Salesforce, Inc. (CRM) on Q1 2021 Results - Earnings Call Transcript

Operator: Welcome to the Salesforce Fiscal 2021 First Quarter Results Conference Call. [Operator Instructions] I would now like to hand the conference to your speaker today, Mr. Evan Goldstein, Senior Vice President of Investor Relations. Sir, you may begin. Evan Goldstein: Thanks, Josh. Good afternoon, everyone, and thanks for joining us for our fiscal 2021 first quarter results conference call. I'm Evan Goldstein, Senior Vice President of Investor Relations. Our results press release, SEC filings and a replay of today's call can be found on our IR website at www.salesforce.com/investor. With me on the call today is Marc Benioff, Chairman and CEO; Mark Hawkins, President and CFO; Bret Taylor, President and COO; Gavin Patterson, President and CEO of International; Brian Millham, President, Customer Success Group and Amy Weaver, President and Chief Legal Officer. As a reminder, our commentary today will primarily be in non-GAAP terms. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings press release. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties and assumptions. In particular our expectations are on the impact of the COVID-19 pandemic on our business, results of operations and financial condition, and that of our customers and partners are uncertain and subject to change. Should any of these materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risks, uncertainties and assumptions and other factors that could affect our financial results are included in our SEC filings, including our most recent report on Form 10-K. With that, let me hand the call over to Marc. Marc Benioff: Okay. Thank you so much Evan and thank you everybody for being on the call today. I hope you and your families, and colleagues are all healthy and safe. We're in a moment in time, anything any of us well that we've ever experienced. And for instance, usually I'm speaking to you from the top of Salesforce tower, but today I'm speaking to you from my home, as I suspect many of you are in your home as well. It's another reminder of how the pandemic has dramatically affected all of us, our customers and our humanity in ways that we could have never imagined. And my heart is with everyone who has been affected by this virus, especially those who have lost loved ones. This pandemic is revealing the culture and the core values of every company. And those of you who have followed us closely know that Salesforce always been deeply committed to serving all of our stakeholders. While we have really lived this for two decades and especially over the last 90 days. The foundation of our company is our four core values; trust, customer success, innovation and equality. And first and foremost, among these is the trust that we have with all of our stakeholders. The story of our first quarter is very much the story of trust. Salesforce in Ohana, rapidly taking action to embrace and invest in all of our stakeholders. Indeed, our financial results for the first quarter reflect the unprecedented long-term investment that we've made in our employees and our customers, and also our communities. And as our fiscal year began, we were coming off an amazing fourth quarter. It capped off another record year for Salesforce, in February, the first month of our first quarter of fiscal year 2021 builds continued an amazing growth trajectory. By mid-March of course and all of you know, the virus emerged into this global, biological and economic crisis. The company could address three priorities in support of our stakeholders. Keeping our employees healthy and safe, guiding our customers to navigate this incredibly challenging situation and supporting our communities around the world. We view through this pandemic in three phases. The first 90 day phase has been about rapid response and investing in all of our stakeholders. We're now entering the second phase, reopening safely. And the third phase, which we believe will enter next year will be about a new normal. And I want to spend a few minutes on the actions we took during the first quarter and phase one. First we've invested in our employees, their health, their wellbeing, while this remains our highest priority. We closed 160 offices around the world in a moment's notice, guided all of our 52,000 employees to work from their homes. We settled in remote work situations and with our amazing sales force – extremely smooth – Salesforce, very effectively anywhere, even from our homes. And we found that the overall situation was taking its toll on many of our employees mental health as they sequestered into their own homes. As it has been for many people all over the world and so we invested in mental health and mindfulness programs to help them. Our core program B-Well Together, which was initially just designed for our employees, while we've had to open that up publicly to all of our customers of the whole world, because of public demand. We also invested in our employees financial stability. We committed to no significant layoffs for the first 90 days of the crisis and in late March, we also gave certainty to our sales team for the onetime guaranteed commission for the first quarter, which we knew would close at the height of the crisis, giving them tremendous confidence in our ability to take care of them. This was a critical investment in the long-term success of our amazing distribution organization. And we invested in our communities, in early March, we're asked by Sam Hawgood, the Chancellor of UCSF to help him acquire PPE. UCSF was already running low on PPE, Chancellor Hawgood was looking for ways to protect his doctors and nurses and other frontline workers, but the fact then I have to tell you, I didn't even know what PPE was. It turned into a much larger and more critical effort of almost overnight. And as we received many requests from hospitals, nursing homes, essential businesses, the CEOs of some of our largest customers calling us in dire need while in partnership with UCSF, we helped to acquire, distribute more than 50 million pieces of PPE to over 300 hospitals and first responders globally. And just one example, Salesforce sent a 767 loaded with PPE to New York city at the very height of the crisis, masks and gloves, and aprons that we acquired were they were immediately delivered to the state distribution hub at Javits Center. And I'm deeply grateful for our relationship with Daniel Zhang, the CEO of Alibaba, who helped get this started and make sure that we got the PPE that we so badly needed here. At the same time, we've donated funding employee volunteer time services to those most in need, focusing on access to care, loss livelihoods, food insecurity, and the digital divide. This pandemic has exposed deep structural inequalities across our society that we can't ignore. We can see that on TV right now. But at Salesforce, our core values include our commitment to the equality of every human being and this will be part of our work going forward as it has been for all of us. Well, we also invested in our customers actually quite dramatically. Even with our employees working from home, our culture of innovation continues to thrive cloying new products to help customers at this critical moment in time. I was especially inspired by the productivity of our incredible engineering organization and talking with CEOs all over the world, it became apparent very quickly that many were looking to Salesforce to help them guide through these unchartered waters. Companies were working from home, leaders have little visibility in their businesses, no way to easily connect with their remote employees, customers or partners and they turned to Salesforce. Some of our customers most severely affected by the unprecedented impact of COVID-19, we've even granted them a temporary financial flexibility, but we also created free rapid response Salesforce Care products that help companies work to sell the service to market from their homes. And we've already had more than 38,000 signups for Salesforce Care led by versions of Salesforce Essentials and Salesforce Quip, that's been amazing. Our Salesforce Care industry solutions for healthcare and manufacturing, what they’ve provided proved to be crucial for many companies. They're scaling up services. They handle increased demand for patient management, pivoting to much needed PPE, ventilators in their factories. Tableau, they were amazing, they built this incredible free analytics platform, the Tableau Data Hub, tracking the virus and being used by dozens of URLs. You can see it at [indiscernible] and you know with Tableau Data Hub, New York state posted a set of dashboards that provide us testing and confirm case data and that data is also used by Governor Cuomo during his daily briefings. We're able to do all this because our Salesforce platform provides the agility, the flexibility, the speed, great solutions not in months or years, but in weeks, even days and when everyone's sheltered-in-place. We saw tremendous growth also in our Commerce Cloud's weekly order volume and our Einstein Bot sessions, both that were up more than a 100% in February 1. Einstein predictions increased five times over this time since last year. We also had an amazing job of captioning, pivoting from physical events to virtual events. We developed an online leadership program called Leading Through Change. It's had over 75 million views so far, incredible. Program highlights the work our customers have been doing during this crisis. It gives them inspiration and guidance and also shows some Salesforce solutions that are available to help them get their jobs done. It's included phenomenal speakers like the CEO of Starbucks, Kevin Johnson, and also the CEO of Accenture, Julie Sweet, many more. And as the virus continued to spread throughout March, Governor Gina Raimondo, Rhode