Salesforce, Inc. (CRM) on Q2 2023 Results - Earnings Call Transcript

Operator: Welcome to Salesforce Fiscal 2023 Second Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would like to have over the conference to your speaker Mr. Mike Spencer, Executive Vice President of Investor Relations. Sir, you may begin. Mike Spencer: Thank you, Emma, and good afternoon, everyone. Thanks for joining us today for our fiscal 2023 second quarter results conference call. Our 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, Chair and Co-CEO; Bret Taylor, Vice Chair and Co-CEO; and Amy Weaver, Chief Financial Officer. We'll also be joined by Brian Millham, President and Chief Operating Officer, who will be available for the Q&A portion of the call. As a reminder, our commentary today will include non-GAAP measures. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings and press release. Some of our comments today may contain forward-looking statements that are subject to risks and uncertainties and assumptions, which could change. Should any of these risks materialize or should assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risks and uncertainties and assumptions and other factors that could affect our financial results is included in our SEC filings, including our most recent report on Forms 10-K, 10-,Q and other SEC filings. And with that, let me hand the call to Marc. Marc Benioff: Well, hey, thanks, Mike and thank you, everyone, for being on the call today. As you saw in the results for the quarter, we've delivered really strong revenue growth, profitability, and cash flow, showing yet again the resilience and durability of our business model in this economic environment. Revenue in the quarter was $7.7 billion, up 22% year-over-year or 26% growth in constant currency. We had a great quarter, but yet again, the dollar had an even stronger quarter and we continue to see the impact on foreign exchange and currency fluctuation on our financials. For Q2, we saw approximately $250 million of headwind to revenue, which is roughly $50 million more than we assumed in our guide last quarter, and we now expect a total of $800 million foreign exchange headwind year-over-year for the full fiscal year. Operating margin was in the quarter was 19. 9% and we delivered $334 million in operating cash flow. Our remaining performance obligation or the total undelivered contract value that we have with our customers is really an incredible $41.6 billion, and this is revenue signed. It's not yet recognized. Now, turning to guidance. Over the last few months, I've met with hundreds of CEOs with economists, business leaders, political leaders, and other experts about their business and where they see this global economy heading and I don't think it's going to surprise anyone, everyone has got a slightly different answer. And it doesn't matter who you speak to, could be a different geography, a different position. Everybody sees things at a slightly different way right now. But what we do know and what I think everyone will agree on is that digital transformation remains the number one priority for CEOs and that every digital transformation begins and ends with the customer. That's what continues to drive our business forward, and it's why Salesforce is the number one CRM by market share globally, according to the IDC Software Tracker. Now, for those of you who have been on these calls with us, we've all been through a number of these economic cycles and we've especially seen that over our last 23 years. And ones like this come around, we see customers becoming more measured in the way they buy. Sales cycles can get stretched. Deals are inspected by higher levels of management, and all of this, we began to start to see in July. Nearly everyone I've talked to is taking a more measured approach to their business. We expect these trends to continue in the near term and we reflected this in our guidance. Given the significant impact of foreign exchange and buyers being more measured, we're revising our fiscal '23 revenue guidance to $30.9 billion to $31 billion or about 17% growth year-over-year or 20% in constant currency. At the same time, we're maintaining our fiscal year '23 operating margin guide of 20.4%, an expansion of 170 basis points year-over-year. This is further evidence that we remain deeply committed to consistent, disciplined margin, cash flow and revenue growth as part of our long-term plan to drive both top and bottom line performance. We have the right team, the right products, the right playbook, for getting to $50 billion in revenue in fiscal year '26. We always get questions about our M&A strategy and what company we're going to acquire next and what we're going to do next from an acquisition cycle. I think we get this question every single earnings call that we do like this. And it's always one of my favorite parts of the call. And I'm excited to tell you we have found a great cloud company, growing revenue for 73 consecutive quarters through every economic cycle, it's got great cash flow, number one market share, an incredible brand, one of the most admired companies in the world, great values, fantastic community of 17 million trailblazers, fantastic commitment to its community, runs across 90 countries and that company is Salesforce. We're thrilled that our Board of Directors has authorized up to $10 billion in our first-ever share repurchase. This reflects the confidence we have in our business and in our approach to generating shareholder value. Brian Millham is going to expand in more detail about the broader capital allocation strategy in a moment. And you'll also hear about some amazing customer wins in the quarter. I'm especially proud of a major deal we closed in the quarter with the US Department of Veterans Affairs, and it's one of our most meaningful partnerships. The VA is a relationship that we've been building for over six years, and now Salesforce is becoming the digital front door for our veterans and their families. We can't be more proud to do our part in helping those who have made sacrifices in serving the nation. It's been an incredible year so far being able to connect with our customers in person again, has been just amazing. We've done 63 marketing events so far this year, hosting over 250,000 trailblazers and counting but none is more exciting on every level than Dreamforce and we're hoping to see all of you as we celebrate our 20th Dreamforce, September 20th through the 22nd right here in San Francisco. It's a celebration of our Trailblazers, and we're going to expect 150,000 people to be here and registered to attend. And we'll also be streaming the entire three days on Salesforce+ and expect millions more to tune in. We have an amazing line of product announcements and innovations and speakers and giving back. It's going to be a big Dreamforce. It's going to be really the biggest Dreamforce ever, our 20th ever Dreamforce. And we're also going to be celebrating the impact Salesforce has had through our 1-1-1 philanthropic model. As we've now surpassed over $0. 