Salesforce Inc. (NYSE:CRM) on Wednesday reported fourth-quarter results that beat expectations. However, the earnings outlook for FY2025 was also weak.
Q4 Highlights
The business software maker reported revenue of $9.29 billion for the quarter ended Jan. 31, up nearly 11% from a year earlier, beating LSEG's estimate of $9.22 billion.
Although professional services revenue fell 9%, Salesforce began selling products on e-commerce and cloud giant Amazon.com Inc's (NASDAQ: AMZN) cloud marketplace during the quarter. The expanding strategic partnership between Amazon, the world's leading cloud provider, and Salesforce, the world's leading CRM platform, promises to unleash the power of connected cloud and AI technologies. The partnership between Amazon and Salesforce will undoubtedly help users around the world bring the latest generative artificial intelligence technologies into their workflows. Availability on the Amazon Web Services Marketplace gives Salesforce a major new channel as it continues to move towards a more profitable operating model, including lower cost of goods sold . It will be interesting to see how this partnership with Amazon continues to evolve.
For the quarter, Salesforce returned to the black, reporting net income of $1.45 billion, or $1.47 per share, and adjusted earnings of $2.29 per share, beating LSEG's estimate of $2.26. . During last year's comparable quarter, Salesforce posted a net loss of $98 million, or 10 cents per share.
However, Amy Weaver noted that Salesforce has seen improvement in booking growth over the past two quarters.
Outlook for the first quarter of the fiscal year
Salesforce expects revenue for the quarter to be in the range of $9.12 billion to $9.17 billion and adjusted earnings in the range of $2.37 to $2.39 per share.
Outlook for fiscal 2025
Salesforce expected revenue in the range of $37.7 billion to $38 billion and adjusted earnings in the range of $9.68 to $9.76 per share. Wall Street expected revenue guidance to be slightly higher at $38.62 billion, beating forecasts for adjusted earnings of $9.57 per share. Salesforce justified being more cautious about its revenue outlook given currency pressures, continued weakness in professional services, and a more cautious purchasing environment that continues into fiscal 2023 and beyond.
However, this guidance does not include the effects of AI products, which are enjoying strong demand, and internal AI adoption is expected to contribute to margin growth over the long term.
Salesforce hasn't put AI in a corner.
Just because AI investments haven't yet boosted Salesforce's finances doesn't mean AI is in trouble. However, investments in AI will take time to bear fruit. Earlier this week, Salesforce announced Einstein Copilot and also teased more AI innovations to come in the near future as the AI revolution is underway, evolving at an incredible pace, and impacting everyone and everything. Did.
Disclaimer: This content is for informational purposes only. It is not intended as investment advice.
This article was provided by an unpaid external contributor. This does not represent Benzinga's reporting and has not been edited for content or accuracy.
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