Salesforce CRM reported fourth-quarter fiscal 2025 non-GAAP earnings of $2.78 per share, which beat the Zacks Consensus Estimate by 6.9%. The bottom line increased from the year-ago quarter’s earnings of $2.29 per share by 21.4%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
CRM’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing the same on one occasion, with an average surprise being 4.4%.
Salesforce’s fiscal fourth-quarter revenues of $9.99 billion missed the consensus mark by 0.3%.
CRM’s top line rose 7.5% year over year, demonstrating the benefits of CRM’s go-to-market strategy and sustained focus on customer success. The initiatives to integrate generative artificial intelligence (AI) into its offerings also boosted demand for Salesforce’s solutions during the reported quarter.
Due to its mixed performance shares of the company declined 5.5% during Wednesday’s extended trading session. The company’s weak outlook for both the fiscal first quarter and 2026 is unlikely to boost the stock price. Salesforce’s shares have gained 2.6% in the past year compared with the Zacks Computer – Software industry’s growth of 18.3%.
Salesforce Inc. Price, Consensus and EPS Surprise
Salesforce Inc. price-consensus-eps-surprise-chart | Salesforce Inc. Quote
Salesforce Q4 Performance in Details
Coming to CRM’s business segments, revenues from Subscription and Support (94.6% of total revenues) increased 8% year over year to $9.45 billion. Professional Services and Other (5.4% of total sales) revenues increased 0.6% to $542 million. Our estimates for Subscription and Support, and Professional Services and Other segments’ revenues were pegged at $9.5 billion and $513 million, respectively.
Under the Subscription and Support segment, Sales Cloud revenues grew 9% year over year to $2.13 billion. Revenues from Service Cloud also improved 9% to $2.33 billion. Marketing & Commerce Cloud revenues increased 8% to $1.36 billion. Platform & Other revenues were up 12% to $1.92 billion. The company has renamed the Data sub-segment to the Integration and Analytics division. Revenues from the Integration and Analytics division increased 6% year over year to $1.72 billion.
Our estimates for Sales, Service, Market & Commerce, Platform & Other and Integration & Analytics services revenues were pegged at $2.15 billion, $2.31 billion, $1.36 billion, $1.89 billion and $1.77 billion, respectively.
Revenues from America (66.6% of total revenues) grew 8% year over year to $6.66 billion. Sales in the EMEA (23.4%) increased 7% to $2.33 billion, while the Asia Pacific (10%) region’s revenues rose 14% to $999 million.
Non-GAAP operating income of $3.30 billion was up 13.1% from the year-ago quarter’s $2.92 billion. Moreover, the non-GAAP operating margin expanded 170 bps to 33.1% due to benefits from cost restructuring initiatives, including the trimming of the workforce and a reduction in office spaces.
Salesforce’s Balance Sheet & Other Details
Salesforce exited the fiscal fourth quarter with cash, cash equivalents and marketable securities of $14 billion, up from $12.76 billion at the end of the fourth quarter. CRM generated an operating cash flow of $3.97 billion and a free cash flow of $3.81 billion in the fourth quarter. In fiscal 2025, it generated operating cash flow and free cash flow of $13.1 billion and $12.4 billion, respectively.
As of Jan. 31, the current remaining performance obligation reflecting revenues under contract for the next 12 months was $30.2 billion, up 9% on a year-over-year basis. The company bought back shares worth $76 million and paid $383 million in dividends during the fourth quarter. In fiscal 2025, it bought back shares worth $7.8 billion and paid $1.5 billion in dividend payments.
Salesforce’s Guidance for Q1 & FY26
Salesforce provided guidance for the first quarter of fiscal 2026. It projects total sales between $9.71 billion and $9.76 billion for the aforementioned quarter, which indicates 6-7% growth from the year-ago level. The Zacks Consensus Estimate for revenues is currently pegged at $10.02 billion.
The company expects a $50 million impact on first-quarter revenues from foreign currency exchange rates. Furthermore, CRM anticipates non-GAAP earnings per share in the band of $2.53-$2.55 for the first quarter of fiscal 2026. The consensus mark for first-quarter earnings is currently pegged at $2.60.
For fiscal 2026, Salesforce expects revenues in the range of $40.5-$40.9 billion. The consensus mark for fiscal 2026 revenues is pegged at $41.27 billion. It anticipates foreign currency exchange rates to negatively impact its fiscal 2025 revenues by $150 million. It anticipates Subscription and Support revenues to increase approximately by 8.5% on a year-over-year basis and approximately 9% on a constant currency basis.
Salesforce expects fiscal 2026 non-GAAP earnings per share in the range of $11.09-$11.17. The consensus mark for the bottom line currently stands at $11.15 per share. Non-GAAP operating margin is projected to be approximately 34%. CRM also anticipates the operating cash flow growth rate to be 11%.
Zacks Rank and Stocks to Consider
Currently, CRM carries a Zacks Rank #3 (Hold).
Celestica CLS, Arista Networks ANET and Pitney Bowes PBI are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. While CLS and PBI presently sport a Zacks Rank #1 (Strong Buy) each, ANET carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for CLS’ 2025 earnings has been revised 31 cents upward to $5.67 per share over the past 30 days, indicating a 6.78% year-over-year increase. CLS shares have risen 251.2% in the past year.
The consensus mark for ANET’s 2025 earnings has been revised upward by a penny to $2.42 per share over the past 60 days, indicating a 6.6% year-over-year increase. ANET shares have gained 60.2% in the past year.
The consensus mark for PBI’s 2025 earnings has been revised nine cents downward to $1.21 per share over the past seven days, indicating a 47.6% year-over-year decline. PBI shares have gained 172.8% in the past year.
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