Core Insights - Salesforce acquired Spiff for $419 million, which includes $374 million in cash, to enhance its management of incentive-based compensation schemes for customers [1][2] - The acquisition follows Salesforce's first revenue miss in nearly 20 years, reporting quarterly revenues of $9.13 billion against analyst expectations of $9.15 billion [1][3] Acquisition Details - Spiff was last valued at $260 million in May 2023 before the acquisition announcement in December 2023, with the deal closing in February 2024 [2] - Spiff has raised approximately $110 million from various investors, including Salesforce, Lightspeed Venture Partners, and Norwest Ventures [2] Market Context - The acquisition reflects a trend where stronger companies are still able to command high prices despite a challenging funding environment for startups [3] - Spiff reported significant growth, doubling its customer base to 1,000 and achieving 100% revenue growth in the last year, with an overall revenue increase of 800% since its founding during the pandemic [3] Strategic Focus - Spiff has developed AI-based no-code, self-service tools aimed at helping customers create sales commission schemes, which aligns with Salesforce's goals to grow its revenue [4] - Salesforce recorded $323 million in goodwill related to the acquisition, indicating the value of the assembled workforce and market opportunities, along with $52 million in intangible assets attributed to Spiff's technology and customer base [4]

Financial Update Q1 FY25 NYSE: CRM @Salesforce_ir Safe Harbor "Safe harbor" statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements about the Company's financial and operating results and guidance, which include, but are not limited to, expected GAAP and non-GAAP financial and other operating and non-operating results, including revenue, net income, earnings per share, operating cash flow growth, operating margin, expected revenue growth, e ...

Welcome to Salesforce's fiscal 2025 first quarter results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. I would now like to hand the conference over to your speaker. Mike Spencer, Executive Vice President o ...

Key TakeawaysSalesforce shares plunged more than 16% in extended trade on Wednesday after the company reported its first quarterly revenue miss in 18 years and issued weak annual guidance.The Salesforce share price finds key support at $226 and $192 from key horizontal trendlines connecting prior price action.The cloud software maker’s current Remaining Performance Obligation (cRPO) metric, which combines deferred revenue and order backlog, indicates slowing momentum.Chief operating officer Brian Millham to ...

Financial Data and Key Metrics Changes - In Q1 2025, Salesforce reported revenue of $9.13 billion, an 11% year-over-year increase in both nominal and constant currency [6][19] - Subscription and support revenue grew by 12% year-over-year, with a 13% increase in constant currency [6][19] - Non-GAAP operating margin improved to 32.1%, up 450 basis points year-over-year [20] - Operating cash flow reached $6.25 billion, a 39% increase year-over-year, while free cash flow was $6.1 billion, up 43% year-over-year [20] Business Line Data and Key Metrics Changes - Data Cloud was included in 25% of deals over $1 million, with over 1,000 new Data Cloud customers added for the second consecutive quarter [9][15] - 8 trillion records were ingested into Data Cloud, a 42% year-over-year increase, and 2 quadrillion records were processed, a 217% increase compared to last year [9][29] - Nearly half of the top 50 wins included six or more of Salesforce's clouds, indicating strong multi-cloud adoption [9] Market Data and Key Metrics Changes - Americas revenue grew by 11%, EMEA by 10% (or 9% in constant currency), and APAC by 14% (or 21% in constant currency) [19] - Strong new business growth was noted in Japan, India, and Canada, while the US, parts of LATAM, and EMEA faced constraints [19] Company Strategy and Development Direction - Salesforce is focused on AI transformation, managing over 250 petabytes of customer data, which is critical for AI applications [6][8] - The company aims to leverage its Data Cloud to provide a single source of truth for customers, enhancing AI capabilities across its platforms [9][29] - Continued emphasis on multi-cloud deals and industry-specific solutions as growth levers [14][15] Management's Comments on Operating Environment and Future Outlook - Management noted a measured buying environment with elongated deal cycles and high levels of budget scrutiny [14][19] - Despite challenges, there is strong demand for Data Cloud and multi-cloud adoption, with expectations of maintaining revenue guidance for fiscal year 2025 [22][27] - The company anticipates continued strong cash flow generation and margin expansion, with a focus on disciplined strategic investments [23][24] Other Important Information - Salesforce paid its first-ever quarterly dividend of $0.40 per share, totaling $388 million, and returned over $2.5 billion through share repurchases and dividends [21] - The company expects fiscal year 2025 non-GAAP operating margin of 32.5%, representing a 200 basis point improvement year-over-year [23] Q&A Session Summary Question: Concerns about CRPO growth and revenue guidance - Management expressed confidence in maintaining the revenue guidance despite CRPO growth being below expectations, citing strong demand in multi-cloud adoption and industry projects [26][27] Question: Impact of go-to-market changes on sales productivity - Changes made in the go-to-market strategy are intended to drive long-term productivity, with expectations for improved performance in subsequent quarters [31][32] Question: Geographic performance and weakness in EMEA - EMEA experienced pronounced weakness, with similar challenges noted in the Americas, while regions like Canada and Japan showed strong performance [33][34] Question: Effects of AI on software spending - Management acknowledged that companies are rationalizing software investments while preparing for AI capabilities, which may temporarily impact spending [36][39] Question: M&A framework and strategy - Salesforce continues to focus on both organic and inorganic innovation, with a cautious approach to M&A that ensures any acquisition is accretive and aligns with their strategic goals [42][44]

