Salesforce Stock Dives On Q1 Earnings: Revenue Miss, EPS Beat, Weak Guidance And More

Salesforce Inc CRM reported financial results for the first quarter after the market close on Wednesday. Here’s a rundown of the report.

Q1 Earnings: Salesforce reported first-quarter revenue of $9.13 billion, missing the consensus estimate of $9.147 billion. First-quarter revenue was up 11% on a year-over-year basis.

Salesforce has a strong track record of beating analyst estimates. The first-quarter miss is Salesforce’s first top-line miss in more than a decade, according to Benzinga Pro.

The enterprise cloud solutions company reported quarterly adjusted earnings of $2.44 per share, beating analyst estimates of $2.38 per share.

Operating margin came in at 18.7%, and non-GAAP operating margin was 32.1%. Cash flow from operations was up 39% year-over-year to $6.25 billion, and free cash flow was up 43% to $6.08 billion. The company ended the quarter with remaining performance obligations of $26.4 billion, up 10% year-over-year.

“We are at the beginning of a massive opportunity for our customers to connect with their customers in a whole new way with AI. As the world’s #1 AI CRM, we’re incredibly well positioned to help companies realize the promise of AI over the next decade,” said Marc Benioff, chair and CEO of Salesforce.

Outlook: Salesforce sees second-quarter revenue in the range of $9.2 billion to $9.25 billion versus estimates of $9.34 billion. The company anticipates second-quarter adjusted earnings of $2.34 to $2.36 per share versus estimates of $2.40 per share. 

Salesforce expects full-year 2025 revenue to range from $37.7 billion to $38 billion versus estimates of $37.98 billion. The company sees full-year adjusted earnings between $9.86 and $9.94 per share versus estimates of $9.76 per share.

Salesforce shares appear to be reacting negatively to the top-line miss and weak outlook for the second quarter.

Management will hold a conference call to discuss these results at 5 p.m. ET.

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CRM Price Action: Salesforce shares were down 14.22% at $234 in after-hours trading at the time of publication Wednesday, according to Benzinga Pro.

Photo: Courtesy of Salesforce.