5 billion in grants, 7 million hours of volunteerism and more than 50,000 nonprofits using Salesforce for free. At Dreamforce, the amazing Red Hot Chili Peppers that's Anthony and his entire band, playing to everyone. They're going to be performing at our annual benefit concert with 100% of the proceeds going to our children's hospitals right here in San Francisco and in Oakland. So please tell your friends, tell your firms, tell your vendors, tell everybody to get sponsorships to Dreamfest because it's going to be incredible. And of course, you're all invited to our Investor Day during Dreamforce on September 21st. Amy, are they invited even if they don't do the Dreamforce sponsorship? Amy Weaver: Yes, Marc, they are invited. Marc Benioff: All right. Look, you're not going to want to miss it. Look, before handing off to Bret, I'd like to congratulate Brian Millham, our new Chief Operating Officer. Brian is employed number 13 and has been helping us to build this company from its earlier days. As Chief Operating Officer, Brian is going to continue to lead our customer success organization and now adds global sales to his responsibilities. Bringing our incredible customer success ecosystem, Sales Cloud sales even closer under Brian will help us to deliver the full power of Salesforce to every one of our customers in the new economy. And we're so fortunate that Gavin Patterson has taken on this important new role as Chief Strategy Officer, helping us to guide our strategic direction. And thank you and congratulations to Gavin. I'm so grateful to Gavin, who for the last two years during the pandemic has overseen one of Salesforce's most rapid growth periods in Salesforce's history. When I look back at the last three years, I saw it was really only two years ago, in fiscal year 2021, when we did, proud, I think it was about $5.1 million. Is that $5.1 billion -- is that right, Mike, something like that? And then last year, I think for Q2, we did something like $6.3 billion, and now we're doing $7.7 billion, did I get the numbers right? I mean it's an incredible trajectory of growth from over the last 24 months. And I couldn't be more proud of Gavin to help us during that period and now Brian, in your COO role. Congratulations to Brian and Gavin. And with that, I'm going to turn it over to Bret. Bret Taylor: Thanks Marc and congratulations, Brian and Gavin. As Marc said, we had another strong quarter delivering strong top and bottom-line performance. Our results demonstrate the durability of our business model and the strength of our strategy. Our Customer 360 product portfolio is the industry standard and the market leader, a leader in 12 current Gartner Magic Quadrant reports. And the platform is helping hundreds of thousands of companies in every industry digitally transformed. Our technology is also deeply differentiated. Einstein Artificial Intelligence platform is now doing over 175 billion predictions every day, just incredible. Our go-to-market capability is also unmatched in the industry. The diversity of the industries, regions, and lines of business we serve has driven the durability and resilience Marc talked about and you've seen in our business over the past 23 years. And finally, our ecosystem is unparalleled in enterprise software. As 150,000 Trailblazers joined us for Dreamforce next month, they represent a global community of developers, administrators, and ISVs, 17 million strong that are driving what IDC estimates to be $1.6 trillion in new business revenues by 2026. As you heard from Marc, we're in a more measured buying environment. Executive teams are scrutinizing all purchasing decisions, and we are seeing some deals take longer to close. I personally met with over hundred CEOs this quarter in my travels across Latin America, Europe, and North America and digital transformation remains their top priority. But the focus of the conversation has shifted meaningfully towards productivity, efficiency, and time to value. In this environment, our Customer 360 portfolio is uniquely positioned to enable our customers to deliver both growth and cost savings. And you can see it in this quarter's results. Sales Cloud revenue grew 15% year-over-year, a healthy 19% in constant currency, including customer wins at CDW, Zscaler, and Schneider Electric. Using our Sales Cloud and CRM analytics, Schneider reduced their close time by 30%. And with MuleSoft, they saved 40,000 hours of employees' time and saved $2.7 million in IT costs. Service Cloud grew 14% year-over-year or 18% in constant currency, including customer wins at the US Department of Veterans Affairs, Workday and Uber. Our digital service product line, in particular, accelerated as customers pivoted their spend to digital technologies that reduce customer service costs. Uber Eats is a great example. Uber Eats saw a 20% improvement in productivity across e-mail, chat and phone support channels with our Service Cloud and more importantly, with their investment in our Einstein AI chat bots, they improved their call deflection by 30%. Our Marketing and Commerce Cloud grew together 17% year-over-year or 22% in constant currency, including significant expansion of our relationships with Live Nation, L'Oreal and Tapestry. In our Commerce Cloud, we are seeing GMV growth decelerate in line with the rest of the e-commerce industry as consumers settle back down to pre-pandemic norms. Platform, including Slack, grew 53% or 56% in constant currency, including great Slack expansions at organizations like the National Weather Service, Coursera and Mercado Libre. The National Weather Service selected Slack as its platform to connect over 4,300 employees with emergency managers, public safety decision-makers and local media partners nationwide. I'm also excited to say that we will have over 12 Slack product integrations with our Customer 360 platform live and generally available by Dreamforce, where we have an incredible opportunity to help every one of our customers build their digital HQ and Slack in this new era of flexible work. Data, which includes MuleSoft and Tableau, grew 12% year-over-year or 13% in constant currency with wins at brands like Atlassian, Siemens Energy, CBRE Group and King Power, which is Thailand's leading travel retailer. I'm heartened by the progress we're seeing in our go-to-market transformation of MuleSoft. We are on-track to have MuleSoft return to be in a tailwind for revenue growth in the back half of the year. And finally, our 12 industry clouds were another bright spot in the quarter, growing faster than our line of business cloud as our customers are increasingly focused on time to value and reducing their implementation costs. The out-of-the-box industry processes, we've built into our industry clouds are a compelling value proposition in this more measured by environment and I'm excited about