After Salesforce posted its first revenue miss since 2006, CEO Marc Benioff told CNBC's Jim Cramer how the market for enterprise software companies has changed since the pandemic."You can't control the buying environment. The reality is, you're going to have heterogeneous buying environments, it's going to happen," Benioff said. "And we're in this post-pandemic reality where the buying environment has been, and we've talked about this now for a few quarters, been very measured for enterprise software compan ...

Wednesday, May 29th, 2024Bond yields kept moving precariously higher today. This is a major reason for today’s big selloff in the equities markets, just a day removed from the Nasdaq notching another all-time closing high. But it was the Dow that took it on the chin for this session, down -411 points or -1.06%, bringing levels down to where they were a month ago. The S&P 500 was down -0.74% on the day, while the Nasdaq shed -99 points, -0.58%. The small-cap Russell 2000 was down an even more precarious -1.4 ...

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Salesforce, Inc. as of April 30, 2024, and for the three months then ended, including Balance Sheets, Statements of Operations, Comprehensive Income, Stockholders' Equity, and Cash Flows, along with accompanying notes [Condensed Consolidated Balance Sheets](index=3&type=page&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets of **$96.18 billion** as of April 30, 2024, a decrease from **$99.82 billion** as of January 31, 2024, primarily due to reductions in accounts receivable and unearned revenue, while cash and marketable securities increased to **$17.67 billion** from **$14.19 billion** Condensed Consolidated Balance Sheet (in millions) | Account | April 30, 2024 | January 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $25,604 | $29,074 | | Goodwill | $48,940 | $48,620 | | **Total Assets** | **$96,180** | **$99,823** | | **Total Current Liabilities** | $23,149 | $26,631 | | Unearned Revenue | $16,061 | $19,003 | | Total Debt (Current & Noncurrent) | $9,429 | $9,426 | | **Total Liabilities** | **$36,497** | **$40,177** | | **Total Stockholders' Equity** | **$59,683** | **$59,646** | [Condensed Consolidated Statements of Operations](index=4&type=page&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended April 30, 2024, total revenues increased **11%** year-over-year to **$9.13 billion**, with net income substantially increasing to **$1.53 billion** from **$199 million** in the prior-year period, resulting in diluted EPS of **$1.56** up from **$0.20** Statement of Operations Highlights (in millions, except per share data) | Metric | Q1 FY2025 (ended Apr 30, 2024) | Q1 FY2024 (ended Apr 30, 2023) | | :--- | :--- | :--- | | Total Revenues | $9,133 | $8,247 | | Gross Profit | $6,971 | $6,122 | | Income from Operations | $1,709 | $412 | | Net Income | $1,533 | $199 | | Diluted Net Income per Share | $1.56 | $0.20 | [Condensed Consolidated Statements of Cash Flows](index=7&type=page&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities for the three months ended April 30, 2024, was **$6.25 billion**, a **39%** increase from **$4.49 billion** in the prior year, with major cash uses including **$2.65 billion** for investing activities and **$2.11 billion** for financing activities Cash Flow Summary (in millions) | Activity | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,247 | $4,491 | | Net cash provided by (used in) investing activities | $(2,651) | $347 | | Net cash used in financing activities | $(2,108) | $(2,716) | | **Net increase in cash and cash equivalents** | **$1,486** | **$2,139** | [Notes to Condensed Consolidated Financial Statements](index=9&type=page&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed information on significant accounting policies, revenue disaggregation, investments, business combinations, debt, and restructuring activities, highlighting the acquisition of Spiff, Inc., ongoing restructuring efforts, the initiation of a cash dividend, and an expanded share repurchase program - The company operates as a single operating segment, as the Chief Operating Decision Maker (CODM) evaluates financial information on a consolidated basis[29](index=29&type=chunk) - In February 2024, the company acquired Spiff, Inc., an incentive compensation management platform, for a fair value of **$419 million**, resulting in **$323 million** of goodwill[85](index=85&type=chunk) - The company initiated a restructuring plan in January 2023 to reduce costs, which is substantially complete for employee actions and ongoing for real estate exits, with a new workforce