Salesforce beats on earnings but forecasts single-digit revenue growth for the year


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Marc Benioff, co-founder and CEO of Salesforce, speaks on a panel session at the World Economic Forum in Davos, Switzerland, on Jan. 18, 2024.
Stefan Wermuth | Bloomberg | Getty Images

Salesforce shares initially slid as much as 6% but then went up 1% in extended trading Wednesday after the business software maker issued a light revenue forecast for the new fiscal year. It will start paying a dividend at 40 cents per share.

Here's how the company did, compared with estimates from LSEG, formerly known as Refinitiv:

  • Earnings per share: $2.29 adjusted vs. $2.26 expected
  • Revenue: $9.29 billion vs. $9.22 billion expected

Salesforce's revenue grew 10.8% year over year in the quarter, which ended Jan. 31, according to a statement. Professional services revenue declined 9%. The company reported net income of $1.45 billion, or $1.47 per share, compared with a loss of $98 million, or 10 cents per share.

"Over the past two quarters, I'm happy to say we've seen improved bookings growth," Amy Weaver, Salesforce's finance chief, said on a conference call with analysts.

During the quarter, Salesforce said it would acquire sales commission software startup Spiff for undisclosed terms and was starting to sell its products on the Amazon Web Services Marketplace.

Salesforce called for adjusted fiscal first-quarter earnings of $2.37 to $2.39 per share, with $9.12 billion to $9.17 billion in revenue. Analysts polled by LSEG had been expecting $2.20 in adjusted earnings per share on $9.15 billion in revenue.

For the new 2025 fiscal year, Salesforce said it sees adjusted earnings of $9.68 to $9.76 per share and $37.7 billion to $38.0 billion in revenue. The revenue figure implies 8.6% growth at the middle of the range. Analysts had expected $9.57 per share, along with $38.62 billion in revenue.

The full-year guidance takes into consideration foreign-exchange pressure and continued weakness in professional services, Weaver said. Plus, it reflects a more measured buying environment, which first appeared in the 2023 fiscal year, she said.

While demand for artificial intelligence products is heavy, the guidance doesn't factor in much effect from that category, said Brian Millham, Salesforce's president and chief operating officer. A price increase announced last year won't be a major factor either, Millham said.

Adoption of AI internally should contribute to margin expansion over time, he said.

Excluding the after-hours move, Salesforce shares have risen about 14% so far this year, while the S&P 500 index has gained 6% during the same period.

Salesforce's dividend is payable as of April 11 to shareholders at the close of business on March 14.

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