the new processes we brought to market in the first half of the year, including trade promotion management for consumer goods and our virtual assistant for our Financial Services Cloud. As we head towards Dreamforce, our pace of organic innovation has never been stronger. In our summer release alone, we delivered key innovation like revenue intelligence for predictive forecasting, the ability to talk to your data through Tableau, MuleSoft Robotic Process Automation and a new Lakehouse Architecture for our customer data platform. And just this week, we launched Salesforce Easy, a new all-in-one self-service suite for sales, marketing, service and commerce that is going to transform how small businesses engage with Salesforce. As you'll hear more from Amy, we're committed to durable growth at scale. We're committed to our 20.4% operating margin this year, and I'm excited that we're announcing our first ever $10 billion share repurchase program today. Our capital allocation strategy is simple. We will continue to expand our free cash flow margin as we scale. We will invest in our organic innovation. We will reduce the impact of dilution, both by offsetting stock-based compensation and by maintaining a healthy balance sheet to fund any future M&A. I'm so grateful to our 17 million Trailblazers, all of our partners and most importantly, our employees for helping provide our customers with the innovation, agility and resilience they need to navigate these uncertain times. Now over to Amy to discuss the financial details of the quarter. Amy Weaver: Great. Thank you, Bret, and congratulations, Brian. I'm pleased to report strong top and bottom line financial results for Q4 -- Q2. That is pleased to report strong top and bottom-line financial results in Q2. As you've heard from Marc and Bret, our diversified portfolio remains well-positioned to help our customers both grow and drive efficiencies in their business. Our customers are relying on us more than ever to be their trusted adviser, partnering with them on their digital roadmap. Now, let me walk through our results for Q2 of fiscal 2023, beginning with top line commentary. Total revenue for the second quarter was $7.72 billion, up 22% year-over-year or 26% in constant currency. FX continued to represent a headwind as the dollar continued to strengthen throughout the quarter. In Q2, the headwind from FX was about $50 million more than we had guided. A few highlights from the quarter. Sales Cloud continues to be a critical piece of our customers' success, helping companies drive more productive growth. In Q2, Sales Cloud grew 15% year-over-year and 19% in constant currency. Service Cloud grew 14% year-over-year and 18% in constant currency as we help our customers realize efficiencies and cost savings. As customers focus on their digital strategy and transformation, we continue to see growing multi-cloud adoption. In Q2, the number of customers who have purchased five or more clouds, again grew in double digits. And Slack continued to outperform our revenue expectations with revenue of $381 million. Splunk continues to gain traction with customers. And in Q2, seven of our top 10 deals included Slack. And for the fifth consecutive quarter, the number of customers spending greater than $100,000 with Slack, grew by more than 40% year-over-year. Now, for a quick update on data. I'm pleased to say that data passed $1 billion of revenue this quarter. And with that, all of our five clouds are now generating more than $1 billion in revenue a quarter. Data growth of 12% or 13% in constant currency was driven by MuleSoft total revenue growth of 15% and Tableau growth of 9%. As a reminder, approximately half of MuleSoft and Tableau's total contract value is recognized in period, resulting in more quarterly volatility than our other core products. Turning to revenue attrition. Rates remain at record lows, ending Q2 at approximately 7.5%. Q2 non-GAAP operating margin was 19.9%, driven by our continued focus on disciplined decision-making and prioritization. Q2 GAAP EPS was $0.07 and non-GAAP EPS was $1.19. Mark-to-market accounting of the company's strategic investments benefited GAAP EPS by $0.03 and non-GAAP EPS by $0.04. Operating cash flow was $334 million in Q2, down 13% year-over-year. CapEx was $203 million, resulting in free cash flow of $131 million, down 24% year-over-year. Now, before getting to our RPO performance and guidance, I'd like to address the current economic environment. As both Marc and Bret mentioned, we started to see more measured buying behavior from our customers, which began in the last month of the quarter. This resulted in stretched sales cycles, additional deal approval layers, and deal compression. In addition, we saw a slowing in our create and close, Slack self-serve and F&B businesses, which tend to be leading macro indicators. Geographically, this behavior was most pronounced in North America and major European markets, while Japan was relatively more resilient. From an industry perspective, retail, consumer goods and communications and media were the most impacted, while high tech, energy and financial services stayed more consistent during the quarter. And from a product perspective, commerce and marketing saw more pronounced decelerations, while sales and service remains strong. Turning to Remaining Performance Obligation, or RPO, which represents all future revenue under contract. It ended Q2 at approximately $41.6 billion, up 15% year-over-year. Current Remaining Performance Obligation, or CRPO, was approximately $21.5 billion, up 15% year-over-year and 19% in constant currency. This includes 1 point of incremental FX headwind beyond our Q2 guidance. Moving to Q3 guidance. We expect revenue of $7.82 billion to $7.83 billion or approximately 14% growth year-over-year and 18% in constant currency. This reflects a $250 million FX headwind. We also expect the $380 million contribution from Slack. As a reminder, Q3 represents the fifth quarter of Slack contributions to revenue. Therefore, the year-over-year growth rates will be normalized. CRPO growth is expected to be approximately 12% year-over-year or 15% in constant currency. And we expect GAAP EPS of $0.09 to $0.10 and non-GAAP EPS of $1.20 to $1.21. Now turning to our full year fiscal '23 guidance. We are now guiding to fiscal '23 revenue of $30.9 billion to $31.0 billion or approximately 17% growth year-over-year, 20% in constant currency. This incorporates the trends and customer behavior that we saw at beginning in July. The total year-over-year FX headwind is now $800 million, an incremental $200 million year-over-year since our previous guidance. As a reminder, the currency is most impacting our revenue are the Euro, the British Pound, the Japanese Yen and to a lesser extent, the Australian Dollar. Our guidance continues to assume a $1.5 billion contribution from Slack. As a company, we remain committed to profitability over the long term. And while