In a disappointing turn of events, cloud software vendor Salesforce reported weaker-than-expected revenue for the fiscal first quarter, causing its shares to plummet as much as 17% in extended trading on Wednesday. The company's quarterly forecast fell short of estimates, with revenue growing at a modest 11% from the previous year.

According to the data released by Salesforce, the company's earnings for the quarter reached $2.44 per share, adjusted, surpassing the expected $2.38 per share. However, its revenue of $9.13 billion fell short of the projected $9.17 billion.

Furthermore, Salesforce's guidance for the current quarter also failed to meet Wall Street's expectations. The company called for adjusted earnings per share of $2.34 to $2.36 on $9.2 billion to $9.25 billion in revenue. Analysts surveyed had anticipated $2.40 in adjusted earnings per share on $9.37 billion in revenue.

It is worth noting that this is the first time since 2006 that Salesforce has fallen short on revenue, as reported by LSEG data. Despite this setback, all five of Salesforce's product areas contributed to the overall growth. However, revenue from the Professional Services and Other category experienced a decrease, coming in at $548 million, which was down 9% compared to the StreetAccount consensus of $572.9 million.

On a positive note, net income for Salesforce showed significant improvement, jumping from $199 million, or 20 cents per share, a year ago to $1.53 billion, or $1.56 per share, in the current quarter.

In terms of future projections, Salesforce raised its earnings forecast for the 2025 fiscal year. The company now expects adjusted earnings of $9.86 to $9.94 per share, compared to the previous range of $9.68 to $9.76. However, its revenue guidance remains at $37.7 billion to $38 billion, falling short of analysts' expectations of $38.08 billion in revenue.

During the quarter, Salesforce introduced its Einstein Copilot assistant for sales and customer service representatives and highlighted that all paid Slack customers would gain access to artificial intelligence features. These features include conversation summaries and daily recaps, further enhancing the company's offerings.

Prior to the earnings announcement, Salesforce shares had seen a moderate increase of 3.5% year-to-date. However, the significant drop in share price marks the company's worst day on the market since the 2008 financial crisis.

Executives from Salesforce are scheduled to discuss these results with analysts during a conference call commencing at 5 p.m. ET. Market experts and investors will be keenly observing the company's strategy to overcome the revenue shortfall and regain momentum in the market.

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