Shares of Salesforce Inc
Here are some key analyst takeaways.
Goldman Sachs analyst Kash Rangan maintained a Buy rating, while lifting the price target from $315 to $325.
- Salesforce's quarterly results came as a "relief for investors," as they affirmed a "stabilizing demand environment" and the reiteration of the full-year revenue guidance de-risks the back half, Rangan said.
- The number of paid Data Cloud customers grew 130%, the company signed 1,500 AI deals, and bookings for AI products more than doubled sequentially, the analyst stated. "We continue to see Salesforce as an under-appreciated AI winner as its differentiated data and early success in creating/deploying Gen-AI agents can solidify Salesforce's first mover advantage in enterprise-grade Gen-AI applications."
- Contrary to the previous quarter, Salesforce delivered stronger bookings and cRPO (current remaining performance obligation) figures, "driven by improved sales execution and early renewal favorability," Lane said. Agentforce, Einstein-powered genAI agents across Salesforce's product portfolio, was "front-and-center on the call," he added.
- The company continued to witness strong trends in Data Cloud, the analyst stated. "We continue to believe Salesforce is well-positioned to be a leader in delivering genAI solutions to enterprises, and are pleased with the company's progress from a profitability standpoint," he further wrote.
- Salesforce generated total revenues of $9.33 billion, beating consensus of $9.23 billion, "driven by resilient core product demand, strong data cloud growth, and license revenue outperformance," Luria wrote in a note. The company drive "profitable growth at scale," he added.
- Strong multi-cloud adoption trends accounted for 80% of new business in the quarter, and industry cloud momentum. Management guided to fiscal 2025 total revenue between $37.7 billion and $38.0 billion, "which includes a $100 million FX headwind and implies 8%-9% Y/Y growth."
- Salesforce's cRPO growth in constant currency terms came at 11% year-on-year, which was "modestly better than we were thinking," Bachman said. Management guided to about 8.5% year-on-year cRPO growth for the October quarter, he added.
- "In 2HFY25, we note CRM faces difficult compares in the license business in both MuleSoft and Tableau," the analyst wrote. While the Integration & Analytics business could continue to decline, Sales Cloud and Service Cloud "can remain solid, at high single-digits, in part helped by industry cloud growth," he further stated.
- Salesforce's results were "better-than-feared," and management commentary reaffirmed that the buying environment could remain challenging, Bracelin said. The results were highlighted by 9% ex-FX growth, a rebound in cRPO growth to 11%, and additional margin expansion to 33.7%.
- The second-half outlook of approximately 8% implies further moderation impacted by two years of measured spending; "several industry constraints flagged in the largest Americas region (66% of sales) where growth slowed to 7.5% y/y from 10.7% last quarter," the analyst wrote. He further expressed concern around the macro uncertainty, the departure of Salesforce's CFO at year end, and the "pending multi-year model transition from applications to agents."
- Salesforce delivered a beat on revenues, profits and cRPO growth, "despite persistent tough macro," Tillman said.
- "Salesforce executed well on its strategic growth pillars and saw momentum in multi-cloud deals, international expansion, Industry Solutions performance, and sustained traction with Data Cloud and AI solutions," the analyst wrote. Agentforce is expected to be an "important new growth catalyst."
- Salesforce's growth had strengthened in the fourth quarter of fiscal 2024, but reverted to weakness in the first quarter of fiscal 2025, and "while 2QF25 had modest upside, the guide for a flat sequential 3QF25 again reverts to weakness," Baldry said.
- "With 3QF25 guided soft, but F25 maintained, 4QF25 results signal an acceleration that appears risky," the analyst wrote. Despite the challenges, AI-based technologies are expected to "spark a growth rebound over the intermediate-term."
- Salesforce reported a "decent quarter overall" and announced the planned departure of CFO Amy Weaver, Jaluria said.
- While the second-quarter results show "solid upside" with cRPO growth accelerating to 11%, the company reiterated its full-year guidance for total and subscription revenue growth, the analyst stated. The third-quarter cRPO implies a decelerated of around 200 bps, the full-year operating margin guidance shows an expansion of only 30 bps, he added.