we see a more deliberate customer buying behavior, I am pleased to hold our fiscal '23 non-GAAP operating margin guidance at 20.4%, an increase of 170 basis points year-over-year. This margin guidance includes roughly 100 basis points of headwind from Slack. As a reminder, because our regional revenue and expenses are generally in the same currencies, there tends to be a natural FX hedge in our operating margin. For the full year, we expect GAAP EPS of $0.38 to $0.40 and non-GAAP EPS of $4.71 to $4.73. And please recall that our OIE and EPS guidance assumes no further mark-to-market adjustments of our strategic investment portfolio. We are updating our fiscal '23 operating cash flow guidance to approximately 16% to 17% growth year-over-year. Our guidance continues to assume a 3-point headwind from cash taxes associated with tax law changes requiring the capitalization of certain R&D costs. We expect CapEx to be slightly above 2% of revenue in fiscal '23, a nominal increase over last quarter's guide, reflecting the revised full year revenue guidance. This results in free cash flow growth of approximately 18% to 19% for the fiscal year. So, to close, as our customers and their executive teams, including the CEO, CIO, and CFO, focus on their digital investment strategy, we are well-positioned with our diversified product portfolio to help drive efficiencies and growth. And we are laser-focused on disciplined decision-making with a commitment to achieving our operating margin guidance. Lastly, let me echo Bret and Marc, we are very, very pleased to be announcing our new share repurchase program today. This step is a reflection of the confidence that we have in the future of Salesforce. And I look forward to seeing everyone at Investor Day on September 21st, where we will go into even more detail on our capital allocation strategy. Now, Emma, let's open up the call for questions. Operator: Thank you. Your first question comes from the line of Keith Weiss with Morgan Stanley. Your line is now open. Keith Weiss: Excellent. Thank you guys for taking the question. I think what's really on top of everybody's mind right now is the takedown in the full year revenue guide and what's causing that? You talked a lot about the macro side of the equation and we definitely see that all around us. We definitely see that in our checks as well. But I think what people want to understand is there anything more to this? Is there anything more execution related, perhaps to go-to-market? And is the change in sales leadership from Gavin to Brian, is this in any way meant to address any shortcoming on the distribution strategy? So, that's part one. Part two, on the expense side equation. Very impressive to be able to sustain 20.4% operating margin target even with the revenues coming down. I guess, for Amy, is there another level of what kind of expense reductions or sort of another gear that you had to sort of go in to be able to sustain that operating margin expansion? And does that impact your ability to sort of invest in the business to sustain those operating margins? Thank you. Marc Benioff: Yes. I'm so happy to talk to you, Keith, and I'll tell you that you're right. We took the guide down really around two points. One is the foreign exchange environment is obviously just unprecedented and we talked about that last quarter as well. I think maybe we were one of the first to really see what was going on. Somehow just being on the ground in some of these countries that have been so dramatically hit. But to look at where we are right now with the yen, we look where we are right now with the euro. I think the euro maybe just broke parity yesterday. I mean it's -- we're really in an unprecedented moment in foreign exchange. And on the other side, as I said and I think as the team has really emphasized, really starting in July, we started to see some metrics where we're like, where do we exactly want to be for the year? And what is appropriate for us? And how do we correctly characterize where the business is? And that is really how we kind of put together this guide, which we think is the appropriate way to communicate the status of the business because we want to be in a place where we're communicating exactly where we are. So, I'm sure Amy is going to amplify that as well. Amy Weaver: Sure, Marc. I think you nailed it on that. When we look at the guide, I believe the guide is appropriate under the circumstances we're seeing right now. And as you know that there's two key drivers. The first part is FX, the key currencies, the euro, the pound, the yen, they've all weakened to near historic levels, and we're seeing that impact on our topline as we look forward to the rest of the year. For the remaining part, as we called out, there was a distinct shift in customer buying behavior that we saw near the end of the quarter. And for purposes of the guide, we're assuming that those conditions endured through about the half of the year. Now turning to your second part of your question, which I think was on op margin. As you know, I was very happy that we are committed to 20.4% and holding that, despite bringing down the top line. This is largely coming from a more disciplined approach. It is not a result of one single change. We are continuing to unlock incremental efficiencies across the business. We're asking each leader to step up and look at their businesses and prioritize. I do believe that we are continuing to invest into growth, which still remains our number one priority. In terms of the specific drivers, definitely continuing to take a measured approach and a very deliberate approach on hiring. On T&E, we are prioritizing for customer-facing travel. And again, we are continuing to benefit from some of the decisions we've made over the last few years on real estate. Operator: Your next question comes from the line of Brent Thill with Jefferies. Your line is now open. Brent Thill: Good afternoon, Marc. I'm curious if you could talk about Brian's new role. And I think there's a lot of concern as new how the sales comes in that there's some transition period and can you just address this transition period? And I know he's been with the company for over 20 years and highly regarded, but there's a lot of investors that would love to hear your perspective on this? Marc Benioff: Well, that would be my pleasure. I mean I think a lot of you know Brian, he's been a trusted part of our management team for over 20 years. And look, the last time he was the Head of Sales was only two years ago, when we went into the pandemic and went through the transition with Keith. You may remember, I put Brian in for, I think, one or two quarters to run global sales, did a fantastic job. He didn't want to continue with it. So, we asked Gavin to step up from his role of -- I think it was International Chairman or European Chairman, I can't remember, honestly. And really proud of Gavin for the last now two years. And then Brian is right