teams ask whether they need fewer seats given AI assistance, while simultaneously evaluating Agentforce as a parallel commitment.

Looking forward

Salesforce is not the only incumbent under this pressure. Adobe, ServiceNow, Workday and Microsoft’s Dynamics business all face variants of the same question. The “SaaSpocalypse” framing may prove overdrawn — Salesforce posted a 14% increase in subscription revenue this quarter, hardly an apocalypse — but the structural question remains. Whether incumbents can transition customer relationships from licence-based to outcome-based pricing fast enough to defend revenue is now the central thesis question for enterprise SaaS investors.