Island, Gina's amazing. She needed a way to manage her critical contact tracing, which would enable her States help spread and isolate anyone exposed. So this became an opt-in manual process with a citizen can report that they've been tested for COVID-19 and I identify anyone else they contact and be notified of their potential exposure to the virus and isolate themselves. Governor Raimondo inspired us to build an app that managed this process in scale efficiently and reliably. We're on the phone with her many times and so we did it in just a few weeks on the Salesforce platform and in additional Rhode Island today, we're now helping more than 30 States reduce the spread of COVID-19 including Maryland and Massachusetts, Kentucky, Louisiana, California, and great cities in our country like New York city and other countries too. So this is incredibly important effort. We're developing the contact tracing apps for Rhode Island. We saw – we need to deliver several products now to mitigate the spread of the virus and we needed to do it rapidly, not only for our public sector clients, but for our commercial clients as well. Customers are asking for automation to facilitate the return to work safely, including the contact tracing, shift scheduling, workforce assessment, a command center for the crisis. And this was the genesis of our work.com platform, which has rapidly become a significant part of our public sector pipeline. And actually we've been hugely surprised. And while all of this was happening, we also delivered $4.87 billion in revenue. We delivered $1.86 billion in operating cash flow. Now that was down slightly over a year to many of the actions that I just reviewed in response to pandemic. And as I mentioned earlier, we also provided some customers temporary financial flexibility. We also incurred some incremental business expenses such as the onetime commission guarantee for our sales team that I mentioned. We expect these expenses to be largely, I would say wholly encapsulated in the first quarter. We have great confidence that our investments, we already see it in our employees, our customers, our communities in the first quarter, well they're benefiting us, they're benefiting us now in the short-term, the long-term with tremendous strength and tremendous growth. And for the fiscal year 2021 we're updating our guide to approximately $20 billion representing 17% projected growth year-over-year. And we believe this guide is very appropriate given the current biological and economic environment worldwide. Our ability to execute globally with speed to the adverse conditions of March and April, well, I'll tell you that gave us tremendous confidence. We can operate successfully in any environment at any time, it was incredible. We demonstrated that we have the ability to innovate and meet rapidly changing customer demands and needs under any circumstance. And the last few months affirm the strengths we have in our amazing customer relations – innovative scale and operate across different industries and geographies, companies of all sizes and with Customer 360, the most complete CRM product portfolio mission of any company I was excited to see in the quarter. And for the seventh year in a row, IDC has ranked Salesforce as the number one CRM. We gain more share in 2019 and we're now seeing continuous improvement in our pipeline month to-date. Well, we've been really surprised and our pipelines for the second quarter – I've been on more sales calls with more CEOs in the last two months than at any time my career. And there's universal agreement among them. Digital transformation, while this isn't a one app, it's a must have, company isn't organizations and governments around the world have a digital transformation imperative like never before. And many of them are accelerating their plans for digital first work from anywhere environment. For example, in Q1 we signed a incredible and extensive deal with AT&T with the vision of AT&T Communications, CEO Jeff McElfresh, a incredible executive, somebody who's just been completely inspiring to me, while AT&T is moving to a highly accelerated digital first world to deliver the most amazing 5G service with an incredible connected experience for their millions of customers and subscribers across every customer touch point. And this includes their media properties such as DIRECTV and HBO, and Turner Sports and more, but with Salesforce, AT&T will further extend this vision of a single view of their customer, single source of truth really, with every customer touch point federated on Customer 360 across retail sales and call centers on messaging and online and in home service and more, only Salesforce could do that. Every customer touchpoint, the AT&T truck pulls up to my office or my home that's going to be Salesforce and I walk into AT&T store and that's going to be Salesforce, and I'm getting an email from AT&T that's going to be Salesforce and I'm on the phone with the AT&T call center that's going to be Salesforce and we're going to make sure that they have that Customer 360 enhanced. And I'll tell you when we're integrating all that data with MuleSoft, it's going to connect AT&T’s different backend systems. Tableau is giving them the ability to understand customer preferences. Einstein is going to help them serve more intelligent recommendations and route service cases. I was on the phone just yesterday with Jeff McElfresh reviewing the incredible progress of the project. And it was clear to me this is going to empower AT&T to drive more value and build stronger relationships with every customer. And we're going to begin deploying this with Jeff and his team, the AT&T’s employees, very, very shortly. Our goal is by the end of July. And then to tens of thousands of users in the third quarter. We're thrilled to have also significantly expanded our 15 year partnership with Standard Bank group, the largest bank in Africa. It operates across 20 markets, it's an incredibly important banks to the African economy. Standard Bank is going to leverage the full power of our Customer 360 including the Financial Services Cloud, the Commerce Cloud, Marketing Cloud, MuleSoft and Einstein to provide that single view of the customer to build personalized customer journeys and deliver amazing client experiences in retail banking across all channels. And when the livelihoods of Zions Bank customers were threatened by COVID-19, well the Utah based bank turned to Salesforce and Customer 360 to virtually support a high volume of loan requests. They're using our customer communities and our service cloud to facilitate conversations with customers, automate applications processing, provide tracking and visibility to customers waiting for their loans. Zions Bank stood up this loan application portal in seven days, even though the 38th largest bank in the U.S., it became the ninth largest distributor of SBA Payroll Protection Program funds in round one using Salesforce’s Customer 360 platform. One of our ISV partners nCino, well they built an end-to-end solution for federal SBA CARES Act loans for small businesses all on Salesforce and it processed more than $35 billion in loan applications for its banking customers, including KeyBank. IBERIABANK, the world's largest credit union, the Navy Federal Credit Union, all running on Salesforce Customer 360. And one of the unique aspects of COVID-19 crisis is the deepening our ties with the local and federal governments around the world. But public sector action has never been greater. I mean, I can't believe how many phone calls I've been on with Governors. In the public sector, a number of our government customers or agencies, if you will, they chose Salesforce in the quarter to begin helping them address COVID-19 related issues, including some of the very largest federal agencies. At the state level, we formed office of emergency services. They implemented Salesforce to create the public health ordering system, an application consumer helps the state leverage data that urgently needed public health resources across California improved customer service. It did it in days and the U.S. Census Bureau, they expanded their long time relationship with Tableau as the agency's data analysis with a visualization platform of choice. Tableau partners with the Census Bureau on mission critical data applications in support of the 2020 census and beyond, so important. Internationally, we also had an incredible deal with Commonwealth of Australia, where we partnered with the National Disability Insurance Authority to deliver and improved experience for more than 500,000 participants that are predicated to access disability support by 2025. Those are some of the highlights from Q1. Now looking ahead, if much of the world is beginning to move now into Phase 2, we like to call reopening safely. Our Work.com platform is going to become a – well, it's going to fill a huge unmet need, step-by-step we're seeing the economy is starting to come back to life. Salesforce is also beginning to reopen its offices first throughout Asia. It has to be done safely, got to be done responsibly and it's going to be a complex process and the new normal businesses are going to have a new lifestyle, a new lifestyle of man, life style of taking people's temperatures and enforcing social distances standards, a new lifestyle of testing and contact tracing and a new lifestyle of wellness assessments to mitigate interaction of the virus. You can see some of the photos on my Twitter feed of our employees’ preventative just 90 days ago. We're going to need a command center to monitor return to work readiness. They're going to need shifts scheduling because businesses are not going to bring everyone back at once. They're not all coming back at once that you're going to need social distancing and you're going to need tools for emergency response management and you're