• Revenue: $9.44 billion, up 8% year over year.

• Subscription and Support Revenue: Grew 9% year over year.

• Non-GAAP Operating Margin: 33.1%, up 190 basis points year over year.

• GAAP Operating Margin: 20% for the first time in company history.

• Non-GAAP EPS: $2.41, inclusive of a $0.18 charge from strategic investment adjustments.

• Operating Cash Flow: $2 billion, up 29% year over year.

• Free Cash Flow: $1.8 billion, up 30% year over year.

• Remaining Performance Obligation (RPO): $53.1 billion, up 10% year over year.

• Current RPO (CRPO): $26.4 billion, up slightly more than 10% year over year.

• Share Repurchases and Dividends: $1.6 billion returned to shareholders in Q3.

• Fiscal Year 2025 Revenue Guidance: $37.8 billion to $38 billion, growth of approximately 8% to 9% year over year.

• Fiscal Year 2025 Non-GAAP Operating Margin Guidance: 32.9%, a 240 basis point improvement year over year.

• Fiscal Year 2025 Operating Cash Flow Growth: Approximately 24% to 26%.

• Q4 Revenue Guidance: $9.9 billion to $10.1 billion, up 7% to 9% year over year.

• Q4 Non-GAAP EPS Guidance: $2.57 to $2.62.

• Warning! GuruFocus has detected 5 Warning Sign with CRM.

Release Date: December 03, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Salesforce Inc (NYSE:CRM) reported strong financial performance with Q3 revenue of $9.44 billion, up 8% year over year.

• The company achieved a non-GAAP operating margin of 33.1%, marking a 190 basis point improvement year over year.

• Agentforce, Salesforce's new AI-driven platform, closed over 200 deals in just one week, indicating strong market demand.

• Salesforce's Data Cloud was included in 8 of the top 10 deals in the quarter, showcasing its importance in AI transformations.

• The company is expanding its workforce by hiring 1,400 account executives globally to meet the increased demand for Agentforce.

Negative Points

• Despite strong performance, Salesforce Inc (NYSE:CRM) faces challenges with constrained growth in the United States and parts of EMEA.

• The company anticipates a deceleration in license revenue growth for MuleSoft and Tableau due to tough prior-year comparisons.

• Agentforce, while promising, is still in the early adoption phase and not yet a material contributor to CRPO.

• Salesforce's professional services business is expected to be a headwind to revenue growth.

• The company is experiencing a slightly above 8% revenue attrition rate, consistent with recent quarters.

Q & A Highlights

Q: On Agentforce, can you discuss the halo effect across product lines and the role of Data Cloud? A: Marc Benioff, CEO, highlighted that top customers are integrating multiple Salesforce products, including Sales, Service, Marketing, Analytics, Data Cloud, and Slack, into a comprehensive agent-first platform. This integration is unique to Salesforce, offering a complete suite that enhances customer interactions and operational efficiency.