here. And I asked Brian if he would come in and take this forward and he agreed. And I couldn't be more grateful to that. I know we have just a trusted hand. In terms of the transition period, I couldn't imagine anybody who will operate the organization so seamlessly and transparently and with ease. And everybody has such a good relationship already with Brian. And he already runs our forecast calls. He's already been a key part of our sales program. I don't expect any transition period at all, and I'm holding him to that actually. Bret Taylor: The other thing I just want to add is, Brian has been running our customer success, professional services and partnership organization for a long time. And I think the story to the pandemic has been our historically low attrition rates and our focus on customer outcomes. And I'm really excited about the opportunity of bringing our global sales organization together with our customer success organization. And it's a really important part of our philosophy. And I think this move... Marc Benioff: Well, we definitely surprised both of us, right, how low attrition, Brian is been able to get? And how great a job he's done. Bret Taylor: And deeply connecting that success motion to our sales motion, I think reflects a philosophical view from Marc and me about really our philosophy. Marc Benioff: Brian, can you just step out of the room while we finish answering this? Do you want to just comment on this? Brian Millham: Yes. First of all, I'm humbled by the opportunity and Marc to your comments. I've been very close to this business for the past 2.5 years working side-by-side with Gavin. I actually was operating in a COO role for him running this business. And I think it's critical as we look at sort of the second half of this year and beyond, this motion of customer success and sales together will drive the outcomes that we're looking for and our customers are looking for. And so I'm thrilled with the results we've seen on the attrition side, thrilled with the results that the customers are getting from the investment they're making in our technology and just so excited to lead the sales. Marc Benioff: Can you just address Brent's direct question on transition time, how hard of a transition is this going to be? Brian Millham: I think it was measured in hours, actually, Marc. I've been running forecast calls already. I'm in the business travel industry customers -- customers yesterday, there will be no transition time. There are no big changes that we're going to be making in our go-to-market other than getting closer to our customers and ensuring that we're delivering value to them in every single transaction that we're working on with them. So, very excited to take this on with zero transition time. Brent Thill: Thank you. Operator: Your next question comes from the line of Raimo Lenschow with Barclays. Your line is now open. Raimo Lenschow: Thank you. Can you -- obviously, the slowdown that we're seeing or the lengthening of sales cycles, there's nothing that is kind of unique to you guys. We heard from other vendors as well. Can you talk a little bit about what you see in terms of client prioritization, in terms of certain projects? Because I do remember from the old times that the front offers always had higher priority because it's revenue generating, et cetera. Are you seeing that now happening as well? And can you speak to that? Thank you. Bret Taylor: Yes, thanks for the question. First, I'll tell you, I think that trend continues. Digital transformation remains our customers' top priority and digital transformation starts and ends with the customer. And fundamentally, all of our customers are really investing into the secular trend of the digitization of their customer experience, their employee experience, and with our portfolio, we're at the top of that list. I think what you're seeing is an increased focus on, I say, three things. One is time to value. The other is ensuring that these projects drive cost savings in addition to customer satisfaction and topline growth. And then the third is reducing complexity and vendor consolidation. Some of the stories I mentioned like Uber Eats, I think, are great examples because it's really about how do you put up things like digital service technology, whether it's chatbots or self-service, to really take out cost and make these projects pay for themselves as opposed to having protracted multiyear implementations. I think vendor consolidation is also a trend that we're seeing and if you look at some of the innovation we're bringing out like our Sales Cloud Unlimited edition, or Salesforce Easy, which I mentioned earlier in my script, they are really efforts to enable our customers to do more with less, to enable them to use Salesforce as their sole vendor, take out some point solutions that perhaps aren't getting the return on investments our customers are looking for, and sort of taking advantage of this opportunity to be the most strategic vendor for our customers right now as they look to really hold their technology to high standards, which is to drive topline and bottom-line performance. Brian, is there anything you want to add? Brian Millham: No, great question, Raimo. And I agree with you that front office is the priority you heard both Marc and Bret, and I'm feeling to when we're out talking to CEOs, digital transformation remains their number one priority, and we need to make sure that we're delivering for them. We're also seeing it in the demand environment. We are still seeing very good generation of pipeline in our business right now. And while we are facing some longer sales cycles and additional layers of deal approvals and potentially some deal compression, the demand environment is solid. And so you're spot on that we are seeing the front office as a priority for every CEO out there. A – Mike Spencer: Thanks Raimo. And we’ll go to next question. Operator: Your next question comes from the line of Brad Sills with Bank of America. Your line is now open. Brad Sills: Great. Thanks for taking my question. Thanks for all the color on where you saw the macro impact. It sounds like SMB marketing commerce, but the core sales and service looks to have held in nicely you didn't call out enterprise. So any specific color on how the core business and the large enterprise, those bigger expansion deals in the core track this quarter? Thank you so much. Bret Taylor: I'll start and then Brian, I'd love your commentary as well. As you said, I think the story, actually, the past number of quarters have been the strength of our core CRM business. Sales Cloud growing at 19% in constant currency is remarkable. This is the product that Marc and Parker built 23 years ago, doing so much revenue growing at 19% is incredible. And you're seeing it just in, I think, the continued strength in our core business. And the other thing I want to call out is, our attrition rate being at historical lows as well. And I