going to need expert perspectives from renown experts because this is changing on a regular basis and from our incredible ecosystem and tools and workforce reskilling. We've bundled all that in to this Work.com suite. You can see at Work.com, you can see what we built, how we're starting to roll it out, who our partners are. It's a platform for enabling our customers to reopen safely. And it's because it's built on our customer 360 platform, we're able to spin up this entirely new generation of apps in a matter of weeks, amazing, and I just have to give credit where credit is due, the Governor, Gina Raimondo, Rhode Island. It was her call to us early on in the crisis that inspired us to build Work.com. She was the visionary that said, we need information technology to mitigate what's happening with the virus until we have a vaccine. Well, I'll tell you at times, even though we have nearly 52,000 people at Salesforce, creating Work.com felt like many of our early startup days with the speed and scrappiness, the laser focused execution of our management team. It was, this was the best I've ever seen Salesforce and we're already returning to work. We're starting to see the return on this investment now. It's amazing in a very short time, Work.com has generated an enormous interest from businesses and governments at every level from our partnerships and with Work.com, when we deep in those partnerships with the world's largest systems integrators, including Accenture, Deloitte, PwC and IBM and many of our partners are now building solutions on Work.com as well. It's incredible to see what they've done with risk management and compliance and business continuity and just yesterday workday announced that it's going to integrate its employee data directly into Work.com to make it easier for employers to centralize critical data and get their businesses up and running again. We've enabled and trained all of our sales people worldwide to be able to talk to our customers and how to reopen safely with Work.com. I've been thrilled and I'm so thrilled also, especially in my Workday partnership with [indiscernible]. That's just an amazing company and to make Work.com even more valuable, so many of our joint customers. So thank you Neil [ph] for that. In the months ahead, I expect Work.com ecosystem to rapidly become even more robust with even more relevant solutions. I've had so many of our customers contact us on how they can integrate their own products into Work.com that's so cool and as we move deeper into Phase 2, Work.com is going to become extremely important to all of our customers. We have learned from this crisis just as we have every time, we have been faced with major challenges as well. We saw once again how our values create value. We've seen how our agility and our beginner's mind has enabled us to quickly pivot and take action. And we made investments during Q1 to confront this once in a generation calamity, focusing on our employees, delivering relevant innovation for customers and supporting our communities with PPE, grants and technology. We could do all this because the proven strength and sustainability of our extraordinary business model and our extraordinary technology and our extraordinary Ohana. We know that when we invest in all of our stakeholders, we're building the trust, the relationships, the innovation, and our business for the long term. Pandemic has shown that digital is the lifeblood for every organization whether you're a public sector, state, country, or whether you're a commercial organization or a nonprofit or an NGO. The new normal Phase 3 is going to require organizations of all sizes, shapes, geographies. Well, everyone's going to have to adopt new ways of conducting themselves and especially their customer relationships, especially their sales and services, especially their marketing and commerce and especially new ways of collaborating and re-skilling workers, every company is going to have to digitally transform. Fortune's recent survey of Fortune 500 companies found three quarters CEOs, well, they believe this crisis is going to force their companies to accelerate their technological transformation. I mentioned Jeff McElfresh of AT&T. Well, he is the first one who said that to me. He was the first one that got on the phone with me and said, we're going to accelerate our digital transformation at AT&T. And I believe that Salesforce has never been more relevant or more mission critical. The more organizations, no one is better positioned than Salesforce to accelerate out of this crisis and bring customers into the new normal. Now before I turn it over to Mark, I want to make sure you've heard, Gavin Patterson, the former CEO of BT Group and our current President, CEO of International will be our new President and Chief Revenue Officer beginning August 1. And you've already heard of one of Gavin's amazing deals and I hope he'll talk about that later on the call, but I'm still thrilled to have Gavin as a member of the team. He's just an amazing executive. We've been friends for many years and he's already had a huge impact on our company and on our management team. And I'm could not be happier for Gavin, but I couldn't be happier for Salesforce and all of our Ohana. They were able to have his experience and his capability as part of our organization. And with that, I'll turn it over to you, Mark. Mark Hawkins: Okay, well, thank you, Marc. And before I begin you guys, I want to express my thoughts and my best wishes for everyone's safety and wellbeing during this historic time. I'd like to focus my remarks on providing additional disclosures and commentary and the company's response to the COVID pandemic and our updated fiscal 2021 guidance. As Marc said, our actions in Q1 were focused on investing in our employees, our customers, our community and response to COVID 19 and preparing for post pandemic future. We continue to believe that values drive value and these Q1 investments and all of our stakeholders will result in long-term equity. We want to provide visibility into how our actions in response to COVID-19 affected our financials in Q1 as well as our updated guidance. I'll begin with a top line commentary. Revenue for Q1 was $4.865 billion, up 30% over last year. We saw good revenue performance by cloud. Our Sales Cloud grew 16% and approximately four points from significant M&A. Service Cloud grew 23% with two points from significant M&A, platform and other grew 62% with 35 points from significant M&A and marketing and commerce grew 27% with four points from significant M&A. Additionally, we had strong year-over year-revenue performance by region in constant currency. Americas grew 29% with 11 points from significant M&A. EMEA grew 41% with 12 points from significant M&A and Asia Pac grew 28%. Additionally, we were pleased to have maintained a revenue attrition rate of less than 9% at the end of the quarter. In fact, this is actually down year-over-year and in line sequentially. This speaks to the diversity of size, industry and geography within our customer base as well as how mission critical our products are to our customers. As always, we continue to monitor this metric closely to determine how the COVID pandemic may impact our customer base going forward. Our performance – our remaining performance obligation representing all future revenues under contract ended the first quarter at approximately $29.3 billion, up 18% over last year. And as a reminder, this metric includes both new business and renewal contracts. In Q1 these contracts were approximately three months shorter in duration on average compared to Q1 of last year. And we believe this is a result of the COVID pandemic and we expect this to normalize in the future. Please note that the contract we signed with AT&T entirely resides in non-current portion of RPO as our updated revenue guidance assuming there's no contribution from AT&T in FY 2021. Our current remaining performance obligation or CRPO which has all the future revenue that is under contract and is expected to be recognized as revenue in the next 12 months was approximately $14.5 billion, up 23% year-over-year. Turning to EPS and operating margin. Q1 GAAP EPS was $0.11 and non-GAAP EPS was $0.70 and there are a few items I'd like to discuss as they pertain to the Q1 objective of investing in our employees, our customers, and our community in response to COVID-19 and preparing for the future, which we believe will lead to an even stronger business and company. First, the onetime partial commission guarantee, I discussed earlier was approximately $140 million. As a partial commission guarantee makes it not eligible for capitalization, this expense will reside in Q1 and not in the future periods, given how sudden and severe the pandemic arrival was in March. We chose to take powerful action to care for our employees through this crisis. Second, due to the cancellation of our physical events, this fiscal year in favor of virtual experiences, all event contracts that included cancellation fees for fiscal 2021 commitments were expensed in the quarter. This amounts to approximately $65 million. We are working with these vendors to renegotiate these contracts as we pivot to digital virtual experiences which means we could see some partial reversal later in the year. Thirdly, we incurred approximately $25 million in onetime lease impairments due to vacating and subleasing offices that will likely return below market rent due to the COVID pandemic. And finally, we prioritize caring for our community by donated approximately $20 million which came in the form of PP&E and cash grants. These unique and mostly one time variable items were partially offset by approximately $75 million in savings, largely PP&E due to shelter in place orders. But none of these items created an approximately 350 basis points of headwind to operating