Shares of Salesforce Inc. were up more than 8% in extended trading today after the company delivered third-quarter earnings that topped Wall Street’s forecasts.

The enterprise software giant reported a net income of $1.22 billion, well up from the $120 million profit it delivered in the year-ago quarter. Earnings before certain costs such as stock compensation came to $2.11 per share, while revenue rose 11% from a year earlier, to $8.72 billion.

Wall Street analysts had been looking for earnings of just $2.05 per share on sales of $8.72 billion.

Salesforce Chairman and Chief Executive Marc Benioff (pictured) said his organization is now the third-largest enterprise software company in the world in terms of revenue, as well as the No. 1 artificial intelligence-powered customer relationship management software provider. “We had another strong quarter of executing on our profitable growth plan we set in motion last year, delivering $8.7 billion in revenue and again raising our operating-margin guidance for this fiscal year,” he said.

The company’s biggest business unit, which provides customer support, saw sales increase by 12% from a year earlier, to $2.07 billion. Meanwhile, revenue from the sales software segment also rose 12%, to $1.9 billion. The platform and other revenue segment, which includes Slack, increased 11%, to $1.7 billion.

Salesforce also reported current remaining performance obligations of $23.9 billion, up 14% from a year ago and above its own forecast of 11% growth. RPO is a key measure of work to be performed over the next 12 months and therefore a useful indicator of future revenue growth.

The company, which has historically managed to grow its business by more than 20% a year, has seen its growth rates retreat over the past year. It has blamed this on enterprises reducing their spending as a result of economic uncertainty.

Even so, Salesforce’s stock has managed to grow by more than 70% this year, outperforming the broader Nasdaq index, which has increased by just 36% over the same period. This is because the company has still managed to improve its profitability by reducing its cost base.

For instance, in January, it announced it would be laying off 10% of its workforce and reducing the amount of office space it uses, as part of a restructuring plan. In addition to cutting costs, the company also raised its product prices for the first time in seven years.

Salesforce has also notably stepped up its investments in AI this year, fusing generative AI capabilities into a number of its main products and platforms to improve worker productivity. In an interview with Barron’s, Mike Spencer, Salesforce’s executive vice president for investor relations, said the company has seen a lot of early adoption of its new AI features. He added that AI has not yet become a major contributor to the company’s revenue base, but will likely have a meaningful impact during the next fiscal year.

Jeffries analyst Brent Thill shared that sentiment, telling Invezz that AI will have a big role in 2024, but not this year. “If AI kicks in, they should be able to charge more and drive even faster backlog growth,” he said.

In addition to its AI investments, Salesforce recently revealed that it would be adding more than 3,000 new workers, split more or less evenly among its sales, engineering and Data Cloud product teams.

“The September announcement of 3,300 new jobs after cutting 10% of employees earlier this year, signals a shift back to growth mode, with profitability now on an impressive trajectory,” Third Bridge analyst Charlie Miner told SiliconANGLE. “Salesforce’s terrific earnings are another signal that its core business is trending upward, as its increasingly profitable growth and forecasted AI tailwinds continue to fuel a tremendous YTD stock resurgence.”

Although the company is still waiting for AI to make a splash, it’s raising its fiscal 2024 forecast for operating cash flow growth to 33%, up from its previous call for a 30% increase. In addition, the company upped its full-year revenue guidance to a range of $34.75 billion to $34.8 billion. Previously, it had called for $34.7 billion at the bottom of its range. It also increased its earnings forecast to $8.18 to $8.19 a share, up from a previous forecast of $8.04 to $8.06 a share.

For the fourth quarter, Salesforce said it’s expecting revenue of $9.18 billion to $9.23 billion, which would represent growth of around 10% at the midpoint. The midpoint of that forecast is bang in line with Wall Street’s call for $9.21 billion in fourth-quarter sales.

Photo: Fortune Photo/Flickr