reduction initiative beginning in Q1 FY25[94](index=94&type=chunk) - In February 2024, the company announced its first-ever cash dividend of **$0.40 per share**, which was paid in April 2024[102](index=102&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's Q1 FY25 financial performance, highlighting **11%** year-over-year revenue growth to **$9.1 billion** and a significant increase in operating margin to **19%**, driven by AI investment, multi-cloud adoption, and operational efficiency, while noting macroeconomic impacts Q1 FY2025 Financial Highlights | Metric | Q1 FY2025 | Change (YoY) | | :--- | :--- | :--- | | Revenue | $9.1 billion | +11% | | Operating Margin | 19% | +14 p.p. | | Diluted EPS | $1.56 | +$1.36 | | Operating Cash Flow | $6.2 billion | +39% | | Remaining Performance Obligation | $53.9 billion | +15% | - The company is focused on driving profitable growth through cost reduction and operational efficiencies, including a restructuring plan initiated in January 2023 and a targeted workforce reduction in Q1 FY2025[114](index=114&type=chunk) - Macroeconomic pressures continue to affect the business, leading to elongated sales cycles, additional deal approval layers, and deal compression[116](index=116&type=chunk) - The Board of Directors authorized an additional **$10.0 billion** for the Share Repurchase Program in February 2024, bringing the total authorization to **$30.0 billion**, with the company repurchasing **$2.2 billion** of stock in Q1 FY25[101](index=101&type=chunk)[116](index=116&type=chunk) [Results of Operations](index=33&type=page&id=Results%20of%20Operations) Total revenue for Q1 FY25 grew **11%** to **$9.13 billion**, primarily driven by a **12%** increase in Subscription and Support revenue, while Professional Services revenue declined **9%**, and operating expenses as a percentage of revenue decreased from **69%** to **57%** due to lower restructuring costs Subscription and Support Revenue by Service Offering (in millions) | Service Offering | Q1 FY2025 Revenue | Growth Rate (YoY) | | :--- | :--- | :--- | | Sales | $1,998 | 10% | | Service | $2,182 | 11% | | Platform and Other | $1,718 | 10% | | Marketing and Commerce | $1,282 | 10% | | Integration and Analytics | $1,405 | 24% | | **Total** | **$8,585** | **12%** | Total Revenue by Geography (in millions) | Geography | Q1 FY2025 Revenue | Growth Rate (YoY) | | :--- | :--- | :--- | | Americas | $6,062 | 11% | | Europe | $2,145 | 10% | | Asia Pacific | $926 | 14% | | **Total** | **$9,133** | **11%** | - The decrease in operating expenses was largely driven by restructuring charges of only **$8 million** in Q1 FY25, compared to **$711 million** in Q1 FY24[138](index=138&type=chunk) [Liquidity and Capital Resources](index=36&type=page&id=Liquidity%20and%20Capital%20Resources) As of April 30, 2024, Salesforce held **$17.7 billion** in cash, cash equivalents, and marketable securities, generated **$6.2 billion** in operating cash flow, and used cash for **$2.2 billion** in share repurchases, **$388 million** for its first dividend, and **$338 million** for the Spiff acquisition, with **$9.4 billion** in outstanding senior debt and an undrawn **$3.0 billion** revolving credit facility Key Liquidity and Capital Metrics (as of April 30, 2024) | Metric | Value (in billions) | | :--- | :--- | | Cash, Cash Equivalents & Marketable Securities | $17.7 | | Accounts Receivable | $4.3 | | Total Debt (Carrying Value) | $9.4 | | Revolving Credit Facility (undrawn) | $3.0 | - The company repurchased **7 million shares** for approximately **$2.2 billion** in Q1 FY25 and has **$16.2 billion** remaining under its total **$30.0 billion** share repurchase authorization[150](index=150&type=chunk) - The company paid its first-ever cash dividend in April 2024, totaling approximately **$388 million**[152](index=152&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to financial market risks, including foreign currency exchange risk, interest rate sensitivity, and risks associated with its strategic investment portfolio, noting the use of forward contracts to mitigate exchange rate volatility and potential impacts on market value from interest rate changes - The company is exposed to foreign currency fluctuations, primarily in the Euro, British Pound, Japanese Yen, Canadian Dollar, Australian Dollar, and Brazilian Real, and uses forward contracts to minimize this risk[158](index=158&type=chunk)[159](index=159&type=chunk) - The fixed-income portfolio is subject to interest rate risk, where an immediate **100 basis point** change in interest rates could result in an **$80 million** change in the portfolio's