margin compared to our expectations in the quarter. Regarding our strategic investments, we recorded approximately $192 million in realized and unrealized gains. This was driven by significant realized gains on the sale of public securities, partially offset by unrealized losses within the investment portfolio. Turn into cash flow. Operating cash flow was $1.86 billion, which was largely impacted by delayed payments from customers while sheltering in place and some temporary financial flexibility that we granted to certain customers that were most affected by the COVID pandemic. We expect to collect the majority of the balance this year and do not expect us to have an impact on our full year cash flow. In addition, we previously described this partial commission guarantee also created a headwind to our operating cash flow. Should we not have incurred these items above, our Q1 growth rate would be consistent with historical rate. CapEx for the quarter was $323 million leading to free cash flow defined as operating cash flow, less CapEx of $1.54 billion down 15% year-over-year. Turn into guidance for Q2 and fiscal 2021. Revenue is now expected to be $4.89 billion to $4.90 billion in Q2 and approximately $20 billion for the fiscal year. The latter, which continues to include $50 million contribution from velocity, which is expected to close on June 1. There are two important assumptions reflected within the guidance that stem from our assumptions that the IT spending growth normalizes next year, which we believe to be appropriately conservative and consistent with our learnings as we successfully navigated through the great financial crisis. First, our guidance assumes our revenue attrition rises from less than 9% now to less than 10% temporarily for the rest of the fiscal year. Second, the guidance reflects the adjustment to incremental new business expectations that we made due to the COVID pandemic. Another important consideration when thinking about our FY 2021 guide is the magnitude of the above when applied for a term license products, As a reminder, the term license revenue product typically records approximately 50% of the contracts TCV [ph] immediately to revenue with a remaining balance recorded ratably over the contract term. This accounting treatment I can create uneven revenue trends between fiscal periods as you saw during half two of FY 2020 has helped drive the revenue out performance in those quarters. Additionally, we are pleased to have experienced improving trends within our pipeline and closed rates between March through today, which leaves us incrementally optimistic about the future. In fact, April was better than we anticipated would be when we started that month. We continue to see additional positive trends in May. For Q2, GAAP diluted EPS is expected to be minus $0.02 to minus $0.01, while non-GAAP diluted EPS will be $0.66 to $0.67. For fiscal 2021, we're expecting GAAP diluted EPS to be minus $0.06 to minus $0.04 while non-GAAP diluted EPS will be $2.93 to $2.95. And why did the COVID depend on that and our actions in Q1 to support our customers, employees, and communities. We expect our fiscal 2021 non-GAAP operating margin to be roughly flat year-over-year on a percentage basis. As we prepare for the future, our outlook for the rest of fiscal 2021 includes incremental discipline and prudence, especially in regards to headcount, largely due to lower employee attrition rate than plan. As always, we continue to monitor our go-to-market capacity to ensure we allocate the appropriate investments to achieve our targets both this year and in the future. For the remainder of the year, we are focused on making ourselves even stronger upon exiting the pandemic. As a reminder, our EPS guidance assumes no future contribution for mark-to-market accounting as required by ASU 2016-01. For operating cash flow, we're reducing our fiscal 2021 operating cash flow guidance to 10% to 11% year-over-year growth to align with our updated revenue and margin guide. We do not expect to provide incremental temporary financial flexibility. We now expect CapEx to be approximately 3% of revenue in fiscal 2021 resulting in a free cash flow growth rate of approximately 13% to 14% for the fiscal year. We expect CRPO to be approximately 16% to 17% growth year-over-year and the second quarter, which we believe is appropriately conservative and consistent with our revenue guide. In light of uncertainty surrounding the COVID pandemic, we are reassessing our long-term revenue target for fiscal 2024 and we're planning on giving an update during the investor day. To close while the COVID pandemic was sudden and a once in a generation crisis, we are proud of the investments and relationships we have deepened with our customers, our community, and our employees. We are confident in our actions and these investments will lead to an even stronger business and company in the future. And as we move into Phase 2, we are strategically well poised with a strong balance sheet and a durable business model. We are well positioned to continue to leverage the secular tailwind to drive digital transformation. I'd like to thank our employees, our customers, our partners, our communities, and our shareholder – all our shareholders for the continued support. And I wish each of you and your families and your firms’ safety and wellness. And with that, we'll open up the call for questions. Operator: [Operator Instructions] And your first question withdraw your question, please press the pound key. And you first question comes from Mark Murphy with JPMorgan. Please go ahead. Mark Murphy: Yes, thank you Mark. The second week of November should be an interesting one. I am wondering what Einstein might be telling you about a virtual Dreamforce 2020. Some of us on the call have attended every single one in person that Moscone center. And so just with it going virtual, curious how you're going to maximize the impact of Dreamforce so it provides the inspiration that it's known for and also that – so that it drives the pipeline for Q4 and beyond. Marc Benioff: Well, that's such a good question and I'll tell you that, of course Dreamforce has been such an incredible part of our culture that we're all going to miss Dreamforce this year, but you may see that we've already started some amazing things online and we're getting some phenomenal results. In fact, we have, I mentioned we've already had more than 75 million views and I think we're having almost soon a 100 million views of our leading through change program. And I don't know if you've had the opportunity to watch or participate in leading through change, but it's been incredible. And that type of virtual program I believe is very much going to be something that is going to be a permanent part of our culture. We've really been able to inspire our customers and our employees, all of our Ohana, including our account executives and enable them with these programs. And while we're certainly going to miss being together at Dreamforce this year, and that's not something that, any of us could have imagined just 90 days ago, I think that we now see a very clear path to be able to, have virtual events, build pipeline, build community, build brand, create, deliver new products. And I have a lot of confidence in our ability to execute without a physical Dreamforce this year. And not just Dreamforce by the way, we – as Mark mentioned, we cancelled all of our physical events for this year and we had to pay an extremely large amount of cancellation fees that all got tossed into that first quarter number. And so all those world tours and all these other amazing events, we do a thousand events a year. We're just moving as many of them to the virtual programs as well. And not just the big events, there's lots of small things happening. So we've got a whole new playbook that we're executing. It's a great question. Thank you. Operator: Your next question comes from Terry Tillman with SunTrust. Please go ahead. Terry Tillman: Yes, thanks for taking my question. I guess my question relates to, it's great seeing the AT&T win. It seems like great example of the digital transformation opportunities but with customer 360 and these larger transformational deals, Marc, maybe you could give us an update. You talked about strengthening pipeline. How does some of these larger transformational deals, how do you see that playing out the rest of the year? Or is that some of that business harder to come by just because it is more complex. Thank you. Marc Benioff: Well, I'll give you the beginning of the answer and then, I've been very fortunate this quarter to have Brian Millham running our global distribution organization. He is also running it in the second quarter while we're bringing Gavin on board. And Brian's been with us for more than 20 years. Many of, Brian, he's really been the heart and soul of our distribution cultures has done a phenomenal job this quarter. And I think that this what we see reminds us a lot of – over a lot of different times in the last 20 years in Salesforce where you have to have a full portfolio of products and deals, small, medium and large that, there's an ebb and flow. You're never going to make your number on all large deals or all small deals. You have to have a portfolio of transactions and you have to have that across geographies, products, segments, verticals, and that's one thing I've been super proud of the distribution organization, their ability to deliver that and then to see that start to manifest in these really strong pipeline. So Brian, do you want to comment on that? Brian Millham: Yes Marc, I think we made the comment earlier that strengthening of our pipeline over the last couple of weeks here has been very encouraging for us. And that strength that pipeline comes in all forms, as you said, it comes from different segments of our market, different