Salesforce Surges on Strong Q2 Earnings and AI-Driven Growth Outlook

Salesforce gains as Wall Street sees results, guidance as 'huge step forward'

"CRM delivered its July results which were above Street expectations on the top and bottom-lines and provided solid October guidance in a bounce back quarter that was a huge step forward for [Marc] Benioff & Co," Wedbush Securities analyst Dan Ives wrote in a note to clients. Ives added that Salesforce is still dealing with "various headwinds in a choppy backdrop," but the results and guidance proved to be a "much-needed bounce back quarter," as the company made major strides in monetizing artificial intelligence across its customer base. For the period ending July 31, Salesforce earned an adjusted $2.56 per share as revenue rose 8.4% year-over-year to come in at $9.33B. Marketing and commerce revenue came in at $1.31B during the period, while revenue from services was $2.26B. Subscription and support revenue generated $8.76B during the period. Looking to the third-quarter, Salesforce expects to earn between $2.42 and $2.44 per share on an adjusted basis, above the $2.42 analysts were expecting. Sales are forecast to be between $9.31B and $9.36B, with the midpoint of $9.34B below the $9.4B estimate. Salesforce also upped its operating cash flow growth guidance to between 23% and 25%, and its operating margin guidance to 19.7% on a GAAP basis and 32.8% on a non-GAAP basis. Others on Wall Street also praised Salesforce's results, including Stifel analyst Parker Lane, who raised his price target to $320 from $300. Lane, who has a Buy rating on Salesforce, also highlighted the strength in bookings, current remaining performance obligations and AI benefits, citing Benioff's comments around Einstein and Agentforce, the Einstein-powered generative AI agents. And with the company having signed 1,500 AI deals in the second quarter, Lane said Salesforce is "well positioned" to be a leader to bring generative AI to the enterprise in a profitable manner. Barclays analyst Raimo Lenschow, who has an Overweight rating and $305 price target on Salesforce, agreed. "Solid Q2 results and maintained FY guidance seem to be enough for shares in the short term, given nervous investors," Lenschow wrote. "Looking at cRPO and its impact on future revenue shows that not all is perfect though. So, a boost from AI, post Dreamforce and the [general availability] of the new AI solution can't come quick enough to revive momentum."

Salesforce Stock Jumps on Second-Quarter Earnings Surprise

CEO Mark Benioff in a press release lauded the company's AI offerings. Salesforce (CRM) delivered second-quarter results that beat expectations on the top and bottom lines and maintained its full-year guidance, sending the company's shares higher in late action. The cloud software company posted net income of $1.4 billion, or $1.47 per share, up more than 12% year-over-year, on revenue of $9.3 billion, up 8%. Both figures beat the Visible Alpha analyst consensus. Salesforce posted a record-high operating margin of 19.1%, a figure some analysts had their eyes on after the company's disappointing first-quarter results sent shares tumbling. The company maintained its fiscal 2025 revenue guidance of $37 billion to $38 billion, and upped its earnings per share projection by 1 cent to between $6.05 and $6.13. Wall Street is looking for $37.8 billion and $6.11 per share, respectively, according to estimates compiled by Visible Alpha. CEO Marc Benioff pointed to the potential of Salesforce's Agentforce AI platform. "We're reimagining enterprise software for a new world where humans with autonomous agents drive customer success together," he said. Shares of Salesforce were recently up nearly 4% in after-hours trading after sliding some 2% in the regular session.

