Salesforce, Inc. (CRM) reported mixed third-quarter fiscal 2025 results, wherein revenues surpassed the Zacks Consensus Estimate but earnings per share (EPS) missed the same. Its non-GAAP EPS of $2.41 fell short of the consensus mark of $2.43. However, the figure increased 14% year over year, driven by higher sales and the benefits of ongoing cost-restructuring initiatives, which include the trimming of the workforce and a reduction in office spaces.Stay up-to-date with all quarterly releases: See Zacks Ear ...

Salesforce (NYSE: CRM ) shares are up over 10% in pre-market hours following a relatively mediocre quarter in terms of actual numbers, as investors and analysts are excited about the company's Agentforce future.I aim to invest in companies with perfect qualitative attributes, buy them at an attractive price based on fundamentals, and hold them forever. I hope to publish articles covering such companies approximately 3 times per week, with extensive quarterly follow-ups and constant updates.I manage a concen ...

While its overall gains in 2024 are nothing to scoff at, Salesforce (NYSE: CRM) stock made its biggest moves of the year in the extended session between Tuesday, December 3, and Wednesday, December 4.Specifically, after an overall year-to-date (YTD) climb of 29.40% and after gaining 0.13% in the last session to close at $331.43, CRM shares rocketed 12.54% after the closing bell. Should this trend persist and the stock remains near its press time price of $373, Salesforce will open a full 45.63% in the green ...

Salesforce Q3 Performance - Salesforce reported Q3 revenue of $9.4 billion, reflecting an 8% year-over-year growth, driven by a 9% rise in subscription and support sales to $8.9 billion [2] - The company's current remaining performance obligations stood at $26.4 billion, up 30% year-over-year, slightly above street estimates [2] - Adjusted operating margin increased by 190 basis points year-over-year to 33.1% in Q3, resulting in adjusted earnings of $2.41 per share, a 14% year-over-year growth [3] - Salesforce expects Q4 revenue to rise between 7-9% and earnings to be in the range of $2.57-2.62 per share on an adjusted basis [3] CRM Stock Performance - CRM stock is up 40% year-to-date, outperforming the S&P 500 index, which is up 26% [4] - The stock has shown significant volatility in recent years, with annual returns of 14% in 2021, -48% in 2022, and 98% in 2023 [4] - Salesforce's valuation is estimated at $390 per share, based on 33x expected earnings of $11.77 per share in fiscal 2026, close to its average P/E ratio of over 32x in the last two years [5] Strategic Initiatives and Outlook - Salesforce is benefiting from its AI system, Agentforce, and continues to introduce AI capabilities across its offerings, driving increased adoption [2] - The company is focused on margin improvement and robust earnings growth in the coming years, supported by continued AI expansion [6] - Salesforce has spent nearly $8 billion on share repurchases so far this year, enhancing shareholder returns [6]

