Salesforce Q4 Results: EPS Beat, Revenue Misses Expectations

Salesforce posts mixed Q4 results with EPS beating forecasts but revenue falling short. The outlook remains uncertain, putting pressure on CRM stock.

Date: 03-03-2025

AI Rating: 5

Salesforce Q4 Performance

The report indicates that Salesforce (NYSE: CRM) released its Q4 fiscal 2025 results, showing sales of $9.99 billion. Although the earnings per share (EPS) of $2.78 exceeded consensus estimates of $2.61, the revenue was below projections of $10.04 billion. This duality in results may influence investor perception and subsequent stock performance.

Key Metrics for Evaluation:

- **Earnings Per Share (EPS)**: The EPS surged by 21% year-over-year, reaching $2.78. This positive growth might attract investors looking for profitability.

- **Revenue Growth**: Salesforce reported a 7.6% year-over-year revenue increase, though it fell slightly short of market expectations. This discrepancy could dampen investor confidence.

- **Net Income**: While net income was not directly provided, the adjusted EPS increase does imply a favorable shift in profitability, contingent on overall revenue performance.

- **Profit Margins**: The company experienced an increase in adjusted operating margin by 170 basis points year-over-year, reaching 33.1%. This margin improvement can be seen as a positive factor for the company's efficiency and profitability.

- **Guidance**: The forward-looking guidance provided by Salesforce did not meet market expectations, which is a concern that may lead to a decline in stock prices. Projected revenues for the coming quarter fall below consensus estimates, indicating potential struggles ahead.

Market Performance and Sentiment:

The stock has underperformed the S&P 500, with 17% returns since the start of 2024 compared to 28% for the index. This underperformance, alongside a more volatile return history, suggests a cautious sentiment around CRM stock. Concerns about the slow adoption of its AI platform and external macroeconomic conditions could also weigh heavily on investor sentiment.

The analysis suggests that while there are favorable developments, such as improving profitability and a solid EPS performance, the lack of revenue growth combined with a disappointing outlook will likely lead to a negative trend for CRM stock in the near term.

Stocks: CRM