CRM Earnings: Salesforce Posts Upbeat Q4, Initiates Dividend

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Salesforce (NASDAQ:CRM) reported upbeat results for the fiscal fourth quarter (ended January 31, 2024), benefiting from higher demand for cloud services. However, CRM stock fell about 2% in yesterday’s extended trading session due to a weak revenue outlook for Fiscal Year 2025.

CRM is a cloud-based software company known for its customer relationship management platform, offering a wide range of business solutions.

Q4 Snapshot

The company’s adjusted earnings of $2.29 per share outpaced the Street’s estimates of $2.27 per share and increased 36.3% from the prior-year quarter. Similarly, revenues grew about 11% year-over-year to $9.29 billion and slightly exceeded analysts’ estimates of $9.22 billion.

Segment-wise, Subscription and support revenues increased 12% year-over-year to $8.75 billion. On the other hand, Professional services and other revenues were $539 million, down 9%.

Moving to other metrics, Salesforce reported total remaining performance obligations of $56.9 billion, up 17% from the prior-year quarter. This metric serves as an indicator of future revenue. Additionally, free cash flow came in at $3.26 billion, up 27%.

Outlook

For the Fiscal first quarter, CRM expects revenue between $9.12 billion and $9.17 billion, compared with the analysts’ expectations of $9.15 billion. Furthermore, the company expects adjusted earnings to be in the range of $2.237 to $2.39 per share, above the Street consensus of $2.20.

For the full Fiscal Year 2025, Salesforce anticipates that revenue will fall between $37.7 billion and $38 billion. The expected range is below the consensus estimate of $38.7 billion. Nevertheless, earnings are expected to be between $9.68 and $9.76 per share, above the $9.61 per share estimate.

First-Ever Dividend

Backed by a strong cash position, Salesforce initiated a common stock dividend of $0.40 per share. The dividend will be payable on April 11, 2024, to stockholders of record as of March 14, 2024. 

In addition to this, CRM boosted its share buyback program by $10 billion to a total of $30 billion.

What Is the Price Target for CRM?

On TipRanks, Salesforce stock has a Moderate Buy consensus rating based on 27 Buy, 10 Hold, and one Sell ratings received during the past three months. The average CRM stock price target of $300.79 implies a 0.34% upside potential from current levels. Shares of the company have gained 30.1% in the past three months.

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