Salesforce (CRM) Q4 2025 Earnings Call February 27, 2025 01:05 PM ET Company Participants Michael Spencer - Executive Vice President of Investor RelationsMarc Benioff - Chair, CEO & Co-FounderBrian Millham - President & COOAmy Weaver - President & CFOKirk Materne - Senior Managing Director, Equity ResearchRaimo Lenschow - Managing DirectorRobin Washington - President & Chief Operating and Financial OfficerBrent Thill - Tech Sector Leader, Software/Internet ResearchMark Murphy - MD - Software Research Confer ...

Core Viewpoint - Salesforce reported weaker-than-expected quarterly revenue and issued a subdued forecast for fiscal 2026, leading to a nearly 5% decline in stock price during pre-market trading [1][3]. Financial Performance - Salesforce's adjusted EPS was $2.78, surpassing the $2.61 estimate, but revenue was $9.99 billion, falling short of the $10.04 billion consensus [3]. - For Q1 2026, Salesforce projected revenue between $9.71 billion and $9.76 billion, missing Wall Street's expectation of $9.9 billion [4]. - The full-year revenue forecast of $40.5 billion to $40.9 billion also came in below analysts' estimates of $41.35 billion [4]. AI Platform Adoption - Salesforce's AI platform, Agentforce, has secured over 3,000 paid deals and facilitated 380,000 customer interactions since its launch in October [7]. - Despite early traction, Agentforce's revenue contribution in fiscal 2026 is expected to be modest, with a more significant impact projected for fiscal 2027 [8]. - CFO Amy Weaver indicated that the adoption cycle is still early, with customer deployments ramping up gradually [8][9]. Analyst Reactions - Following the earnings release, analysts lowered their price targets on Salesforce stock due to mixed results and weaker guidance [10]. - Bernstein analyst Mark Moerdler maintained an 'Underperform' rating and reduced the price target from $286 to $243, citing concerns over the company's maturity in a competitive market [10]. - Stifel analyst Parker Lane retained a 'Buy' rating while lowering the price target from $425 to $375, suggesting that the market overreacted to short-term guidance [11].

Salesforce (CRM) reported fourth-quarter fiscal 2025 non-GAAP earnings of $2.78 per share, which beat the Zacks Consensus Estimate by 6.9%. The bottom line increased from the year-ago quarter’s earnings of $2.29 per share by 21.4%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.CRM’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing the same on one occasion, with an average surprise being 4.4%.Salesforce’s fiscal fourth-quarter revenues of $9.9 ...

Financial Data and Key Metrics Changes - The company reported a record revenue of $37.9 billion for fiscal year 2025, representing a 9% year-over-year increase in both nominal and constant currency [75][26] - Q4 revenue reached $10 billion, up 8% year-over-year, with a 9% increase in constant currency [21][75] - Operating cash flow for the full year was $13.1 billion, up 28% year-over-year, marking one of the best performances among software companies [27][82] - Non-GAAP operating margin for Q4 was 33.1%, up 170 basis points year-over-year, while GAAP operating margin was 18.2%, up 70 basis points [81][27] - Remaining performance obligation (RPO) surpassed $60 billion for the first time, ending Q4 at $63.4 billion, an 11% year-over-year increase [28][83] Business Line Data and Key Metrics Changes - The Data Cloud and AI product line generated $900 million in annual recurring revenue (ARR), growing 120% year-over-year [12][79] - The company closed over 3,000 paid Agentforce deals in Q4, indicating strong customer adoption [79][21] - Sales Cloud and Service Cloud both achieved double-digit growth in Q4, with Slack included in over a third of deals over a million dollars [62][76] Market Data and Key Metrics Changes - Revenue growth in the Americas was 8% in both nominal and constant currency, while EMEA grew 6% nominally and 7% in constant currency, and APAC grew 10% nominally and 14% in constant currency [76] - The company saw strong new business growth in Latin America, Japan, and Canada, while parts of EMEA remained constrained [77] Company Strategy and Development Direction - The company is focused on a unified platform strategy that integrates Customer 360 apps, Data Cloud, and Agentforce, aiming to lead the digital labor revolution [54][15] - The management emphasized the importance of a trinity of apps, data, and agents to drive customer success and operational efficiency [116][118] - The company plans to continue investing in high-growth opportunities, particularly in Agentforce and Data Cloud, while maintaining a disciplined approach to margin expansion [91][92] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the growth potential in the digital labor market, estimating it could be worth trillions of dollars [14] - The company expects fiscal year 2026 revenue to be between $40.5 billion and $40.9 billion, reflecting a growth of approximately 7% to 8% year-over-year [87] - Management anticipates continued strong cash flow growth and margin expansion, with a non-GAAP operating margin target of 34% for fiscal year 2026 [91][92] Other Important Information - The company executed $7.8 billion in share repurchases and issued $1.5 billion in dividends during fiscal year 2025 [85] - The management transition includes Robin Washington as the new Chief Operating and Financial Officer, succeeding Brian Millham and Amy Weaver [49][73] Q&A Session Summary Question: Insights on Agentforce opportunities and pricing model - Management discussed the transition from a seat-based pricing model to a consumption-based model, highlighting the potential for expanded contract sizes and positive financial outcomes [100][104] Question: Impact of Agentforce on other products - Management confirmed that Agentforce is creating a halo effect, enhancing the performance of core products and driving new workflows and engagements [125][128] Question: Management transition and future outlook - Management expressed confidence in the new leadership structure and the strategic direction, emphasizing the importance of combining operational and financial oversight [134][135]

Salesforce.com (CRM) reported $9.99 billion in revenue for the quarter ended January 2025, representing a year-over-year increase of 7.6%. EPS of $2.78 for the same period compares to $2.29 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $10.02 billion, representing a surprise of -0.29%. The company delivered an EPS surprise of +6.92%, with the consensus EPS estimate being $2.60.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- an ...

