Salesforce (CRM) Q1 2025 Earnings Report

Marc Benioff, CEO of Salesforce, will appear on a panel at the World Economic Forum in Davos, Switzerland on January 18, 2024.

Stefan Wermuth | Bloomberg | Getty Images

Sales team Shares tumbled as much as 17% in extended trading Wednesday after the cloud software provider reported weaker-than-expected earnings and issued guidance that fell short of Wall Street expectations.

Here's how the company did, compared to the LSEG consensus:

  • Profit per share: $2.44 adjusted versus $2.38 expected
  • Gain: $9.13 billion versus $9.17 billion expected

Salesforce called for adjusted earnings per share for the current quarter of $2.34 to $2.36 on revenue of $9.2 billion to $9.25 billion. Analysts polled by LSEG expected adjusted earnings per share of $2.40 on revenue of $9.37 billion.

Revenue in the fiscal first quarter ended April 30 rose 11% from $8.25 billion a year earlier, Salesforce said in a report. rack. It's the first time since 2006 that Salesforce has fallen short on revenue, according to LSEG data.

Salesforce saw budget control and longer than normal deal cycles during the quarter, president and operating chief Brian Millham told analysts on a conference call. Management implemented go-to-market changes that reduced bookings, Millham said.

All five Salesforce product areas contributed to the growth. But Professional Services and Other category revenue fell 9% at $548 million and was below the StreetAccount consensus of $572.9 million.

Net income rose to $1.53 billion, or $1.56 per share, from $199 million, or 20 cents per share, a year ago.

Salesforce has raised its earnings forecast for fiscal 2025. The company now expects adjusted earnings per share of $9.86 to $9.94, compared to $9.68 to $9.76 three months ago. Revenue expectations remain at $37.7 billion to $38 billion. Analysts polled by LSEG expected adjusted earnings per share of $9.76 and revenue of $38.08 billion.

Amy Weaver, Salesforce's chief financial officer, said she expects business services deals to be reduced and projects to slow in the coming fiscal year.

During the quarter, Salesforce began its… Einstein Copilot assistant sales and customer service representatives. The company too said Artificial intelligence features such as conversation summaries and daily summaries became available to paying Slack customers. The Wall Street Journal reported that Salesforce was in talks to acquire a data integration company Computer sciencebut weeks later the newspaper said there were talks had collapsed.

Weaver said Salesforce's acquisitions “need a clear timeline to appreciate the growth.”

Before the after-hours move, Salesforce shares were up 3.5% so far this year, lagging the S&P 500 index, which was up about 11% over the same period. A drop of this magnitude on Thursday would be Salesforce's worst day on the market since the 2008 financial crisis.

– CNBC's Robert Hum contributed to this report.

WATCH: Salesforce is investing even more in artificial intelligence

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