think it really reflects the strength of our business. And so, as Amy articulated, as it relates to SMB, GMV deceleration, we're seeing things settle down to pre-pandemic norms, but I still see incredible strength in our core CRM business, in the enterprise. And as I said, I think the durability of our business really rest on the durability and diversity of our portfolio, the diversity of the industries that we serve and the diversity of the segments that we serve. Brian, is there any color you want to add? Brian Millham: Yes. Well said. On the Sales and Service Cloud are sort of the centerpiece of our digital transformation for our customers. And you saw the growth in the quarter and we expect that to continue. We are seeing some compression in some of the larger transactions in our enterprise business and it's not a surprise. I've lived through three of these cycles before, and you can see that maybe people take a more measured approach to their digital transformation, maybe starting with a smaller piece, but a land and expand strategy is something we've used for many, many years, see can grow as a strategy we've used. And so, despite the fact that maybe some of these engagements are a bit smaller, we do see acceleration in these customers in quarters to come. So yes, there was compression out there in some of the business, but we are very confident that we can go execute against the opportunity in front of us in these large enterprise accounts going forward with digital transformation being a top priority. Operator: Your next question comes from the line of Kash Rangan with Goldman Sachs. Kash Rangan: Thank you very much. Lots of exciting news their for Salesforce, congrats on all the changes. My question maybe, Brian, congrats to you as well in your new position. What would you do to turn around the data cloud? I know, clearly, it has had some very significant momentum. But I can, in some sense, look at the new guidance versus the old and say a lot of that delta is basically the slow on the growth rate in the data cloud that is a Tableau and MuleSoft business. Brian, want to get your opinion on that. And is the management team, as you talk to customers, Marc, you've been through these cycles before, what are customers saying as to when they might reengage at the same level of enthusiasm as Salesforce be deal size or close rate. What are the things that they're looking for from a macro perspective or leading indicators in their business, so it could be back to reengaging the way they used to reengage with Salesforce. Thank you so much. Brian Millham: First of all Kash, thanks for the question and I appreciate the kind comments. On the data business, it's a unique business for us because some of it is license based. And you can tend to see some of the headwinds we saw in July show up more immediately there. We feel very good about where both those businesses are right now, particularly in MuleSoft that as you heard Bret say is on a great trajectory and will be a tailwind to our revenue growth in the second half of this year. We feel great about that. Tab is a critical component of our digital transformation with every customer wanting to leverage data to have better insights to the way they operate their business. So, clearly, a lot of focus on these businesses because it is such a critical component of every digital transformation. We feel great about that both those integration and analytics as a category for accelerated growth in the second half. So, no big concerns there at all. I would say on your second question, we are not economists and so we're not going to guide on where when people are going to feel like they're coming out of this. We think we're being appropriate with our guide for the second half of the year based on what we saw transpire in July. Marc and Bret? Marc Benioff: Well, I think the main piece that I would really focus on is really going to be spending as much time as I can with customers at Dreamforce. This is our opportunity to really understand deeply across a wide spectrum of our customers, geographies, verticals, what it is that they are seeing in their own businesses. I think when you look at these customers, we mentioned one at L'Oréal, this has just been an incredible success story for us. We see the B2C story. They're using Marketing Cloud and Commerce Cloud and Service Cloud. The Commerce Cloud story is incredible where they have almost 200 sites globally now for all of their brands. They've got highly customized experiences on the web and mobile and in-store for -- I'm sure a lot of you use the Kiehl's brand. It's a great product. They have a whole new skin hub. They've been with us. They've really reimagine their business using Customer 360. It's a company that we're going to feature and focus and talk about and inspire others at Dreamforce. I think when you see stories like that, when you look at all the stories that we've seen, especially during this pandemic surge over the last two years. It's incredible what folks have done with their businesses. When we get to this moment, I don't think it's a huge surprise that customers are more measured. Everybody is like wondering exactly where the economy is going and how things are moving forward. So, this is a point where people are taking a little bit of a breath and then they will reassess. And then when they get their confidence and kind of a full vision for the next stage of their company, they come in. And until then, it's a lot of the transactional business that we would normally see and move forward with. Operator: Your next question comes from the line of Karl Keirstead with UBS. Your line is now open. Karl Keirstead: Thank you. Maybe I'll direct this to Marc and Amy and it's about the $10 billion share repurchase. So, maybe a two-parter. Marc, maybe for you, why do you think this is the right time in the company's development to move forward with your first large repurchase? And then secondly, should everybody on the line interpret this as a signal that perhaps large M&A may be off the table for now? Thanks so much. Marc Benioff: Well, it's a great question. And I'll tell you this was kind of -- I looked at this quarter very much as kind of a milestone. I'm a big fan of SAP and I have a lot of respect for their business and what they've done in the market over the last 40 -- almost 50 years. And to see our business in July do more than they reported in June in terms of revenue, that was very meaningful to me and I'm very grateful and proud of our team for kind of hitting this tremendous level of scale. But at that same moment, I kind of also can say, okay, what are some changes that we can make? And one of the things, we have such massive cash flow that I think it's completely appropriate for us to look at how we're handling our dilution, for example. I think that's been on the table for a while and a lot of my conversations with investors, they bring it up. We've waited for that moment. I think