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Salesforce (NYSE:CRM) reported its fiscal 2025 second-quarter financial results, showcasing solid growth across several key metrics. The company continues to exceed internal guidance, with revenue and earnings surpassing management expectations. Salesforce also announced that Chief Financial Officer Amy Weaver would be stepping down from her role but will remain in the position until a successor is appointed and will continue as an advisor.
Revenue Growth and Margin Expansion
In the second quarter, which ended on July 31, 2024, Salesforce generated $9.33 billion in revenue, marking an 8% year-over-year increase. This growth was well-distributed across different regions, with the Americas contributing $6.2 billion (up 8%), Europe $2.2 billion (up 11%), and Asia Pacific $940 million (up 16%). The diversified geographical growth underscores the effectiveness of Salesforce's expansion strategies, particularly in the Asia Pacific region.
Salesforce also reported an improvement in its operating margins. The GAAP operating margin increased to 19.1%, up from 17.2% in the same quarter of the previous fiscal year. Similarly, the non-GAAP operating margin rose to 33.7%, compared to 31.6% a year earlier. These improvements were driven by increased operational efficiency and cost management efforts.
AI and Customer 360 Platform
Salesforce continues to enhance its AI capabilities, particularly through its Customer 360 platform. The company recently launched the Agentforce AI platform, which aims to simplify and automate customer interactions by integrating AI into various enterprise software components. CEO Marc Benioff highlighted the significance of this development, stating, "With our new Agentforce AI platform, we are reimagining enterprise software for a new world where humans with autonomous Agents drive customer success together."
This advancement in AI demonstrates Salesforce's commitment to staying at the forefront of technological innovation, offering its customers more efficient and effective tools to manage their business processes.
Key Metrics and Future Outlook
Salesforce's current remaining performance obligation (cRPO) grew by 10% year over year, reaching $26.5 billion. Operating cash flow also saw an uptick, rising to $0.89 billion from $0.81 billion in the same quarter of fiscal 2024.
For the full fiscal year 2025, Salesforce has maintained its revenue guidance in the range of $37.7 billion to $38.0 billion, representing growth of 8% to 9%. The company made slight adjustments to its operating margin guidance, with GAAP operating margin now expected to be 19.7%, down from 19.9%, while the non-GAAP operating margin was raised to 32.8%, up from 32.5%. Additionally, GAAP diluted EPS guidance was slightly adjusted to $6.05-$6.13 from $6.04-$6.12, and non-GAAP diluted EPS was increased to $10.03-$10.11, from $9.86-$9.94. These adjustments reflect Salesforce's focus on cost management and operational efficiency.
Dividends and Share Repurchase Programs
In line with its commitment to returning capital to shareholders, Salesforce repurchased $2.13 billion worth of its shares during the quarter and paid out dividends totaling $0.40 per share.
