CRM Q1 2025 Earnings

Call Details

• Call Title: Salesforce, Inc. Q1 2025 Earnings Call
• Date: May 29, 2024 at 9:00 PM UTC
• Management Team:
  • Marc Benioff (Chair and CEO)
  • Amy Weaver (President and Chief Financial Officer)
  • Brian Millham (President and Chief Operating Officer)
  • Mike Spencer (EVP of Finance and Strategy and Investor Relations)
  • Evan Goldstein (Senior Vice President of Investor Relations)

Call Summary

Financial Performance

• Q1 revenue was $9.13B, up 11% year-over-year in nominal and constant currency.
• Subscription and support revenue grew 12% year-over-year in nominal terms and 13% in constant currency.
• Q1 non-GAAP operating margin was 32.1%, which represents a 450 basis point improvement year over year.
• Q1 operating cash flow was $6.25B, up 39% year-over-year, and Q1 free cash flow was $6.1B, up 43% year-over-year.
• Remaining performance obligation (RPO) ended Q1 at $53.9B, up 15% year-over-year.
• Current remaining performance obligation (CRPO) ended Q1 at $26.4B, up 10% year-over-year nominal, with a $200M FX headwind translating to >10% growth in constant currency.
• Revenue result was at the lower end of guided range due to pressures on professional services, licensed revenue timing, and measured buying behavior.
• Company retained its number-one CRM market share ranking per IDC and reported managing more than 250 petabytes of customer data and metadata.

Guidance

• Full fiscal year 2025 revenue guidance was maintained at $37.7B to $38.0B, implying growth of 8% to 9% year-over-year.
• Full-year subscription and support revenue growth is now expected to be approximately 10% year-over-year in constant currency.
• Full-year fiscal 2025 non-GAAP operating margin is expected to be 32.5%, representing a 200 basis point improvement year over year.
• Full-year fiscal 2025 GAAP operating margin is expected to be approximately 20%, representing 550 basis points of improvement year over year.
• Fiscal 2025 GAAP diluted EPS guidance is $6.04 to $6.12, and non-GAAP diluted EPS guidance is $9.86 to $9.94.
• Fiscal 2025 operating cash flow growth is expected to be approximately 21% to 24% inclusive of cash tax timing, with free cash flow growth of approximately 23% to 26% and CapEx slightly below 2% of revenue.
• Q2 revenue is guided to $9.2B to $9.25B, up 7% to 8% year-over-year in nominal terms and approximately 8% in constant currency.
• Q2 GAAP EPS is guided to $1.31 to $1.33 and Q2 non-GAAP EPS is guided to $2.34 to $2.36.