now is the right moment where we can say, we're going to directly address this with our kind of first ever share repurchase, $10 billion. I'm very excited about it. At the same time, I don't think that, that takes M&A off the table. I think that we continue to look for opportunities. We want to be able to use our cash constructively. This is important for us. It doesn't mean that we're not going to have different kind of guardrails for M&A. And Bret, do you want to just address that point? Bret Taylor: Yes. I think, Marc, you articulated it well. I mean when I mentioned this before, but the pillars of our capital allocation strategy are: number one, that we're going to continue to become more profitable to generate expanded free cash flow overtime. That's what Marc was saying… Marc Benioff: Yes. Thank you for saying that. Bret Taylor: You created a great business model in Software as a Service, Marc, and I think... Marc Benioff: No. I think Bravo committing to this -- committing to the margin for the year is so critical as well for investment. Bret Taylor: It is. And number two, we're going to invest in organic innovation and we talked a bit on -- there's a question Amy earlier on investment. I'm so proud of our investment in organic innovation. You'll see a lot more of it at Dreamforce, but I think we have a better pace of organic innovation that we've had in our history. But – and then finally, we want to reduce the impact of dilution, which is feedback I've gotten from all of you. And we're focused on offsetting our stock-based compensation. And we're also focused on maintaining a healthy balance sheet because we understand that's an incredible piece of leverage we have for future M&A. So, I think this is a way to -- that we can continue to acquire in the future. It's been a big part of our company's history. It will be a big part of our future, but do so in a way that minimizes the impact of dilution, it does in a more shareholder-friendly way. Marc Benioff: And you can see like we've picked up some great companies, whether it was ExactTarget, which was kind of the beginning of really augmenting Customer 360 with our Marketing Cloud and then moving on to MuleSoft was amazing. It's really provided all the integration and the connectivity and then on to Tableau and giving this extension of analytics, so important to so many of our largest customers. And then Slack, I just mentioned L'Oreal, it's an incredible Slack story. They've streamlined their communication. They've got – they have that awesome brand storm event. Have you seen that, Bret? It's that worldwide innovation competition that they do. They've got more than 83,000 student participants 65 countries. They use Slack to drive that thing forward. You look at that, we're a different company because we had an acquisition strategy over the last decade. I don't think we necessarily need to break that. But at the same time, we need to be paying attention to dilution and the overall making sure we have the correct capital allocation strategy as well. Amy Weaver: Marc, I think that's really it. When we look at this, I think this is very much a natural evolution of our capital allocation strategy. And what it really comes down to is that we believe Salesforce is positioned for success over the long term. And this announcement reflects the confidence that we have in our business that as we look forward and our approach to generating shareholder value. Marc Benioff: Yes. And I really think that when we get to Dreamforce and you see how we brought all of these platforms together, integrated them, you're going to see some really powerful integration capabilities. You already saw some of it at the World Tour in New York with kind of the first level of the customer data platform. You're going to see a whole another extension of that kind of capability when we get to Dreamforce. And it's -- I think, as Brett said, it's in a very exciting moment in time when it comes to innovation with the company. Operator: Your next question comes from the line of Kirk Materne with Evercore. Your line is now open. Kirk Materne: Yes, thanks very much. I think this one is sort of for Bret. Bret, I was just wondering if you could go into the industry cloud strategy a little bit. and what you're seeing going on there? And can you just talk a little bit about how important that strategy is as budgets come under more stress and the ability for you all to go deeper with your customers on an industry basis? I was just kind of curious if you can give us an update on that. And then how that strategy maybe plays out in a more choppy macro backdrop? Thank you. Bret Taylor: Thanks Kirk. We have 12 industry clouds spanning a wide range of industries where I think CRM is particularly strategic from financial services to health care, to consumer goods and manufacturing. And you can think of our industry cloud is essentially taking the Customer 360: sales, service, marketing, e-commerce, Tableau, MuleSoft, Slack and building industry-specific processes and workflows that work out of the box. And as you're sort of alluding to, there's a lot of value for our customers. Number one is they don't need to pay us or a professional services firm to implement the table stakes for their digital transformation. It works out of the box. That means they can focus their investment resources in the areas of their business that are differentiated. It means they get faster time to value and it means that these processes are stickier, which is why our industry clouds have lower attrition rates than our line of business cloud. It's been a huge area of growth for us and actually a lot of credit to our Chief Product Officer, David Schmaier, who actually -- his company, which we acquired a couple of years ago, Velocity was actually independent software vendor that built industry solutions on top of our platform and has been a strong advocate for this strategy internally. It's a huge part of our go-forward strategy. If you have an option to buy one of our industry clouds, why wouldn't you? More works out of the box, you'll get faster time to value. So, it's a huge area of investment for us. I think the thing that we do really uniquely though, Marc alluded to it, is it's really all in one integrated platform. If you buy our financial services cloud, you get all the capabilities of our Salesforce Cloud, of our Service Cloud or our customer data platform, all in one integrated technology platform. It's very unique in the industry and I think in this more measured buying environment, it will become even more important, though, actually, it was important prior to this as well. And I think it reflects our alignment with our industry's go-to-market motion and vertical go-to-market motion and really focus on delivering faster time to value to our customers. Kirk Materne: Thank you. Operator: You next -- your last question today comes from the line of Phil Winslow with Credit Suisse. Your line is