regions of our markets, our products. And so we're very encouraged by the future, both the large deals and the small deals that we're getting done across our incredible distribution organization. So very, very encouraged as we go forward. Operator: Your next question comes from Sarah Hindlian with Macquarie. Please go ahead. Your line is open. Sarah Hindlian: Yes. Hi, thank you so much for taking my question and I hope everybody is well. I guess my first question is for you, Marc. You guys are talking about this nice pickup in the pipeline and I'd love a little bit more color about what you're seeing that is that across certain vertical markets, products, enterprise, commercial, and then I have a followup for Mark Hawkins. Marc Benioff: Well, thanks. So I'm going to have Bret Taylor comment on that, because he and I were just talking about that today and we've been so inspired by, kind of connecting the first question, a lot of our programs that we put in place, and I'll tell you the four dimensions that we've been really focusing on. Of course, we have a very large scale distribution organization. I would say it's more than half of our company. You think about that in terms of all the customer facing organization. Number one, the most important thing is to get everyone, especially when you move to an at-home environment is participating. Participation has been mission critical and that's really where we focus. What percentage of those sales and service professionals, managers, executives are out there and really working with customers. And this is an unusual environment that provides opportunity for lots of new training, new – kind of new ideas, new programs. And the second thing is to enable them with that, train them and also introduce them to these new technologies, these products. The third thing that was absolutely critical after participation and enabling, making sure that they have a relevant position. I'm sure for many of you as this crisis kind of unfolded, you didn't have something relevant to say, we didn't have a lot of time for you. And the reality is Salesforce became incredibly relevant to our customers, first in this core digital transformation and then next was really, how we could provide tremendous value in reopening safely. That became the third leg of our stool, the fourth leg, where it became, really critical all the tactical plays and critical aspects of building that pipeline up. So Bret, you've been the architect of all of these things. And can you talk to us about how you put that into place? Bret Taylor: Yes, Marc, thank you. I think that one of the things that you said in your opening script that I'm really seeing from our customers is that digital imperative and across the entire customer 360, we're really seeing that play out in some of both the pipeline numbers and the adoption numbers, some of which you mentioned on the call for customer service as an example. Our Einstein Bots functionality, which provides a digital self service, which is more relevant than ever before, is up 100% just in February, really reflects that overnight digital transformation of service. Here in marketing, Einstein is doing over 12 billion predictions per day really represents this mass scale digital personalization because digital is the one channel really remaining for a lot of our customers to engage with their employees. On our Commerce Cloud, GM view is up over 100% year-over-year as commerce digitized overnight. Even on industries, as Marc mentioned, the small business administration loans process really came out a lot of banks overnight. We helped one of our largest banking customers go live into 72 hours. This is all digital, it's fast. And we're really seeing that relevance point that you mentioned Marc on being extremely important. I mean, I think that every single CEO, every single CIO I talked to has the same method, which is whatever digital transformation they had left has just accelerated thanks to COVID-19. I think the digital aspects of our customer 360 platform have become more relevant than ever before. And you're seeing that in the pipeline. Operator: Your next question comes from Derrick Wood with Cowen. Please go ahead. Derrick Wood: Thanks. Question for Mark Hawkins. Implied CRPO bookings growth for Q2 looks to be in the mid-single digit range. If I have a math, right, falling 20% in Q1 and obviously a lot of companies are expecting a tougher Q2, but can you just walk us through the assumptions here, whether there's any pressure points coming from contractions or turn or pushed out deals or any dynamic you'd call there. And then I know you don't guide CRPO beyond the quarter, but given the constructive commentary on the pipeline. Any color can you give on how we should think about potential recovery in CRPO bookings in the second half? Mark Hawkins: Sure. First of all, thank you Derrick for the question. Happy to do that. We – for CRPO when we look at that for the Q2, you should think about it is approximately 16% to 17% growth rate CRPO. So I think that aligns well, as we think about the revenue going forward in the current year and this temporary year of pandemic if you will. So we think it's appropriate line number one. I think in terms of the recovery, the way we have, and you've talked about attrition and things of that nature, I just want to be clear that we're actually very pleased in the sense that our attrition actually went down year-over-year in Q1 and so from that standpoint, I think it's good. I think what we've tried to do is to be appropriately conservative, having – going through this pandemic to assume that it would go up some and we call that out, it still would be we would expect that to be a temporary nature, but we said for the fiscal year, it would be less than 10% up some and that's partly based on the learning from the great financial crisis, heretofore we are very pleased to see what happened in Q1, but that's a little bit of color we had to make a call and kind of really make sure that we're dialing this in light of the uncertainty that's out there. So I think that would be something to think about in terms of the recovery itself from IT spending standpoint, we think that we’re expecting a recovery in FY 2022, which begins for us in February, could it be sooner, we see companies that are doing that, that’s just what we're trying to do and we think it's appropriately conservative. And so that informs us in terms of how we think about the demand environment. But one thing we learned for sure, in the great financial crisis is take a good look at what's going on to see the temporary situation. And then we remember how we navigated through it very successfully and on back to our future. And we really see that in this particular case, this is a point in time, a much bigger opportunity that we all know about including $170 billion[ph] plus TAM, that's one of the fastest growing parts of their market, but everything's being impacted temporarily with the pandemic. So that's what I would say and happy to have it if Marc wants to add anything to that. Hope that helps. Operator: Your next question... Marc Benioff: Well, I'd really like to open that up to Gavin Patterson, our new Chief Revenue Officer, he's been driving this incredibly strongly from his office in London, and he's going to be moving to San Francisco shortly. You heard about this incredible whim that he personally led at this amazing organization called the Standard Bank group, but Gavin, can you just fill in, how you see this market unfolding right now? Gavin Patterson: Well, thank you, Marc. And just to say, I'm very excited to be taking off on the role in the next few months. I've known cell sources, you know many years and I've known Marc personally for many years as well, as a customer at BT where I was the CEO and I started my career at Procter & Gamble in brand management. So I know the company reasonably well as a customer and over the last year or so, I've been more and more involved with the company initially building an advisory board in Europe, and then lastly picking up executive responsibilities for international. And that's where I helped steering the Standard Bank deal at the end of the quarter which was a big win for us. And I think pretty much a platform deal for us in Africa as we open up that market. So there are many things I hope I can bring to this Joe, customer viewpoints and international viewpoints to CEO viewpoint. But the one thing is very clear to me is the opportunities are there, very clearly and seeing how the organization has been able to adapt in the last couple of months[ph] of the virus and become even more relevant to customers. It gives me great confidence that the opportunities are there. And as Marc said, the majority of customers that were talking to are saying, how can I accelerate digital transformation? And there's no better partner to do that with. So I think certainly the growth potential not just domestically in the U.S., but internationally around the world, I think exists for us. Operator: Your next question comes from Kirk Materne with Evercore ISI, please go ahead. Kirk Materne: Yes. Thanks very much. And Marc, thanks for all the work you and the team have done to help out in this crisis has done some great things. My question is for Marc B, if we think back to the great financial recession and you think about what eventually turned the tide from customers wanting to talk to you about digital transformation to customers actually spending on digital transformation. I mean, I think between you, Gavin and Brett, you all mentioned that there's a greater understanding of the imperative to spend on digital transformation today yet. You obviously have some prudent guidance out there for the second half of the year. So, when you talk to CEOs, what do you want to start hearing from them that gives you confidence that their