Salesforce, formerly a growth giant renowned for its steady double-digit revenue growth, is currently facing a significant slowdown in sales growth. After consistently achieving over 20 percent annual growth until fiscal year 2022, the company's revenue rise in the first fiscal quarter of 2025 barely reached the low double digits.
Salesforce (CRM) is expected to release its fiscal 2025 third-quarter results on December 3, and investors are keen to see how the stock performs after that.
CRM Q3 Earnings Projection
The company anticipates its overall sales for the third quarter of the fiscal year to be between $9.31 billion and $9.36 billion, with a midpoint of $9.335 billion. Analysts' Consensus Estimate for earnings is $9.34 billion, a rise of 7.1% over the reported amount from the same quarter last year.
For the third fiscal quarter, CRM expects non-GAAP profits per share to fall between $2.42 and $2.44. At $2.43 per share, the average consensus sign for non-GAAP revenue has not changed, indicating a 15.2% increase over the same quarter last year.
CRM Bull Cases
Salesforce's tactical emphasis on cloud services and digital transformation seems to be positioning the company to report resilient third-quarter fiscal results. Salesforce's dedication to matching its range of goods with consumer demands probably increased its quarterly revenues, especially as businesses worldwide undergo digital transformations.
Salesforce has greatly benefited from the rising demand for cloud solutions powered by generative AI. By integrating generative AI technologies into all of its products, Salesforce increases customer loyalty and fortifies its position as a leader in the customer relationship administration market. This forward-thinking strategy might have greatly aided its revenue increase during that period.
One of the main pillars of Salesforce's growth plan is its capacity to strengthen ties with top brands across sectors and broaden its presence in important geographic areas. It is probable that the company's growing presence in the public industry gave it an additional boost and opened up new growth prospects in the third quarter.
Factors To Watch During Q3 Earnings
Salesforce's third-quarter fiscal revenue growth might have been impacted by a drop in software investing by small and medium-sized enterprises amid the global geopolitical unrest and macroeconomic volatility brought on by the pandemic. In addition to forex challenges, Oracle and Microsoft's fierce competition is another issue.
Nonetheless, Salesforce's earnings in the third quarter probably increased because of its continuing restructuring decisions, which included staff reduction. Due primarily to an increased gross margin and the advantages of cost reorganizing initiatives, such as staff reductions and office space reductions, the company's first fiscal quarter non-GAAP operating profit margin increased 210 basis points to 33.7%.