Revenue and Income - Revenue for the nine months ended October 31, 2024, was $27.9 billion, an increase of 9 percent year-over-year[123] - Total revenues for the three months ended October 31, 2024, were $9,444 million, an increase of 8% compared to $8,720 million for the same period in 2023[144] - Total revenues for the nine months ended October 31, 2024, were $27,902 million, representing a 9% growth compared to $25,570 million for the same period in 2023[155] - Subscription and support revenues accounted for approximately 94 percent of total revenues for the nine months ended October 31, 2024[127] - Subscription and support revenues accounted for 94% of total revenues for the three months ended October 31, 2024, up from 93% in the same period of 2023[149] Profitability Metrics - Income from operations for the same period was $5.4 billion, with an operating margin of approximately 19 percent, up from 13 percent year-over-year[125] - Diluted net income per share increased to $4.60, compared to $2.73 from the previous year[125] - Net income for the three months ended October 31, 2024, was $1,527 million, or 16% of total revenues, compared to $1,224 million, or 14%, in the same period of 2023[144] - Gross profit for the three months ended October 31, 2024, was $7,339 million, representing a gross margin of 78%, compared to $6,565 million and 75% in the same period of 2023[144] Cash Flow and Investments - Cash provided by operations was $9.1 billion, reflecting a 34 percent increase year-over-year[125] - Net cash provided by operating activities for the nine months ended October 31, 2024, was $9.1 billion, an increase of 33.6% from $6.8 billion in the same period of 2023[164] - The net cash used in investing activities for the nine months ended October 31, 2024, was $1.0 billion, compared to $859 million in the same period of 2023[166] - As of October 31, 2024, the company had cash, cash equivalents, and marketable securities totaling $12.8 billion, along with accounts receivable of $4.7 billion[162] Share Repurchase and Stock - The company repurchased approximately 30 million shares for approximately $7.7 billion during the nine months ended October 31, 2024[125] - The company repurchased $7.8 billion of common stock during the nine months ended October 31, 2024, compared to $5.9 billion in the same period of 2023, representing a 32.2% increase[167] - The company has a remaining authorization of $10.6 billion for share repurchases under its Share Repurchase Program as of October 31, 2024[171] Expenses and Cost Management - Operating expenses for the three months ended October 31, 2024, totaled $5,446 million, consistent with 58% of total revenues, compared to $5,064 million in the same period of 2023[144] - Total operating expenses for the nine months ended October 31, 2024, were $16,091 million, representing 58% of total revenues, a decrease from 62% in the same period last year[158] - Research and development expenses for the three months ended October 31, 2024, were $1,356 million, representing 14% of total revenues, consistent with the same percentage in 2023[144] - The company expects research and development expenses to remain consistent as a percentage of revenues while investing in new technologies, including AI and Data Cloud services[158] Strategic Initiatives and Acquisitions - The restructuring plan included a workforce reduction of approximately 10 percent, aimed at improving operating margins[122] - The company completed the acquisition of Zoomin Software Ltd. for approximately $344 million in cash and Own Data Company Ltd. for approximately $1.9 billion in cash in November 2024[175] - The company continues to invest in generative and agentic AI across all products to enhance customer engagement and operational efficiency[122] Performance Obligations and Attrition - Total remaining performance obligation as of October 31, 2024, was approximately $53.1 billion, a 10 percent increase year-over-year[125] - The attrition rate, excluding Slack self-service, was approximately 8 percent as of October 31, 2024[131] Tax and Debt - The tax provision for the three months ended October 31, 2024, was $219 million, compared to $263 million for the same period in 2023, reflecting a decrease of 16.7%[161] - The effective tax rate for the three months ended October 31, 2024, was 13%, down from 18% in the same period of 2023[161] - The company had senior unsecured debt outstanding with a total carrying value of $8.4 billion as of October 31, 2024[168] Strategic Investments - The company's strategic investment portfolio consisted of investments in over 400 companies with a combined carrying value of $4.8 billion as of October 31, 2024[186] - The company recorded unrealized gains of $1.162 billion and unrealized losses of $651 million in its equity securities portfolio as of October 31, 2024[186] - The company's ten largest privately held equity securities represent 37% of its total strategic investments as of October 31, 2024[186] Foreign Currency and Interest Rate Management - The company aims to minimize foreign currency transaction risk through the use of foreign currency forward contracts[180] - An immediate increase or decrease in interest rates of 100 basis points could result in a market value change of $56 million in the company's fixed-income portfolio[182] - Total revenue for the three months ended October 31, 2024, was minimally impacted by fluctuations in foreign currencies compared to the same period in 2023[181]