Core Viewpoint - Salesforce.com reported quarterly earnings of $2.78 per share, exceeding the Zacks Consensus Estimate of $2.60 per share, and showing an increase from $2.29 per share a year ago, representing an earnings surprise of 6.92% [1][2] Financial Performance - The company posted revenues of $9.99 billion for the quarter ended January 2025, which was slightly below the Zacks Consensus Estimate by 0.29%, but an increase from $9.29 billion year-over-year [2] - Over the last four quarters, Salesforce.com has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Salesforce.com shares have declined approximately 8.5% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [3] - The current Zacks Rank for Salesforce.com is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.59 on revenues of $9.91 billion, and for the current fiscal year, it is $11.15 on revenues of $41.27 billion [7] - The trend of estimate revisions for Salesforce.com is mixed, which could change following the recent earnings report [6] Industry Context - The Computer - Software industry, to which Salesforce.com belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting that the outlook for the industry can significantly impact stock performance [8]

Here's our initial take on Salesforce's (CRM 0.47%) fourth-quarter financial report.Key MetricsMetricQ4 2024Q4 2025Changevs. ExpectationsRevenue$9.2 billion$9.9 billion+7.6%MissedEarnings per share$2.29$2.78+21.4%BeatRemaining performance obligations$56.9 billion$63.4 billion+11%n/aFree cash flow$9.5 billion$12.4 billion+31%n/aStrong Quarter, but Guidance DisappointsSalesforce posted nearly 8% revenue growth and 21% growth in earnings per share in the last three months of its fiscal 2025, but the revenue nu ...

Core Insights - Salesforce reported mixed fiscal year 2025 fourth-quarter earnings, with adjusted EPS of $2.78 exceeding expectations but revenue of $9.99 billion falling slightly short of the $10.04 billion estimate [1][2] Financial Performance - Adjusted EPS for Q4 FY25 was $2.78, surpassing analysts' estimate of $2.61, and showing a year-over-year increase of 21.4% from $2.29 [3] - Q4 revenue was $9.99 billion, an 8% increase year-over-year from $9.3 billion, but below the expected $10.04 billion [3][6] - Operating cash flow reached $3.97 billion, up 16.7% from the previous year, contributing to a non-GAAP operating margin of 33%, compared to 31.4% in the prior period [3][8] - Total remaining performance obligations (RPO) stood at $63.4 billion, reflecting an 11.4% increase from $56.9 billion year-over-year [3] Business Overview - Salesforce is recognized for its Customer 360 platform, which integrates various tools for a unified customer experience across multiple business functions [4] - The company is focusing on AI innovation, particularly through its Agentforce and Data Cloud platforms, which are seen as key growth drivers [5] Strategic Initiatives - Annual recurring revenue from AI and Data Cloud sectors surged to $900 million, marking a 120% growth [7] - The integration of AI in customer interactions has shown significant results, with Agentforce facilitating 380,000 conversations and achieving an 84% resolution rate [7] - Strategic partnerships, particularly with Google Cloud, are enhancing Salesforce's AI capabilities and overall offerings [8] Future Outlook - For fiscal year 2026, Salesforce management provided revenue guidance of $40.5 billion to $40.9 billion, targeting a growth rate of 7%-8% year-over-year [9] - Projected operating cash flows are expected to grow by approximately 10% to 11%, indicating confidence in operational improvements [9] - The company anticipates adjusted EPS of $2.53 to $2.55 for Q1 FY26, with revenue estimates of $9.71 billion to $9.76 billion, which are below analysts' consensus [9]

Group 1 - Salesforce reported fiscal fourth-quarter revenue of $9.99 billion, an 8% year-over-year growth, which was slightly below analyst expectations [1] - Adjusted earnings per share for the fourth quarter were $1.75, compared to $1.74 a year earlier, but missed estimates [1] - Shares of Salesforce fell about 5% in extended trading following the earnings report, and have lost approximately 8% since the beginning of the year [3] Group 2 - For fiscal 2026, Salesforce projected full-year revenue between $40.5 billion and $40.9 billion, and adjusted EPS between $11.09 and $11.17, both below analyst consensus [2] - The analyst consensus for revenue was $41.32 billion and for EPS was $11.19 [2] - Salesforce announced that former Gilead Sciences CFO Robin Washington will join the company as chief operating and financial officer on March 21 [2]

Core Insights - Salesforce reported weaker-than-expected quarterly revenue and issued a forecast that fell short of analysts' estimates, leading to a 6% decline in stock price during extended trading [1] Financial Performance - Revenue increased by 7.6% year-over-year for the quarter ending January 31, totaling $9.99 billion, while net income rose to $1.71 billion or $1.75 per share compared to $1.45 billion or $1.47 per share a year earlier [1][5] - Revenue from customer service products was $2.33 billion, up about 8%, but below the $2.37 billion consensus [2] - In the sales category, revenue was $2.13 billion, also up 8%, but trailing the $2.17 billion consensus [2] Future Guidance - For the fiscal first quarter, the company projected adjusted earnings per share of $2.53 to $2.55, with revenue expected between $9.71 billion and $9.76 billion, while analysts had anticipated $2.61 per share and $9.9 billion in revenue [3] - For the 2026 fiscal year, Salesforce targets adjusted earnings per share of $11.09 to $11.17 on revenue of $40.5 billion to $40.9 billion, implying a growth rate of 7.4% [4] Product Development - The company introduced its second-generation Agentforce AI technology, which has been involved in over 3,000 paid deals and 380,000 conversations, with human intervention in only 2% of cases [2][3]