Salesforce and ServiceNow just posted strong quarters. Their results challenge fears that AI would replace enterprise software.
Instead, AI is expanding these platforms.
Salesforce raised FY27 guidance, while ServiceNow saw big AI growth.
What happened
Salesforce and ServiceNow reported strong quarters. Salesforce revenue rose 10.8% year-over-year to $11.35 billion. ServiceNow revenue grew 24.01% to $3.987 billion. Salesforce stock jumped 22.58% on earnings day; ServiceNow stock climbed 25.14% over the last month.
Why it matters
These results challenge the 'SaaSpocalypse' thesis that AI would replace enterprise software. Instead, AI is expanding these platforms. Salesforce's Agentforce ARR crossed $1.5 billion, growing over 240% year-over-year. ServiceNow's AI ACV crossed $1.00 billion, with agentic deployments increasing ninefold over nine months.
What to watch
Salesforce raised FY27 revenue guidance to $46.10 billion–$46.40 billion, but only $100 million of the raise came from organic performance. ServiceNow's pivot to 50% of net new business being non-seat based is a key signal. A $25 billion accelerated share repurchase by Salesforce is also notable.
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These results mark a significant shift in the AI-vs-SaaS narrative. For months, investors worried that AI would cannibalize enterprise software, but both companies reported blowout quarters. Salesforce's Agentforce and Data 360 ARR reached nearly $3.9 billion, and Marc Benioff dismissed the 'SaaSpocalypse' notion, saying 'this nonsense of this SaaSpocalypse, I think it's time for it to stop.' ServiceNow's Bill McDermott framed the platform as 'one platform, one system of action, any cloud, any agent, any workflow, any model, governed, secured, and accountable.'
Salesforce is positioning itself as the data spine for AI agents, introducing Headless 360 and ClaudeForce with Anthropic, which Benioff called 'the number one AI meeting the number one CRM.' ServiceNow is focusing on governance and cybersecurity, with over 500 customers live on AI Control Tower and acquisitions of Armis, Veza, and Moveworks. However, ServiceNow's Q2 benefited from U.S. Federal on-premise revenue pulled forward from Q3, and Salesforce's EPS was inflated by strategic investment gains, so the sustainability of this growth remains a question.
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