Financial Data and Key Metrics - Q3 revenue was $9.44 billion, up 8% year-over-year in nominal and constant currency [87] - Subscription and support revenue grew 9% year-over-year in nominal and constant currency [88] - Q3 non-GAAP operating margin was 33.1%, up 190 basis points year-over-year [92] - Q3 GAAP operating margin hit 20% for the first time in company history [92] - Q3 non-GAAP EPS was $2.41, inclusive of a $0.18 charge driven by mark-to-market adjustments [92] - Q3 operating cash flow was $2 billion, up 29% year-over-year [93] - Q3 free cash flow was $1.8 billion, up 30% year-over-year [93] - RPO ended Q3 at $53.1 billion, up 10% year-over-year [94] - Current RPO (cRPO) ended at $26.4 billion, an increase of slightly more than 10% year-over-year [94] Business Line Data and Key Metrics - Sales Cloud and Service Cloud achieved double-digit growth in Q3 [78] - Commerce Cloud powered close to 50 million orders during Cyber Week with nearly 100% uptime [79] - Marketing Cloud sent over 56 billion marketing messages [79] - Service Cloud helped customers field and resolve 3.8 billion cases [79] - Slack AI annual spend grew nearly 50% quarter-over-quarter [80] - Tableau and MuleSoft continued to be foundational with wins at Allegis, SiriusXM, Hitachi, Northwell Health, 3M, and CalOptima Health [81] Market Data and Key Metrics - Americas revenue grew 6% in nominal and constant currency [88] - EMEA grew 12% or 9% in constant currency [88] - APAC grew 16% or 14% in constant currency [88] - Strong new business growth in LatAm, Canada, and Australia [89] - Health and life sciences, manufacturing, and automotive and energy performed well, while retail and consumer goods were more measured [89] Company Strategy and Industry Competition - Salesforce is leading the way into a new horizon of digital labor with Agentforce [60] - Agentforce represents the next evolution of Salesforce, enabling AI agents to work alongside humans [15] - The company is uniquely positioned to become the leading enterprise AI platform and the source of a digital workforce [86] - Salesforce is integrating all apps on a single core platform with shared services for security, workflow, and user interfaces [49] - The company is rewriting all acquisitions into a common platform called "More Core" [50] Management Commentary on Operating Environment and Future Outlook - The company is excited about the opportunity ahead with Agentforce, which is reshaping the economics of business [86] - Salesforce is committed to building Agentforce with accountability, fairness, and transparency at the core [55] - The company expects jobs to evolve, roles to shift, and businesses to adapt as agents take on more of the workforce [56] - Entire industries are expected to emerge fueled by innovation and creativity using Agentforce [58] - The company is raising the low end of its full fiscal year '25 revenue guidance to $37.8 billion and maintaining the high end at $38 billion [97] Other Important Information - Agentforce went into production in the last week of Q3, delivering 200 deals [14] - The pipeline for future transactions is in the thousands [14] - Companies like FedEx, Adecco, Accenture, ACE Hardware, IBM, and RBC Wealth Management are building their digital labor forces on the Salesforce platform with Agentforce [24] - Salesforce is hiring 1,400 AEs globally in Q4 to capture increased demand for Agentforce [69] - The company executed $1.2 billion in share repurchases and paid nearly $400 million in dividends in Q3 [96] Q&A Session Question: Can you talk about the halo effect of Agentforce across product lines, particularly Data Cloud? [107] - The top 25 deals averaged more than five clouds each, indicating a complete agent-first approach [108] - Salesforce is the only company delivering a 360-degree view of customers, essential for an agent-first world [109] Question: What do the 200 Agentforce deals look like? Are they upsells? [112] - Initial Agentforce opportunities are with Service Cloud customers, but the platform extends to Sales Cloud, Marketing Cloud, Commerce Cloud, and Data Cloud [113][114] Question: How is the pricing discussion for Agentforce going with clients? [117] - Agentforce is priced at $2 per conversation, offering high value for customers [118] - Customers understand the cost of labor and see the value in deploying agents to manage interactions [120] Question: Can you talk more about the More Core initiative and its impact? [124] - More Core involves integrating all apps on a single platform, essential for AI functionality [125] - The initiative has led to increased productivity and engineering capabilities [125] Question: What has been the customer response to the new Foundations offering? [128] - Foundations allows customers to get a taste of Sales, Service, Marketing, Analytics, Data Cloud, and Slack [129] - The offering is part of the More Core initiative, making Salesforce functionality more accessible [129] Question: How far along are customers in having their data in order to get value from Agentforce? [132] - Customers with strong data architecture can turn on Data Cloud and leverage AI solutions in weeks or months [133] - Customers with siloed data may take up to six months to harmonize their data [133]

Tuesday, December 3, 2024It’s deja vu all over again, to quote the great Yogi Berra. The S&P 500 and the Nasdaq have once again notched new closing highs this afternoon, and for the third session in a row. That said, the S&P rally does look a bit long in the tooth, as the new record high is +2 points from Monday’s close, +0.04%. The Nasdaq fared better, +76 points, or +0.40%.The blue-chip Dow slipped again, albeit narrowly: -76 points, -0.17%. The small-cap Russell 2000, which had been enjoying a nice disbu ...

Salesforce.com (CRM) reported $9.44 billion in revenue for the quarter ended October 2024, representing a year-over-year increase of 8.3%. EPS of $2.41 for the same period compares to $2.11 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $9.34 billion, representing a surprise of +1.13%. The company delivered an EPS surprise of -0.82%, with the consensus EPS estimate being $2.43.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and ...

Salesforce.com (CRM) came out with quarterly earnings of $2.41 per share, missing the Zacks Consensus Estimate of $2.43 per share. This compares to earnings of $2.11 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -0.82%. A quarter ago, it was expected that this customer-management software developer would post earnings of $2.35 per share when it actually produced earnings of $2.56, delivering a surprise of 8.94%.Over the last ...

Salesforce (CRM) improved its full-year outlook and reported third-quarter results that beat the Street's expectations, sending shares higher in extended trading Tuesday.  The cloud software company saw revenue grow 8% year-over-year to $9.44 billion, above the analyst consensus compiled by Visible Alpha. Earnings per share (EPS) were $1.58, up from $1.25 a year earlier and higher than analysts' expectations. Salesforce bumped up the low end of its fiscal 2025 revenue guidance to between $37.8 billion and ...