salesforce(US:CRM)2024-12-03 21:03Revenue and Growth - Third Quarter Revenue of $9.44 Billion, up 8% Year-Over-Year (Y/Y) and in Constant Currency (CC), with Subscription & Support Revenue of $8.88 Billion, up 9% Y/Y and in CC[3] - Fourth Quarter FY25 Revenue Guidance of $9.90 Billion - $10.10 Billion, up 7% - 9% Y/Y[4] - Full Year FY25 Revenue Guidance raised to $37.8 Billion - $38.0 Billion, up 8% - 9% Y/Y, with Subscription & Support Revenue Growth Guidance slightly below 10% Y/Y and approximately 10% in CC[4] - Total revenues for the three months ended October 31, 2024, were $9.444 billion, compared to $8.720 billion in the same period in 2023, representing an 8.3% increase[22] - Subscription and support revenues for the three months ended October 31, 2024, were $8.879 billion, up 9.1% from $8.141 billion in the same period in 2023[22] - Subscription and support revenues for the three months ended October 31, 2024, totaled $8.879 billion, up from $8.141 billion in the same period in 2023[30] - Total revenue for the three months ended October 31, 2024, was $9.444 billion, with $6.220 billion from the Americas, $2.228 billion from Europe, and $996 million from Asia Pacific[31] - Revenue from the Americas for the nine months ended October 31, 2024, was $18.483 billion, up from $17.113 billion in the same period in 2023[31] - Revenue from Europe for the nine months ended October 31, 2024, was $6.557 billion, compared to $5.923 billion in the same period in 2023[31] - Subscription and support revenues constant currency growth rates for Sales increased by 11% in Q3 2024 compared to Q3 2023[32] - Asia Pacific region showed the highest revenue constant currency growth rate at 14% in Q3 2024 compared to Q3 2023[32] - Constant currency revenue growth rates exclude the effect of foreign currency rate fluctuations[46] Profitability and Margins - Third Quarter GAAP Operating Margin of 20.0% and non-GAAP Operating Margin of 33.1%, up 280 basis points and 190 basis points Y/Y respectively[3] - Full Year FY25 GAAP Operating Margin Guidance raised to 19.8% and non-GAAP Operating Margin Guidance raised to 32.9%[4] - Gross profit margin for the three months ended October 31, 2024, was 78%, up from 75% in the same period in 2023[24] - Non-GAAP income from operations for Q3 2024 was $3,123 million, up from $2,717 million in Q3 2023[33] - Non-GAAP operating margin for Q3 2024 was 33.1%, compared to 31.2% in Q3 2023[33] - Non-GAAP operating margin excludes stock-based compensation, amortization of intangibles, and restructuring charges[39] Cash Flow and Capital Returns - Third Quarter Operating Cash Flow of $1.98 Billion, up 29% Y/Y, and Free Cash Flow of $1.78 Billion, up 30% Y/Y[3] - Full Year FY25 Operating Cash Flow Growth Guidance raised to 24% - 26% Y/Y[4] - Total capital returns to stockholders have surpassed $20 billion to date, with $1.6 billion returned in the third quarter through share repurchases and dividend payments[3] - Net cash provided by operating activities for the nine months ended October 31, 2024, was $9.122 billion, up from $6.831 billion in the same period in 2023, a 33.5% increase[26] - Free cash flow for Q3 2024 was $1.779 billion, a 30.2% increase from $1.366 billion in Q3 2023[36] - Free cash flow is defined as GAAP net cash provided by operating activities less capital expenditures[47] - Capital expenditures for the nine months ended October 31, 2024, were $504 million, down from $589 million in the same period in 2023[26] - Repurchases of common stock for the nine months ended October 31, 2024, totaled $7.753 billion, compared to $5.928 billion in the same period in 2023[26] - Capital expenditures for Q3 2024 were $204 million, a 22.9% increase from $166 million in Q3 2023[36] Performance Obligations and Liabilities - Current Remaining Performance Obligation (cRPO) of $26.4 Billion, up 10% Y/Y and in CC[3] - Remaining Performance Obligation (RPO) as of October 31, 2024, was $53.1 billion, with $26.4 billion current and $26.7 billion noncurrent[28] - Unearned revenue at the end of the three months ended October 31, 2024, was $13.472 billion, compared to $12.564 billion for the same period in 2023[29] - Total current remaining performance obligation constant currency growth rate was 10% in Q3 2024 compared to Q3 2023[32] Expenses and Investments - Research and development expenses for the three months ended October 31, 2024, were $1.356 billion, up 12.6% from $1.204 billion in the same period in 2023[22] - Sales and marketing expenses for the three months ended October 31, 2024, were $3.323 billion, up 4.7% from $3.173 billion in the same period in 2023[22] - Research and development expenses for Q3 2024 were $278 million, up from $238 million in Q3 2023[34] - Sales and marketing expenses for Q3 2024 were $312 million, compared to $275 million in Q3 2023[34] - Stock-based compensation expense for Q3 2024 was $820 million, compared to $693 million in Q3 2023[33] Net Income and Earnings Per Share - Net income for the three months ended October 31, 2024, was $1.527 billion, compared to $1.224 billion in the same period in 2023, a 24.8% increase[22] - Net income for the three months ended October 31, 2024, was $1.527 billion, compared to $1.224 billion for the same period in 2023, representing a 24.8% increase[26] - Non-GAAP net income for Q3 2024 was $2.321 billion, a 12.2% increase from $2.068 billion in Q3 2023[36] - GAAP basic net income per share for Q3 2024 was $1.60, a 27.0% increase from $1.26 in Q3 2023[36] - Non-GAAP basic net income per share for Q3 2024 was $2.43, a 14.1% increase from $2.13 in Q3 2023[36] - Non-GAAP net income for Q3 2024 was $2,321 million, compared to $2,068 million in Q3 2023[33] - Non-GAAP diluted net income per share for Q3 2024 was $2.41, up from $2.11 in Q3 2023[33] Balance Sheet and Equity - Cash and cash equivalents as of October 31, 2024, were $7.997 billion, down from $8.472 billion as of January 31, 2024[25] - Accounts receivable, net, as of October 31, 2024, were $4.741 billion, down from $11.414 billion as of January 31, 2024[25] - Total current liabilities as of October 31, 2024, were $19.375 billion, down from $26.631 billion as of January 31, 2024[25] - Total stockholders' equity as of October 31, 2024, was $58.525 billion, down from $59.646 billion as of January 31, 2024[25] AI and Innovation - Agentforce, Salesforce's AI system for enterprises, is highlighted as a key driver of transformation and digital labor innovation[4] Tax and Non-GAAP Adjustments - The company uses a projected non-GAAP tax rate of 23.5% for fiscal 2024 and 22.0% for fiscal 2025[45] - Non-GAAP operating margin excludes stock-based compensation, amortization of intangibles, and restructuring charges[39]