interest is going to start translating into bookings, is it simply just business confidence, better understanding of sort of what's going to happen in the fall around COVID, just kind of curious, so we can keep an eye on some of the broader data points out there and try to triangulate your thinking on business momentum? Thanks. Marc Benioff: Well, I think it's such a good question because you know, of course when you are addressing a market with a set of products, capabilities you're going to have a set of strategies, as well as a set of tactics. You're going to have plays, as well as products, programs and you're going to do that differently by geography different by industry. I think we already know that, unlike the financial crisis, the way that this has discriminated against different industries is quite different than anything we've ever seen before and has been quite shocking, that will take some time for them to recover. In other industries and it causes them to grow faster than they anticipated, I mentioned with AT&T, that's obviously a company during this moment to become more digital, to become a strong position, they're going to accelerate into it. My personal belief is always that in a moment of crisis, you need to invest through it. Maybe not every company can do that, but a lot of companies surprisingly can, that's why you have to offer a full portfolio capability. I really saw that come together in the first quarter, I was really impressed with the bookings that we achieved in the first quarter, as it kind of started to get crazy in the middle of March. I was like, wow! what is going to happen at the end of March and then through April, well, this was the best of Salesforce. This was the best I've ever seen Salesforce perform. I mean, it was just incredible to see all of our Ohana, sales organization, service, engineering across the board. And then in the second quarter, well as I mentioned, I'm already really inspired by the bookings numbers that I've started to see and the pipeline numbers. So, we're quite optimistic about what the future that's going to look like for us. And Brian, do you want to fill in a couple of details for us? Brian Millham: I appreciate that Marc. And I appreciate the question. For us, it's about being very relevant to our customers. It's about chilling up and listening deeply to what they're going through and what we're finding is were more relevant than we've ever been to our customers and that's a great place to be. I couldn't be happier with the broad portfolio of products that we have to go address the problems our customers are facing today is a great product team, building incredible products, work.com is a perfect example of something that we've reacted to very, very quickly and are helping our customers address these core issues. And when you sit in that position, I think it's why we see our pipelines accelerating right now. So just very, very pleased with where we sit today. Operator: And your last question comes from Brent Thill with Jefferies. Please go ahead. Your line is open. Brent Thill: Thanks, Marc spec, it encouraged by the bookings going into Q2. Can you give me any color, what you saw from April into May, many tech companies have seen stablization in improvement or are you seeing similar trends through the month of May? And then maybe for Mark, just on the expense side, either a lot of questions that this environment may kind of permanently shifts some of the expenses across tech, do you think there's some permanent lasting effect that can inherently make you more profitable through this as we exit out? Thanks. Marc Benioff: Well, I'd really like to turn it back over to Gavin for a second to Brian and have them address the customer environment that we're seeing and then maybe Brett could fill in the details on the pipeline as well. Gavin? Gavin Patterson: Yes, sorry, sorry. Marc, we were saying competence is building almost week-by-week so clearly there was a shot that hit the system particularly in March, but as we go in through April and we moved through May, I would say bit-by-bit and it's not in the recovery market-by-market. It's not the same point in every market yet, but the broad building confidence we're getting to see get much better visibility for bookings not just in Q2 but into Q3 and Q4. And I can sense the confidence building in the sales organization. We're not getting carried away with ourselves. But going back to a point that's been made a couple of times on the call, the relevance of our product set and particularly the work.com is proving that actually more than ever our products are important to our customers and lead to a digital revolution and transformation that our customers are going to go through. So as I say – I'm pretty bullish about what I'm seeing at the moment and we'll continue to see it grow, I think from here. Marc Benioff: Brian, do you want to fill that in? Brian Millham: Yes, I would just second the comments, we're seeing tremendous confidence in our sales very, very good year-over-year, and those compares against a quarter when we didn't have a pandemic. And so we're feeling very confident about the pipeline growth as Gavin said appropriately, we're not getting overconfident. We need to go out and execute, but we feel very good about where we sit. And, and I hate to repeat myself, but in the – in a time when you need to be relevant, you can have products that fit the customer need. We feel like we're in a very good position right now. So I'm very, very happy with where we are in the early month of the quarter. Bret? Bret Taylor: Yes, I think anchoring both Gavin and Brian's comments and I've had three customer meetings already to there and every single one had one theme, which is everyone's looking past the pandemic towards the next normal and the new normal. And I think all of us have the humility to know that, we're not a 100% sure what that's going to look like, but it's a completely new experience for our customers, employees, and their customers. And they are looking at our solution as the most relevant platform available to really help their customer, help their company transition to that new normal. So that's really what we're seeing. I think there's still uncertainty out there, but I think people started this reopening process and you're seeing it in the momentum in the business. Marc Benioff: I'd love to have Amy Weaver, give us the closing words on her, because she's been involved in so many of our customer discussions and Amy, can you fill in exactly how do you see the situation moving forward? Amy Weaver: Well, I'm excited to see this moving forward a few months, but when I look at what we went through and where we're going, what really stands out to me is that everything we executed during this quarter and every plan that we're making for the future, we're doing it in line with our core values, with trust, with customer success, with innovation and with the equality. And I think that we found that these values serve the company so well, at least to a stronger company, stronger relationships with our customers, stronger relationships with our communities and really a great position for all of our stakeholders. So thrilled to be part of it and looking forward. Marc Benioff: Parker love for you to wrap it up. You've had the full perspective, you've done a phenomenal job developing and delivering work.com and Customer 360. Can you give us your words of wisdom? Parker Harris: Yes, I think I would just close by saying, we're all in our homes right now as everyone probably listening to this call as in their home. And yet as a management team, I think we've never been closer which is kind of odd that we've been sent to our homes and yet we're operating more closely than ever and faster than ever Marc and I said, it's kind of like, we're back to the startup days and we're a 50,000 plus employee company. And I've had the same experience as Bret was saying in working with our customers, we are no longer walking into our customer's offices and tubes and having that kind of separation where in their homes with them and to their homes as we're selling to them and supporting them and servicing them. And it's just a sign of the success that we've had and building that trust with our customers for 21 years. And I guess the reason why we're coming through this as we are. And so I hope all of you who out there are also having that same experience and just really proud of what we've done as a company during this crisis. Marc Benioff: Okay. Back to you, Evan. Mark Hawkins: Okay. Marc, do you want me to – maybe I should just tackle the last part of the Brent question there and then we'll go to Evan. One, Brent, we definitely are always looking for opportunities as the environment has shifted, it provides an opportunity for us to take a beginner's eye on everything and we're certainly doing that. You heard whether it's pipe gen, whether it's re-imagining everything we're doing, certainly travel or there's so many different examples, but we're constantly looking at focusing, obviously in delivering growth profitability and cash flow over the long-term. We're obviously very excited about the long-term opportunity to serve our customer and help them and we're very aligned. Parker's comment was really awesome about, we're very aligned around how to navigate through this and get beyond this point in time and really seize the opportunity for an unbelievably strategically positioned situation to serve our customers over the long-term. Marc and Evan back to you. Evan Goldstein: Thank you all for joining us for our call today. And we look forward to speaking with you next quarter. Hope you were all safe and healthy. Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
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Salesforce (NYSE:CRM) Continues Strong Market Performance in Q3 Fiscal Year 2025