Salesforce Raises Full-Year Profit Outlook | The Motley Fool

Salesforce's fiscal 2025 second-quarter results came in ahead of management guidance on several financial metrics. Customer relationship management specialist Salesforce (CRM -2.01%) reported fiscal 2025 second-quarter financial results on Wednesday that showed solid growth across multiple metrics. Second quarter revenue of $9.33 billion rose 8% year over year and exceeded internal guidance. Earnings per share (EPS) of $1.47 also topped management expectations. Overall, Salesforce's quarter (which ended July 31, 2024) showed notable year-over-year growth. Management also noted that Chief Financial Officer Amy Weaver plans to step down from her position. Weaver will remain CFO until a successor is appointed and will stay on as an advisor. Source: Salesforce. Note: Guidance is based on management guidance provided on May 29, 2024. cRPO = Current remaining performance obligations. YOY = Year over year. Founded in 1999, Salesforce is widely recognized for its Customer 360 platform, which unifies various business functions under a single source of customer information. The company focuses heavily on integrating artificial intelligence (AI) into its software, offering advanced features like AI-driven analytics and predictive insights. Recently, Salesforce intensified its focus on innovating its core platform, primarily through the launch of the Agentforce AI platform. This new AI-centric platform aims to reimagine enterprise software, making it more efficient and productive. Revenue Growth and Margin Expansion: Total revenue of $9.3 billion was distributed in the Americas region ($6.2 billion, up 8%), Europe ($2.2 billion, up 11%), and Asia Pacific ($940 million, up 16%), highlighting diversified geographical growth, especially in the Asia Pacific region. The consistent revenue contributions across regions highlight the effectiveness of Salesforce's expansion strategies. GAAP operating margin improved to 19.1% from 17.2% in fiscal 2024's Q2. Non-GAAP operating margin also improved, now sitting at 33.7% compared to 31.6% the previous year. Increased operational efficiency and cost management were major contributors to this expansion. AI and Customer 360 Platform: Salesforce continues to advance its AI capabilities, exemplified by the launch of the Agentforce AI platform. This new feature aims at simplifying and automating customer interactions by integrating AI into various enterprise software components. CEO Marc Benioff stated, "With our new Agentforce AI platform, we are reimagining enterprise software for a new world where humans with autonomous Agents drive customer success together." Key Metrics and Guidance: Salesforce's current remaining performance obligation (cRPO) grew 10% year over year, standing at $26.5 billion. Operating cash flow increased to $0.89 billion from $0.81 billion in fiscal 2024. The full-year fiscal 2025 revenue guidance remains between $37.7 billion and $38.0 billion, representing 8% to 9% growth. Management adjusted the GAAP operating margin guidance to 19.7%, down from 19.9%, and raised the non-GAAP operating margin to 32.8%, up from 32.5%. GAAP diluted EPS guidance was slightly adjusted to $6.05-$6.13 from $6.04-$6.12, and non-GAAP diluted EPS was raised to $10.03-$10.11, from $9.86-$9.94. The adjustments indicate Salesforce is focusing on more effective cost management and operational efficiency. Dividends and Share Repurchase Programs: Salesforce repurchased shares worth $2.13 billion and paid out dividends totaling $0.40 per share, reflecting its commitment to returning capital to shareholders. Outgoing CFO Amy Weaver remarked, "Our capital return program remains a priority, and we now expect to more than fully offset our dilution from FY25 stock-based compensation." Salesforce's revenue guidance for fiscal 2025's Q3 stands between $9.31 billion to $9.36 billion, indicating a 7% year-over-year growth at the midpoint. This suggests a slight deceleration compared to the 8% growth achieved in Q2 but maintains steady growth momentum. The company continues to emphasize AI and Customer 360 integration as key growth drivers. Management remains optimistic about Salesforce's strategic positioning and future growth. Moving forward, investors should closely monitor Salesforce's AI advancements and its ability to sustain revenue growth amidst competitive pressures.

Salesforce Q2 Earnings: Revenue Beat, EPS Beat, 'Reimagining' Enterprise Software With AI, CFO Transition And More - Salesforce (NYSE:CRM)

