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Although Salesforce raised its earnings forecast for FY24, the revenue prediction remains intact.
Salesforce Inc (NYSE: CRM) surpassed analyst expectations in its fiscal Q1 2024 financial performance, with earnings coming in at $1.69 per share. As earnings were about $0.08 higher than estimates, the software company also reported better-than-expected revenue for the fiscal quarter. Salesforce said it has $8.25 billion in revenue for the fiscal Q1 2024, while analysts predicted $8.18 billion.
Salesforce Records Impressive Figures in Fiscal Q1 2024
According to the quarterly report, the company’s revenue for the quarter grew 11% compared to the previous year. While subscription and support revenues for the quarter were up 11% YoY to $7.64 billion, professional services and other revenue gained 9% year-over-year to $0.61 billion. The President and Chief Financial Officer of Salesforce, Amy Weaver, said the Q1 2024 performance represents another step forward. She said the team worked hard to deliver “another double-digit growth” in the quarter, referring to the previous quarter’s strong results. The CFO commended the quarterly report, noting that the company is committed to increasing its customers’ productivity. Weaver also said the team would continually work towards driving efficiency and becoming AI-first companies.
In addition to the high revenue and earnings per share in fiscal Q1 2024, Salesforce also recorded smooth cash flow. The cash generated from operation during the three months was $4.49 billion. Notably, Salesforce recorded $243 million for capital expenditures in fiscal Q1 2024. This is a growth of about 36% and more than the $205 million analysts’ consensus.
Furthermore, Chair and CEO of Salesforce Marc Benioff noted that the company significantly exceeded its non-GAAP margin target for fiscal Q1 2024. Also, he announced the raising of full-year earnings guidance.
“We are raising our FY24 non-GAAP operating margin guidance to a 550 basis point increase year-over-year. At the same time, we are leading the next major revolution in CRM – infusing trusted, secure generative AI across our entire product portfolio. Salesforce’s generative AI ecosystem wields Einstein GPT, Slack GPT, and Tableau GPT, delivering trusted power across our product portfolio. Our Salesforce GPT Trust Layer will shield customer data, enabling productive automation and intelligent enterprise enhancements securely.”
Salesforce’s Full-Year Guidance on Earnings and Revenue
Although it raised its earnings forecast for FY24, the revenue prediction remains intact. Looking forward, Salesforce expects adjusted EPS for the fiscal year to be between $7.41 and $7.43 billion. Also, the revenue forecast for the same period is between $34.5 billion and $34.7 billion. The company had earlier projected $7.12 to $7.14 for adjusted earnings per share.
While on a conference call with analysts, COO Brian Millham mentioned the delta with closing deals. Hence, the company is working on an automated selling process on the low end of the market, making its sales personnel more productive.