Salesforce, Inc.
CEO : Mr. Marc R. Benioff
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2025 Q3 | 8.3% YoY | 26.1% | -344.4% | 2024-08-28 |
Marc Benioff says,
Financial Performance and Guidance
- Q2 Revenue: $9.33 billion, an 8% increase year-over-year, and 9% in constant currency.
- Subscription and Support revenue grew 9% year-over-year and 10% in constant currency.
- Non-GAAP operating margin increased to 33.7%, up 210 basis points year-over-year.
- Cash flow for the quarter was $892 million, marking a 10% increase year-over-year.
- Guidance for fiscal year ’25: Revenue expected to be between $37.7 billion and $38 billion, growing 8% to 9% year-over-year, with a raised non-GAAP operating margin to 32.8%.
Agentforce and AI Innovation
- Introduction of Agentforce, a foundational product for future Salesforce growth and a reflection of Salesforce’s decade of AI leadership.
- This platform will enable autonomous AI-driven enterprise operations across sales, service, and other business functions, enhancing productivity and operational efficiency.
- Agentforce is expected to radically enhance Salesforce’s product offerings, targeting 90% resolution rates for customer and employee inquiries with high accuracy.
- Key early adopters include OpenTable, Wiley, ADP, and RBC, showcasing significant improvements in customer satisfaction and operational efficiency.
Strategic Market Positioning
- Salesforce perceives itself as the second-largest enterprise software company, surpassing Oracle in Japan, due to its focus on software without infrastructure or hardware.
- 80% of new business in the quarter came from multi-cloud deals, highlighting Salesforce’s comprehensive strategy for integrated cloud solutions.
- Committed to maintaining its number one CRM position and solidifying its standing as the top AI CRM provider.
Data Cloud Expansion
- Data Cloud continues to be Salesforce’s fastest-growing organic product, contributing significantly to AI capabilities like Agentforce.
- In Q2, Data Cloud processed 2.3 quadrillion records, with 110% platform consumption growth year-over-year.
- Number of paid Data Cloud customers grew by 130% year-over-year, with customers spending more than $1 million annually having doubled.
Executive Leadership and Future Outlook
- Amy Weaver, current CFO, will step down at the end of the fiscal year, transitioning to support the onboarding of a new CFO.
- Salesforce has initiated a comprehensive search for a new CFO with Heidrick & Struggles, aiming to continue its financial transformation.
- The leadership transition is expected to support Salesforce’s strategic goals and continued platform growth.
Brian Millham says,
Core Growth Pillars and AI Innovations
- Multi-cloud deals and international expansion are driving strong momentum.
- Agentforce platform to be generally available in October and has received positive feedback from pilot customers.
- AI product bookings more than doubled quarter-over-quarter with 1,500 new AI deals signed in Q2.
- Notable brands such as Bombardier and CMA CGM are utilizing AI solutions to enhance sales and customer interactions.
Data and AI Product Developments
- Einstein AI is supporting 35,000 employees, enhancing productivity and deal closure rates.
- Slack AI summarized 420 million messages in the quarter, saving nearly 3 million hours of work.
- Data Cloud is instrumental for companies like American Family Insurance and the Adecco Group in creating a unified customer view.
- Nearly 80% of new business was driven by multi-cloud deals, with strong adoption across various Salesforce platforms.
International and Industry-Specific Achievements
- Five of the top 10 deals were international, with significant traction in Japan, India, and Canada.
- More than half of the top 100 deals included industry-specific cloud solutions.
- Launch of the AI tool kit at Dreamforce, featuring 100+ customizable AI actions for industry-specific applications.
Partnerships and Ecosystem Growth
- Salesforce’s go-to-market channel diversification strategy is gaining traction.
- Three of the top 10 deals closed through the AWS marketplace.
- Workday announced as the first Agentforce partner, marking the beginning of building an Agentforce ecosystem.
Conclusion and Forward Outlook
- Salesforce is effectively transitioning into an AI enterprise, enhancing its relevance to customers.
- Dreamforce event will showcase new CRM advancements, emphasizing human-agent collaboration.
- The continued focus on innovation and strategic partnerships positions Salesforce for sustained growth.
Q & A sessions,
Leadership Transitions and Board Changes
- Amy has transitioned from General Counsel to CFO, with Sabastian now taking over as General Counsel.
- The company is in the process of appointing a new CFO, with high expectations for the new appointment.
- **The company experienced the loss of two significant Board members, Sandy and Susan, which has deeply affected the organization.**
- Condolences have been extended to the families of the deceased, recognizing their immense contributions.
Growth Strategies and International Expansion
- The focus remains on selling applications, Data Cloud, and agents across core platforms and verticals.
- **International regions, especially in Asia, are experiencing double-digit growth, significantly contributing to overall expansion.**
- Salesforce aims to leverage a transformed technology stack, verticalization, and international growth as core growth pillars.
Agentforce and Consumption-Based Pricing Model
- Salesforce aims to deploy a billion agents by the end of fiscal year ’26 with a current trial base of 200 million consumers.
- Pricing for agents will be on a consumption basis, approximately $2 per conversation, presenting high-margin opportunities.
- Agentforce has shown promising results in trials, resolving over 90% of patient inquiries, indicating a strong potential for future growth.
| Product | Current Consumer Base | Pricing Model | Target by FY ’26 |
|---|---|---|---|
| Agentforce | 200 million | $2 per conversation | 1 billion agents |
Technological Innovations and Platform Integration
- Salesforce is focusing on integrating applications, data, and agents into a single AI-driven platform.
- Recent acquisitions, such as ExactTarget, Demandware, and Tableau, are being integrated to enhance AI capabilities.
- **This integrated approach aims to provide a cost-effective, scalable solution for customers from small to large enterprises.**
Market Opportunities and Challenges
- The Americas remain the largest market, not perceived as saturated, but affected by a measured buying environment.
- Salesforce sees significant opportunities through multi-cloud deals and AWS Marketplace, with three of their top 10 deals transacted there.
- Managing attrition aggressively and driving more feature usage and adoption are pivotal growth strategies moving forward.
- **The company is optimistic about returning to double-digit growth in the Americas with the new innovations and customer satisfaction.**
No bad stock 