Salesforce Reports Record Q1 Revenue and Raises FY 2027 Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 56 minutes ago
0mins
Source: seekingalpha
- Record Revenue: Salesforce achieved a record revenue of $11.13 billion in Q1, reflecting strong market performance and an increase in non-GAAP operating margin to 34.8%, indicating enhanced profitability and operational efficiency.
- Surge in Large Deals: The company secured 98 new annual contracts exceeding $1 million in Q1, including a significant $72 million enterprise license agreement with the U.S. Air Force, highlighting robust demand in the large customer segment.
- Stock Buyback Initiative: Salesforce initiated a $25 billion accelerated share repurchase program, expected to reduce the diluted share count by 10% year-over-year, which not only enhances shareholder value but also demonstrates confidence in future cash flows.
- Optimistic Outlook: The company raised the midpoint of its FY 2027 revenue guidance to $45.9 billion to $46.2 billion and projected Q2 revenue between $11.27 billion and $11.35 billion, reflecting sustained market demand and growth potential.
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Analyst Views on CRM
Wall Street analysts forecast CRM stock price to rise
39 Analyst Rating
29 Buy
9 Hold
1 Sell
Moderate Buy
Current: 179.080
Low
223.00
Averages
326.40
High
405.00
Current: 179.080
Low
223.00
Averages
326.40
High
405.00
About CRM
Salesforce, Inc. is a customer relationship management (CRM) technology company. Its artificial intelligence (AI) powered Agentforce 360 Platform offers sales, service, marketing, commerce, collaboration, data management, integration, analytics, and information technology (IT) service solutions. It enables customers to build and deploy digital labor for employees and customers, leveraging autonomous AI agents across business functions. Its service offerings include Agentforce Sales, Agentforce Service, Agentforce 360 Platform, Slack and Others. The Agentforce Sales provides sales capabilities and tools built for organizations across prospecting, sales engagement, team collaboration, sales analytics and AI, sales programs, sales performance, partner management, and revenue and orders. The Agentforce Service provides field service solutions that enable companies to connect service agents, dispatchers and mobile employees through platform to schedule, dispatch and manage jobs.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Salesforce Reports Strong Q1 Results with Record Revenue and Growth
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- Revenue Growth: Total revenue for Q1 hit $11.13 billion, a 13% increase year-over-year, with subscription and support revenue at $10.69 billion, up 14%, reflecting robust customer demand and market share expansion.
- Robust Cash Flow: The company reported operating cash flow of $6.7 billion, up 3% year-over-year, and free cash flow of $6.6 billion, up 4%, providing a solid foundation for future investments and shareholder returns.
- Shareholder Returns: Salesforce returned $27.1 billion to shareholders through stock buybacks and paid $365 million in dividends, demonstrating a strong commitment to shareholder value alongside its impressive cash flow and profitability.
See More
Salesforce Reports Record Q1 Revenue and Raises FY 2027 Guidance
- Record Revenue: Salesforce achieved a record revenue of $11.13 billion in Q1, reflecting strong market performance and an increase in non-GAAP operating margin to 34.8%, indicating enhanced profitability and operational efficiency.
- Surge in Large Deals: The company secured 98 new annual contracts exceeding $1 million in Q1, including a significant $72 million enterprise license agreement with the U.S. Air Force, highlighting robust demand in the large customer segment.
- Stock Buyback Initiative: Salesforce initiated a $25 billion accelerated share repurchase program, expected to reduce the diluted share count by 10% year-over-year, which not only enhances shareholder value but also demonstrates confidence in future cash flows.
- Optimistic Outlook: The company raised the midpoint of its FY 2027 revenue guidance to $45.9 billion to $46.2 billion and projected Q2 revenue between $11.27 billion and $11.35 billion, reflecting sustained market demand and growth potential.
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- Share Buyback Program: Salesforce is executing a share buyback program despite its stock being down 37% from last November's high, aiming to bolster shareholder confidence and stabilize its stock price amidst market fluctuations.
- Snowflake's Strong Growth: Snowflake's quarterly earnings led to a 36% increase in its stock during after-hours trading, with CEO Sridhar Ramaswamy emphasizing that product innovation will drive the enterprise AI revolution, showcasing the company's competitive edge in the industry.
- Upcoming Market Data: Key economic data set to be released includes weekly jobless claims and GDP revisions, with the consensus estimate for initial jobless claims at 213,000, indicating signs of economic recovery that could influence investor sentiment.
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Salesforce Reports Strong Earnings but Stock Declines Amid AI Concerns
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Salesforce Reports Strong Q1 Results with Record Revenue and Growth
- Strong Performance: Salesforce's Q1 GAAP EPS reached $2.42, up 52% year-over-year, while non-GAAP EPS was $3.88, up 50%, indicating a significant enhancement in profitability that reinforces its market leadership.
- Revenue Growth: Total revenue for Q1 hit $11.13 billion, a 13% increase year-over-year, with subscription and support revenue at $10.69 billion, up 14%, reflecting robust customer demand and market share expansion.
- Robust Cash Flow: The company reported operating cash flow of $6.7 billion, up 3% year-over-year, and free cash flow of $6.6 billion, up 4%, providing a solid foundation for future investments and shareholder returns.
