Executive Summary
Salesforce Inc (CRM) has announced its Q4 2024 earnings revealing a robust performance characterized by an 11% year-over-year revenue growth, reaching $9.29 billion. This quarter's highlights include a significant increase in operating cash flow by 44% year-over-year, improvements in profit margins, and the launch of their first dividend. Management emphasized the transformative impact of AI on the business landscape and Salesforce's strategic positioning as a leader in the AI-driven market. CEO Marc Benioff remarked on the unprecedented growth and significant investor relations during this pivotal year, accentuating the sustained momentum in AI and data cloud offerings as key growth drivers.
Key Performance Indicators
QoQ: 18.14% | YoY:1 575.51%
QoQ: 18.25% | YoY:1 590.00%
Key Insights
**Revenue and Profitability**: Q4 2024 revenue totaled $9.29 billion, up from $8.36 billion in Q4 2023, representing an 11% year-over-year growth. Full-year revenue reached $34.9 billion, showing resilience in a measured buying environment and strong performance across cloud segments.
**Earnings**: Net income surged to $1.446 billion in Q4, reflecting a staggering 1,576% increase from the previous year, with diluted EPS improving to $1.47.
**Margins**: Non-GAAP operating margin was reported a...
Financial Highlights
Revenue and Profitability: Q4 2024 revenue totaled $9.29 billion, up from $8.36 billion in Q4 2023, representing an 11% year-over-year growth. Full-year revenue reached $34.9 billion, showing resilience in a measured buying environment and strong performance across cloud segments.
Earnings: Net income surged to $1.446 billion in Q4, reflecting a staggering 1,576% increase from the previous year, with diluted EPS improving to $1.47.
Margins: Non-GAAP operating margin was reported at 31.4%, showing a year-on-year improvement of 220 basis points, underlining Salesforce's focus on operational excellence and cost efficiency.
Cash Flow: Q4 operating cash flow came in at $3.4 billion, up 22% from the prior year, with full-year free cash flow at $9.5 billion, marking a 50% increase, indicative of strong cash generation capabilities.
Remaining Performance Obligation (RPO): The current RPO stands at $27.6 billion, marking a 12% increase year-over-year, a positive leading indicator of future revenue.
Income Statement
Metric |
Value |
YoY Change |
QoQ Change |
Revenue |
9.29B |
10.77% |
6.50% |
Gross Profit |
7.14B |
13.61% |
8.74% |
Operating Income |
1.62B |
354.34% |
8.06% |
Net Income |
1.45B |
1 575.51% |
18.14% |
EPS |
1.49 |
1 590.00% |
18.25% |
Key Financial Ratios
operatingProfitMargin
17.5%
operatingCashFlowPerShare
$3.51
freeCashFlowPerShare
$3.36
Management Commentary
- AI Transformation: CEO Marc Benioff emphasized that 2024 has been a year of extraordinary transformation for Salesforce, substantially driven by AI advancements. He stated, "...every customer realizes, number one, they've got to start a major investment cycle if they're going to remain competitive."
- Dividend Introduction: For the first time in 25 years, Salesforce is initiating a quarterly dividend, reflecting management's confidence in sustained cash flow generation and commitment to shareholder returns.
- Growth in AI: COO Brian Millham noted, "Data Cloud is approaching $400 million in ARR, growing at nearly 90% year-over-year," showcasing the demand for AI and data integration solutions that underlie increased productivity across enterprises.
"Look, as you can see from these numbers, we've had just an incredible quarter, well, actually we've just had an incredible year here at Salesforce with strong performance across all of our key metrics, revenue, margin, EPS, cash flow and of course our CRPO." - Marc Benioff, CEO
— Marc Benioff
"As part of our transformation, we also refined and scaled our big deal motion and introduced new product bundles to give our customers comprehensive solutions on a unified, trusted platform." - Brian Millham, COO.
— Brian Millham
Forward Guidance
Salesforce is guiding for FY25 revenue between $37.7 billion and $38 billion, representing an 8-9% growth year-over-year. The company anticipates that subscription and support revenue will see growth above 10% in constant currency. Management expects operating cash flow growth of approximately 21% to 24%, leveraging their solid operational foundation while absorbing a $100 million foreign exchange headwind. This forward-looking statement underscores Salesforce's confidence in navigating a competitive landscape, driven by its deep commitment to delivering value and innovation in AI and data solutions.