Salesforce reports adjusted earnings of $2.56 per share, beating analyst estimates of $2.36 per share. Salesforce Inc CRM reported second-quarter financial results after the market close on Wednesday. Here's a rundown of the report. Q2 Earnings: Salesforce reported second-quarter revenue of $9.33 billion, beating the consensus estimate of $9.23 billion. The enterprise cloud solutions company reported adjusted earnings of $2.56 per share, beating analyst estimates of $2.36 per share, according to Benzinga Pro. Total revenue was up 8% on a year-over-year basis. Operating margin came in at 19.1%, and non-GAAP operating margin was 33.7%. Cash flow from operations was up 10% year-over-year and free cash flow was up 20%. The company ended the quarter with remaining performance obligations of $26.5 billion, up 10% year-over-year. "In Q2, we delivered strong performance across revenue, cash flow, margin and cRPO, and raised our fiscal year non-GAAP operating margin and cash flow growth guidance," said Marc Benioff, chair and CEO of Salesforce. "With our new Agentforce AI platform, we're reimagining enterprise software for a new world where humans with autonomous Agents drive customer success together. Salesforce is the only company with the leading apps, trusted data and agent-first platform to deliver this vision at scale and help companies realize the incredible benefits of AI." See Also: Lululemon Q2 Earnings Preview: Analyst Says Apparel Stock Oversold Salesforce also announced Amy Weaver has decided to step down from her role as president and CFO of Salesforce. She will remain CFO until a successor is appointed. Outlook: Salesforce issued guidance for third-quarter revenue of $9.31 billion to $9.36 billion. The company anticipates third-quarter adjusted earnings of $2.42 to $2.44 per share. Salesforce continues to expect full-year 2025 revenue of $37.7 billion to $38 billion. The company raised its full-year adjusted earnings outlook to a new range between $10.03 and $10.11 per share. Management will hold a conference call to discuss these results at 5 p.m. E.T. CRM Price Action: Salesforce shares were up 3.51% after hours, trading at $268 at the time of publication Wednesday, according to Benzinga Pro. Photo: courtesy of Salesforce. Market News and Data brought to you by Benzinga APIs

Jim Cramer Says 'Real Deal Acceleration' As Salesforce's Benioff Flaunts 'Unstoppable' Growth -- But Here's Why This Analyst Prefers To Stay On Sidelines - Salesforce (NYSE:CRM)

Piper Sandler analyst, though impressed with better-than-feared results, want to see more evidence of growth stabilization. Salesforce, Inc. CRM shares jumped over 4% in after-hours trading on Wednesday after the customer relationship management platform provider reported a beat-and-raise quarter. CNBC Mad Money host Jim Cramer and Piper Sandler analyst Brent Bracelin weighed in on the quarterly performance and outlook. Unstoppable Growth: As Chairman and CEO Marc Benioff flaunted the company's accomplishment over the years, Cramer seemed to agree with him. Calling the company's growth "unstoppable," Benioff noted that revenue skyrocketed from $4.1 billion in fiscal year 2014 to $38 billion in 2025. "The future is bright," he said, as he noted that margins are due to nearly double from 16.8% in 2020 to 32.8% in 2025. Replying to Benioff's post on X, the stock picker said, "Real deal acceleration." Benioff said in the post the real game changer for Salesforce would be "AgentForce," the company's low-code/no-code platform for building autonomous AI agents which can not only offer advice but can also execute tasks. "Powered by cutting-edge AI, Agentforce is transforming how we drive efficiency, growth, and unparalleled customer success," he said, adding "This is just the beginning of a new era in sales and engagement." See Also: How To Buy Salesforce (CRM) Stock Piper Sandler Raises Price Target But Remains Cautious: Following the quarterly results, Piper Sandler analyst Bracelin maintained a Neutral rating but raised the price target for the stock from $250 to $268, suggesting roughly 3.5% upside from current levels. The analyst attributed the upward price target revision to Salesforce's better-than-feared results, which showed 9% forex-neutral growth, and an 11% cRPO (current remaining performance obligation) rebound. cRPO refers to the total future performance obligations arising from contractual relationships Margin expanded from 32.1% in the first quarter to 33.7% in the second quarter, the analyst said. On the flip side, the analyst said the second-half growth of 8% would mean there would be a further moderation in growth, impacted by two years of measured spending with several industry constraints flagged in the largest Americas region. "Macro uncertainty, the CFO departure planned for fiscal year-end, and the pending multi-year model transition from applications to agents keep us on the sidelines," Piper Sandler said. "Until we see further signs of demand stabilization after three years of moderating top-line growth, we maintain our Neutral rating," it added. In after-hours trading, Salesforce shares rose 4.09% to $269.50 after ending the regular session down 2.01% at $258.90, according to Benzinga Pro data. Read Next: Stock Of The Day: Salesforce At This Level Will Inspire Trade Moves Photo via Shutterstock Market News and Data brought to you by Benzinga APIs