  • Earnings per Share (EPS) of $2.41, slightly below the estimated $2.44, indicating robust profitability.
  • Revenue of approximately $9.44 billion, surpassing the estimated $9.37 billion, showcasing strong market demand.
  • Low debt-to-equity ratio of 0.051, reflecting a conservative financial strategy and reduced financial risk.

Salesforce (NYSE:CRM) is a leading provider of customer relationship management (CRM) software, helping businesses manage customer interactions and data. The company competes with other tech giants like Microsoft and Oracle in the CRM space. Salesforce's recent financial results for the third quarter of fiscal year 2025 highlight its continued strong market performance.

In the third quarter, Salesforce reported earnings per share (EPS) of $2.41, slightly below the estimated $2.44. Despite this, the company generated revenue of approximately $9.44 billion, surpassing the estimated $9.37 billion. This revenue growth underscores Salesforce's ability to outperform market expectations and maintain its competitive edge.

Salesforce's financial metrics provide further insights into its market valuation. The company has a price-to-earnings (P/E) ratio of approximately 44.20, indicating how the market values its earnings. Additionally, its price-to-sales ratio stands at about 9.27, reflecting the market's valuation of its revenue. These ratios suggest that investors have high expectations for Salesforce's future growth.

The company's enterprise value to sales ratio is around 9.14, and its enterprise value to operating cash flow ratio is approximately 27.12. These figures highlight Salesforce's efficiency in generating revenue and cash flow relative to its market value. Moreover, the earnings yield of about 2.26% provides insight into the return on investment for shareholders.

Salesforce maintains a low debt-to-equity ratio of 0.051, indicating a conservative approach to leveraging. This low ratio suggests that the company relies more on equity than debt to finance its operations, reducing financial risk. Additionally, with a current ratio of approximately 1.11, Salesforce demonstrates its ability to cover short-term liabilities with its short-term assets, ensuring financial stability.

Salesforce Shares Surge 13% on Optimistic Annual Guidance and AI Innovation

Salesforce Inc. (NYSE:CRM) saw its shares climb over 13% in pre-market today after delivering strong annual guidance despite mixed third-quarter results. While earnings fell short of Wall Street estimates, the company’s commitment to driving growth through AI innovation garnered investor enthusiasm.

For the third quarter, Salesforce reported adjusted earnings per share of $2.41 on revenue of $9.44 billion. While EPS came in slightly below the $2.44 expected, revenue surpassed the $9.35 billion consensus.

Salesforce continued its push into AI, heavily investing in its Agentforce product. Designed to align with the broader AI trend seen across tech giants like Microsoft, Agentforce focuses on creating autonomous task-performing agents. The company announced plans to hire 1,400 additional employees in the fourth quarter to meet growing demand, with the product securing over 200 deals in a single week.

Looking ahead, Salesforce offered optimistic guidance. For the fourth quarter, the company projected adjusted EPS between $2.57 and $2.62 on revenue of $9.90 billion to $10.10 billion. For fiscal 2025, it raised the lower end of its revenue forecast to $37.8 billion to $38.0 billion and expects adjusted EPS between $9.98 and $10.03.

Salesforce.com, Inc. (CRM) Surpasses Earnings and Revenue Estimates

  • Salesforce.com, Inc. (NYSE:CRM) reported an impressive EPS of $3.54, significantly beating the estimated $2.44.
  • The company achieved a revenue of approximately $9.44 billion, surpassing the estimated $9.35 billion.
  • Salesforce's positive fiscal fourth-quarter guidance and an 8% year-over-year revenue growth have boosted investor confidence, leading to a 5% increase in stock price in extended trading.

Salesforce.com, Inc. (NYSE:CRM) is a leading cloud-based software company specializing in customer relationship management (CRM) solutions. It competes with other tech giants like Microsoft and Oracle in the CRM space. Salesforce's innovative platform helps businesses manage customer interactions, sales, and marketing efforts efficiently.

On December 3, 2024, Salesforce reported impressive earnings per share (EPS) of $3.54, significantly surpassing the estimated $2.44. This strong performance reflects the company's ability to exceed market expectations. Salesforce also achieved a revenue of approximately $9.44 billion, outpacing the estimated $9.35 billion, as highlighted by Zacks Investment Research.

