Salesforce Reports 8% Revenue Growth to $9.4 Billion in Q3 Fiscal 2025

Salesforce, Inc. reported its financial results for the third quarter of fiscal 2025, revealing a total revenue of $9.4 billion for the three months ended October 31, 2024, marking an 8% increase from $8.7 billion in the same period last year. For the nine months ended October 31, 2024, revenue reached $27.9 billion, a 9% year-over-year increase from $25.6 billion. The company reported a net income of $1.5 billion for the quarter, translating to a diluted net income per share of $1.45, compared to $1.05 per share in the prior year. The operating income for the nine-month period was $5.4 billion, with an operating margin of approximately 19%, up from 13% in the previous year.

Salesforce's subscription and support revenues, which accounted for approximately 94% of total revenues, increased by 9% year-over-year to $8.9 billion for the quarter. The growth was primarily driven by new business volume, including new customers and upgrades from existing clients. The company also noted a 10% increase in subscription and support revenues for the nine-month period, totaling $26.2 billion. However, professional services and other revenues saw a decline, attributed to reduced demand for larger, multi-year transformation projects.

In terms of strategic developments, Salesforce announced the acquisition of Spiff, Inc. in February 2024 for $419 million, enhancing its incentive compensation management capabilities. Additionally, the company has been focusing on its new AI offerings, including Agentforce, which allows businesses to deploy AI agents across various functions. The company continues to invest in generative AI technologies, which it believes will significantly enhance customer engagement and operational efficiency.

Salesforce's operational metrics indicate a strong customer base, with approximately 957 million shares of common stock outstanding as of November 27, 2024. The company reported a remaining performance obligation of $53.1 billion, reflecting a 10% increase year-over-year, indicating a solid pipeline of future revenue. The company also repurchased approximately 30 million shares for about $7.7 billion during the nine months ended October 31, 2024, as part of its ongoing share repurchase program, which has a total authorization of $30 billion.

Looking ahead, Salesforce expressed cautious optimism regarding its growth trajectory, noting that while the demand for AI services is increasing, the overall buying environment has stabilized. However, the company acknowledged potential challenges, including slower growth in new and renewal business, which could impact future revenues and performance. The company remains committed to improving operational efficiencies and managing costs as it navigates the evolving market landscape.