- Shareholder Returns: Salesforce returned $27.1 billion to shareholders through stock buybacks and paid $365 million in dividends, demonstrating a strong commitment to shareholder value alongside its impressive cash flow and profitability.
See More
Salesforce Reports Record Q1 Revenue and Raises FY 2027 Guidance
- Record Revenue: Salesforce achieved a record revenue of $11.13 billion in Q1, reflecting strong market performance and an increase in non-GAAP operating margin to 34.8%, indicating enhanced profitability and operational efficiency.
- Surge in Large Deals: The company secured 98 new annual contracts exceeding $1 million in Q1, including a significant $72 million enterprise license agreement with the U.S. Air Force, highlighting robust demand in the large customer segment.
- Stock Buyback Initiative: Salesforce initiated a $25 billion accelerated share repurchase program, expected to reduce the diluted share count by 10% year-over-year, which not only enhances shareholder value but also demonstrates confidence in future cash flows.
- Optimistic Outlook: The company raised the midpoint of its FY 2027 revenue guidance to $45.9 billion to $46.2 billion and projected Q2 revenue between $11.27 billion and $11.35 billion, reflecting sustained market demand and growth potential.
See More
U.S.-Iran Negotiation Fluctuations Impact Markets
- Oil Price Plunge: Oil prices dropped over 5% on Wednesday after Secretary of State Marco Rubio indicated that Washington was giving Iran talks 'every chance to succeed,' reflecting market sensitivity to diplomatic efforts and potentially impacting energy sector profitability.
- Escalation of Military Actions: New U.S. airstrikes in Iran targeted a military site deemed a threat to U.S. forces and commercial maritime traffic, adding uncertainty to the ongoing diplomatic negotiations and prompting investors to reassess risk levels in the market.
- Strong Tech Stock Performance: Shares of cloud-based AI and data platform company Snowflake surged 36% following a strong earnings report and a $6 billion investment plan in Amazon Web Services, showcasing investment enthusiasm and market confidence in the tech sector amid rising AI demand.
- Inflation Data Focus: Investors are closely watching the upcoming April inflation reading, which is expected to influence the Fed's future rate decisions, as Minneapolis Fed President Neel Kashkari emphasized that lowering inflation remains a top priority, indicating market sensitivity to economic policy.
See More
Salesforce Beats Earnings Estimates but Guidance Disappoints
- Earnings Performance: Salesforce reported earnings that exceeded expectations, with CEO Marc Benioff projecting over $46 billion in revenue for the year, although his interpretation of guidance diverges from investor sentiment, indicating the company's strong market position.
- Share Buyback Program: Salesforce is executing a share buyback program despite its stock being down 37% from last November's high, aiming to bolster shareholder confidence and stabilize its stock price amidst market fluctuations.
- Snowflake's Strong Growth: Snowflake's quarterly earnings led to a 36% increase in its stock during after-hours trading, with CEO Sridhar Ramaswamy emphasizing that product innovation will drive the enterprise AI revolution, showcasing the company's competitive edge in the industry.
- Upcoming Market Data: Key economic data set to be released includes weekly jobless claims and GDP revisions, with the consensus estimate for initial jobless claims at 213,000, indicating signs of economic recovery that could influence investor sentiment.
See More
Major Indexes Rise as Oil Prices Plunge
- Oil Price Drop: Oil prices have significantly declined due to weak global demand, with WTI crude falling below $70 per barrel, which could lower transportation and production costs, positively impacting the overall economy.
- Amazon Buy Signal: Amazon's stock has flashed a buy signal, with analysts predicting strong future growth potential, likely attracting more investor interest and further driving its stock price upward.
- Snowflake Surge: Snowflake experienced a strong rebound in after-hours trading, with its stock price rising, reflecting market optimism regarding its financial performance and future outlook, potentially drawing more institutional investor attention.
- Overall Market Performance: Amid the drop in oil prices, major indexes have generally risen, indicating increased investor confidence in economic recovery, which may promote further capital inflows into the stock market.
See More
Salesforce Reports Strong Earnings but Stock Declines Amid AI Concerns
- Strong Earnings Report: Salesforce's quarterly revenue reached $11.13 billion, a 13.3% year-over-year increase, surpassing market expectations of $11.05 billion, while adjusted earnings per share of $3.87 exceeded estimates by 76 cents, demonstrating the company's resilience in revenue growth.
- AI Platform Performance: The newly launched AI platform, Agentforce, closed 98 deals in the quarter, with an annual recurring revenue (ARR) of $1.2 billion, reflecting a remarkable 205% year-over-year growth, indicating rapid development and market acceptance in the AI sector.
- Stock Volatility: Despite the strong earnings, Salesforce's stock dipped 1% in after-hours trading and has fallen about 33% year-to-date, reflecting investor concerns over AI potentially replacing traditional software, leading to diminished confidence in the stock.
- Cautious Future Outlook: Management expects second-quarter revenue for fiscal 2027 to range between $11.27 billion and $11.35 billion, and while adjusted EPS guidance has been raised, the overall financial outlook remains below market consensus, highlighting challenges in accelerating growth.
See More