The company's third-quarter results, ending in October 2024, showed an 8% year-over-year revenue growth. This growth, coupled with Salesforce's raised full-year sales and profit outlook, has positively impacted its stock price, which increased by 5% in extended trading, as reported by CNBC. The positive fiscal fourth-quarter guidance further boosted investor confidence.

Salesforce's financial metrics reveal a robust market valuation. The company has a price-to-earnings (P/E) ratio of approximately 40.62 and a price-to-sales ratio of about 8.52. These figures indicate the market's high valuation of Salesforce's earnings and sales. Additionally, the enterprise value to sales ratio is around 8.39, while the enterprise value to operating cash flow ratio is approximately 24.90.

The company's financial health is further supported by a low debt-to-equity ratio of 0.051, suggesting a conservative use of debt. Salesforce maintains a current ratio of 1.11, indicating its ability to cover short-term liabilities with short-term assets. The earnings yield of 2.46% reflects a solid return on investment for shareholders.

Salesforce Price Target Raised to $380 Ahead of Earnings Release

CFRA analysts raised their price target for Salesforce.com (NYSE:CRM) to $380 from $343 while maintaining a Strong Buy rating. The analysts highlighted the company’s potential for growth stabilization and margin expansion, supported by AI monetization.

The revised price target was based on a higher projected price-to-earnings ratio of 30x for 2026 EPS estimates, aligning with peers but remaining below historical averages. Earnings projections were maintained at $10.07 for fiscal 2025, $11.10 for 2026, and initiated at $12.68 for 2027.

Ahead of its October-quarter results, set to be released today, after the market close, Salesforce was expected to report revenue of $9.3 billion, reflecting a 7% year-over-year growth, and EPS of $2.45. Guidance was anticipated to align closely with market expectations of $10 billion in revenue and $2.65 in EPS for the next quarter.

Despite decelerating growth rates since the pandemic's peak, the analysts cited easier comparisons ahead and the stabilizing effect of incremental AI monetization as drivers for renewed momentum. Salesforce’s AI strategy, including the rollout of Agentforce, was expected to gain traction across enterprise markets by the second half of 2025. Additionally, the company’s usage-based pricing approach was seen as a factor in balancing subscription revenue pressure from do-it-yourself and productivity-related gains.

With net cash reserves of $9.2 billion and an anticipated free cash flow increase to over $13 billion by 2026, the analysts projected further upside for Salesforce as it capitalizes on its AI initiatives and broadens its enterprise appeal.

Salesforce Inc (NYSE:CRM) Price Target and Earnings Preview

  • Salesforce Inc (NYSE:CRM) has a new price target set by CFRA at $380, indicating a potential upside of 14.8%.
  • Wall Street analysts expect an EPS of $2.44 and revenues of $9.34 billion for the upcoming third-quarter earnings.
  • The stock has experienced significant volatility, with a yearly high of $348.86 and a low of $212.

Salesforce Inc (NYSE:CRM) is a leading cloud-based software company that provides customer relationship management services. It competes with other tech giants like Microsoft and Oracle in the CRM space. On December 2, 2024, Aaron Siegel from CFRA set a price target of $380 for CRM, suggesting a potential upside of 14.8% from its current trading price of $331.01.

Salesforce is preparing to announce its third-quarter earnings, with Wall Street analysts expecting an EPS of $2.44 and revenues of $9.34 billion. These figures will be released after market hours, and they are crucial for investors to assess the company's financial health and growth prospects. The current stock price of $331.01 reflects a modest increase of $1.02 or 0.31%.

The stock has shown some volatility, with a daily range between $330.42 and $334.49. Over the past year, CRM has experienced a high of $348.86 and a low of $212, indicating significant price movement. This volatility can be attributed to various market factors and investor sentiment towards the tech sector.

Salesforce's market capitalization is approximately $316.45 billion, highlighting its substantial presence in the tech industry. The trading volume of 4,545,198 shares on the NYSE suggests active investor interest. As the company prepares to release its earnings, these metrics will be closely watched by investors and analysts alike.

Wedbush Boosts Salesforce Price Target to $325, Citing Strong AI Demand and Customer Adoption of Full Product Suite

Wedbush analysts raised their price target on Salesforce (NYSE:CRM) to $325 from $315, maintaining an Outperform rating on the stock.

The analysts expressed growing optimism about Salesforce's future, citing positive customer feedback and an increasing number of use cases for the company's full product suite. They noted that Salesforce is well-positioned to capitalize on rising demand for AI-driven solutions, helping organizations enhance automation and efficiency.

The analysts highlighted the strong risk/reward profile of Salesforce at current levels, particularly as the company's Agentforce strategy unfolds over the coming years. The analysts believe the growth potential within Salesforce’s installed base remains underappreciated by the market, reinforcing Salesforce as one of their top tech picks for the next year.

Goldman Sachs Upgrades Salesforce to "Buy" Following Dreamforce Event

  • Goldman Sachs upgraded Salesforce (NYSE:CRM) to a "Buy" rating, indicating a positive outlook after the Dreamforce event.
  • Salesforce introduced new generative AI tools at Dreamforce, emphasizing innovation and competitive edge in the CRM software market.
  • The company's focus on data security and the strategic direction towards AI advancements has bolstered investor confidence, reflected in a 5.37% rise in stock price.

Goldman Sachs recently upgraded its rating on Salesforce (NYSE:CRM) to a "Buy" from a previous stance, following a comprehensive review after the company's Dreamforce event. This adjustment, announced on September 19, 2024, reflects an incrementally positive outlook on Salesforce, with the stock price at $265.99 at the time of the announcement. Despite this upgrade, the recommendation to investors remains a "hold," indicating a cautious optimism towards the company's future performance.

Salesforce, a leading player in the customer relationship management (CRM) software market, has been making significant strides in integrating artificial intelligence (AI) into its offerings. The company's co-founder and CEO, Marc Benioff, recently showcased new generative AI tools, termed "agents," at the annual Dreamforce event. These tools are designed to simplify the integration of AI into business operations, eliminating the need for companies to develop their own AI solutions from scratch. This development is a testament to Salesforce's commitment to innovation and its efforts to maintain a competitive edge in the tech industry.

Furthermore, Salesforce's emphasis on data security, particularly within its Slack platform, was highlighted by Benioff as "rock solid." This reassurance is crucial as businesses increasingly rely on digital communication tools and seek assurances regarding the safety of their data. The discussions at Dreamforce also touched on the broader implications of AI technology, including safety, regulation, and potential job impacts. These conversations underscore the importance of AI in the tech industry and the need for a balanced approach to its adoption and regulation.

The stock's performance, with a notable increase to $265.99, marking a 5.37% rise, reflects investor confidence in Salesforce's strategic direction and its ability to capitalize on AI advancements. With a market capitalization of about $254.29 billion and a trading volume of 9.98 million shares, Salesforce remains a formidable force in the tech sector. The company's efforts to enhance its AI offerings and address critical issues surrounding technology adoption and security are likely to continue driving its market position and appeal to investors.