Salesforce Non-GAAP EPS of $2.56 beats by $0.20, revenue of $9.33B beats by $100M (NYSE:CRM)

Salesforce press release (NYSE:CRM): Q2 Non-GAAP EPS of $2.56 beats by $0.20. Revenue of $9.33B (+8.5% Y/Y) beats by $100M; up 9% in Constant Currency, inclusive of Subscription & Support Revenue of $8.76 Billion, up 9% Y/Y, up 10% Y/Y in CC. Second Quarter GAAP Operating Margin of 19.1% and non-GAAP Operating Margin of 33.7% Current Remaining Performance Obligation of $26.5 Billion, up 10% Y/Y, up 11% Y/Y in CC Second Quarter Operating Cash Flow of $0.89 Billion, up 10% Y/Y, and Free Cash Flow of $0.76 Billion, up 20% Y/Y Returned $4.3 Billion in the Form of Share Repurchases and $0.4 Billion in Dividend Payments to Stockholders. Guidance: Initiates Third Quarter FY25 Revenue Guidance of $9.31 Billion to $9.36 Billion vs. consensus of $9.41B, up 7% Y/Y Maintains Full Year FY25 Revenue Guidance of $37.7 Billion to $38.0 Billion vs. consensus of $37.85B, up 8% - 9% Y/Y and Maintains Full Year FY25 Subscription & Support Revenue Growth Guidance of Slightly Below 10% Y/Y & Approximately 10% in CC Updates Full Year FY25 GAAP Operating Margin Guidance to 19.7% and Updates non-GAAP Operating Margin Guidance to 32.8% Raises Full Year FY25 Operating Cash Flow Growth Guidance to 23% to 25% Y/Y. Shares +2.6%. More on Salesforce Salesforce: Q2 Might Outperform On Lowered Expectations After Q1 Salesforce Earnings Preview: The Newfound Maturity Is Richly Rewarding Shareholders Salesforce Stock Is A 'Buy' Before Q2 FY2025 Earnings Release Klarna shuts down Salesforce as service provider, Workday to meet same fate amid AI initiatives Salesforce Q2 earnings on deck: What to expect

Salesforce beats quarterly estimates on cloud demand, says CFO to step down

Salesforce reported revenue of $9.33 billion for the quarter, while analysts on average had expected $9.23 billion, according to LSEG data. "Results were slightly ahead of Street expectations, which was welcomed by investors as concerns of a tough macro environment persist," said Parker Snook, senior research analyst at M Science. The firm also raised its annual profit forecast to a range of $10.03 to $10.11 per share, from $9.86 to $9.94. However, the firm forecast third-quarter revenue below estimates, signaling that a full recovery in cloud spending is still yet to come. The software-as-a-service pioneer, which battles competition from rising industry players like ServiceNow, expects third-quarter revenue between $9.31 billion and $9.36 billion, compared with the average analyst estimate of $9.41 billion. Salesforce's revenue grew around 8% the second quarter, its slowest pace in over a decade. "We do not expect AI to become a meaningful contributor to growth any time soon. On the contrary, AI seems to be distracting Salesforce's customers and preventing some of them from making long-term commitments," D.A. Davidson analyst Gil Luria said. AI remains a top priority for the company as it pours hundreds of millions into deploying its own GPT and Copilot, integrating them into its business suite of products and platforms like Slack. The company reported second-quarter adjusted operating margin of 33.7%, while analysts polled by Visible Alpha expected 32%. Salesforce reported an adjusted profit per share of $2.56 for the second quarter, beating estimates of $2.36. (Reporting by Zaheer Kachwala in Bengaluru; Editing by Maju Samuel)

What You Need To Know Ahead of Salesforce's Earnings Report

UPDATE -- Aug. 28, 2024: This article has been updated to reflect more recent analyst estimates and share price information. Salesforce (CRM) will release its fiscal 2025 second-quarter results after the bell Wednesday, with investors likely watching for improving operating margins and updates on artificial intelligence (AI) initiatives. Analysts project revenue to grow to $9.24 billion from $8.6 billion a year ago, according to estimates compiled by Visible Alpha. Net income is expected to be $1.34 billion, or $1.36 per share, a rise from the year-ago period but down from the previous quarter.