now open. Phil Winslow: Hey, thanks for taking my question. I wanted to focus in on Slack. Slack again outperformed revenue expectations. Obviously, the large deal metrics are impressive, too. What's driving the continued advance for Slack, let's say, relative to some of those other vendors that are heavier in the telephony or the video segments of UCaaS that have frankly have been delivering weaker results. And are you seeing strong, call it, standalone demand for Slack as a horizontal messaging platform or the Salesforce integrations that you highlighted driving more attach as a collaboration hub of Slack in the context of multi-cloud deployments? Thanks. Bret Taylor: Yes, I'll take that one. This is Bret. We are really happy with the performance of Slack. I think it's interesting, we acquired Slack in the midst of this pandemic and now we're coming out of the pandemic into this new era of flexible work. Office occupancy rates are at historic lows. If you look at the lines of business that we serve like customer service, I've met tens or maybe even hundreds of executive teams whose contact centers are no longer buildings. They're literally just in the cloud now and people are wearing headsets in their kitchens and basements to answer your phone calls. And if you think about what it means to build an employee experience, to build a customer experience in this new area of flexible work, Slack is really at the center of those conversations. And that's why it was such a strategic acquisition for us because one plus one is truly equal to much more than two. When I talked about the innovation we're to deliver at Dreamforce, it's across every single one of our cloud. We've been saying, how do we help our customers whose headquarters is now digital, transition their CRM, transition their employee experience with this new era of flexible work. So, we've seen great wall-to-wall engagements like Mercado Libre, one of the customers I mentioned in my script. But it's also really important that we've invested in integrating Slack with Customer 360, so that when we have a conversation, say with a retailer per variant for Cyber Week, we're coming not just with our Marketing Cloud or in our Commerce Cloud and our Service Cloud, but with a Slack Connect channel that they can use as a command center for Cyber Week. That's key to our go-to-market motion. But -- and I don't think it's at the expense of what you called stand-alone. When we land a deal, say, for a department -- marketing department, Slack has such wonderful organic viral adoption that a year or two later, we're selling to the whole company. And I really think that's key to our go-to-market motion. And Slack is a relevant driver for every single one of the cloud and our Customer 360. Marc Benioff: And I think a lot of the reasons that we bought the company that they really could benefit from our credibility with customers and our distribution capacity have really paid out. It's such a great product. And in June, you probably know that Bret and I did the world tour in New York, many of you were there, but the day before was the Frontiers conference for Slack. And if you haven't looked at the demo, you really should because the product has come a long way since we bought the company. It's an incredible piece of take... Bret Taylor: Voice, video. I mean it's incredible, yes. Marc Benioff: You have to see it to believe it. I mean, don't you agree like it's something that's like really – and for a lot of you are coming to Dreamforce, I think you're going to see how a lot of our products have become Slack first. and also the number of integrations that we're going to be able to kind of bring forth, how many integrations now do you have with these core clouds that you've been able to put together. Bret Taylor: We have 12 integrations with -- and the reason there's so many is because it includes our industry clouds, not just sales, service, marketing and commerce. But Marc, you're going into something remarkable huddles, which is the name of the new audio and video capability Slack introduced, now accounts for 34% of all communication inside of Salesforce. It's completely transformed the way we work, and I'm pretty confident we'll transform all of our customers. Marc Benioff: Integrated Slack with Tableau, which is really cool, right? Because you can do collaborative analytics. Bret Taylor: And with the capabilities we launched to allow you to talk to your data, this is happening inside of Slack. It's just an incredible capability. And as I said, a relevant driver for all of our customer engagements and a wonderful way to, I think, drive and accelerate flag adoption that they would have had independently. Marc Benioff: But a lot of our customers still haven't seen this. And I think that's why I'm so excited about Dreamforce because when you come to Dreamforce, and you see the keynote, obviously, this will be highlighted. And I think customers will see in real time. What we saw, for example, in Frontiers, even we didn't really have the opportunity because the code was so fresh to integrated into our world tour. Keynote, which Bret and I have lamented many times. But I think that when you start to see the incredible innovation that have happened in the Salesforce core clouds like sales, like service, marketing, commerce, even Tableau, you combine that with Slack. You bring that into the Customer 360 with MuleSoft, the single source of truth. The way it's all being integrated with this customer data platform, I don't think anyone else has this vision or is trying to even to execute it. And I've made this kind of L'Oreal told you the L'Oreal story, I said quite a few times, you're going to see that Dreamforce in real time and you can see many other stories because I think for us, just trying to communicate our vision, this is like probably the most exciting thing going on here. We just brought 500 of our top executives together for kind of second half kickoff and showed them what we're so excited about and I don't think anybody walked away not thinking that we've not only got a world-class product that's highly differentiated, but we're really where a lot of our customers are trying to get to in the next level of their customer experience. And Bret's made the point, Amy's made the point, Brian's made the point that digital transformation is underway, but we all know that every digital transformation is beginning and ending with the customer. And you've got to have this beginning. You have to kind of begin with the end of mine when that's all about building this Customer 360, and you're going to see this at scale when we all get to Dreamforce, and I'll look forward to your feedback then. Bret Taylor: Thanks, Phil and we want to thank everyone for joining us today and we look forward to seeing everyone over the next quarter. Operator: This concludes today's conference call. Thank you for attending. 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.