market value[161](index=161&type=chunk) - The strategic investment portfolio totaled **$5.0 billion** as of April 30, 2024, with investments in over **400** companies, and is subject to volatility and risk of capital loss[165](index=165&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of April 30, 2024, and confirmed no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures are effective to provide reasonable assurance that required information is recorded, processed, and reported in a timely manner[169](index=169&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the quarter ended April 30, 2024[170](index=170&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including an ongoing securities class action litigation against its subsidiary Slack related to its 2019 direct listing, which was remanded by the U.S. Supreme Court for further proceedings, though management does not expect a material adverse impact on financial statements - The company is subject to ongoing securities class action litigation related to its subsidiary, Slack, concerning its 2019 registration statement, with the case remanded by the U.S. Supreme Court for further proceedings[110](index=110&type=chunk) - Management makes provisions for legal liabilities when probable and reasonably estimable, but believes the resolution of current matters will not have a material adverse impact on the company's financial statements[108](index=108&type=chunk)[109](index=109&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant operational, strategic, legal, financial, stock ownership, and general risks, including security breaches, service disruptions, intense competition, acquisition integration challenges, evolving data privacy and AI regulations, macroeconomic volatility, customer retention, and stock price fluctuations - **Operational Risks:** Major risks include security breaches, defects or disruptions in services, reliance on third-party infrastructure, and challenges in integrating acquisitions[176](index=176&type=chunk) - **Strategic & Industry Risks:** Key risks involve intense competition, the need to innovate and keep pace with technology (especially AI), maintaining brand reputation, and managing social and ethical issues related to AI[177](index=177&type=chunk) - **Legal & Regulatory Risks:** Significant risks stem from evolving data privacy laws (like GDPR and CCPA), cross-border data transfer restrictions, industry-specific regulations, and potential lawsuits for intellectual property infringement[178](index=178&type=chunk) - **Financial Risks:** The company faces risks from fluctuations in growth and tax rates, currency exchange volatility, and the impact of its subscription-based revenue model, where business downturns may not be immediately reflected in results[179](index=179&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity, including the repurchase of **7 million shares** for approximately **$2.2 billion** during the three months ended April 30, 2024, and the issuance of **45,845** unregistered shares of common stock to former Spiff stockholders as part of the acquisition Share Repurchases (Q1 FY2025) | Month | Total Shares Purchased (millions) | Average Price Paid Per Share | | :--- | :--- | :--- | | February 2024 | 1 | $289.94 | | March 2024 | 3 | $305.32 | | April 2024 | 3 | $283.41 | | **Total** | **7** | **N/A** | - As of April 30, 2024, approximately **$16.2 billion** remained available for repurchase under the company's total **$30.0 billion** authorization[101](index=101&type=chunk)[224](index=224&type=chunk) - On February 1, 2024, the company issued **45,845** unregistered shares of common stock to certain former stockholders of Spiff, Inc. as part of the acquisition[225](index=225&type=chunk)

For the quarter ended April 2024, Salesforce.com (CRM) reported revenue of $9.13 billion, up 10.7% over the same period last year. EPS came in at $2.44, compared to $1.69 in the year-ago quarter.The reported revenue represents a surprise of -0.07% over the Zacks Consensus Estimate of $9.14 billion. With the consensus EPS estimate being $2.38, the EPS surprise was +2.52%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street exp ...

Salesforce.com (CRM) came out with quarterly earnings of $2.44 per share, beating the Zacks Consensus Estimate of $2.38 per share. This compares to earnings of $1.69 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 2.52%. A quarter ago, it was expected that this customer-management software developer would post earnings of $2.26 per share when it actually produced earnings of $2.29, delivering a surprise of 1.33%.Over the last ...