To The Moon

$Salesforce.com(CRM)$ will be reporting their fiscal fourth quarter 2025 earnings on 26 Feb 2025 after market close.

CRM has projected the total revenues between $9.9 billion and $10.1 billion (midpoint $10 billion). Consensus Estimate for revenues is pegged at $10.04 billion, which indicates an increase of 8.1% from the year-ago quarter’s reported figure.

CRM anticipates non-GAAP earnings per share in the band of $2.57-$2.62 for the fourth quarter. Consensus estimate for the earnings per share is expected to come in at $2.61.

Salesforce (CRM) Last Positive Earnings Call Saw 6.42% Negative Change

CRM have a positive earnings call on 03 Dec 2024 for its third quarter 2024 but the share price have suffered a 6.42% negative change since.

The earnings call focused heavily on the successful launch and early adoption of Agentforce, highlighting significant financial growth and strategic advancements in AI and data integration.

Despite these successes, challenges remain in certain geographic markets and specific product lines like MuleSoft and Tableau. Overall, the sentiment of the call was optimistic about future growth and innovation.

Salesforce (CRM) Guidance On Investment In Growth Opportunities

During the Salesforce earnings call for Q3 2025, the company provided guidance emphasizing its strong financial performance and transformative technological advancements, particularly with Agentforce. Revenue for the quarter was $9.44 billion, up 8% year-over-year, with a non-GAAP operating margin of 33.1%, marking a 190 basis point improvement. The company reported non-GAAP EPS of $2.41 and operating cash flow of $2 billion, a 29% increase year-over-year.

Salesforce raised its fiscal year 2025 revenue guidance to $37.8 billion to $38 billion, reflecting 8% to 9% growth, with a non-GAAP operating margin guidance of 32.9%. The CRPO at the end of Q3 stood at $26.4 billion, up slightly more than 10% year-over-year.

Agentforce, Salesforce’s new AI platform, generated over 200 deals in its first week and is poised to drive future growth despite not yet being a material contributor to CRPO. The company highlighted its continued investment in growth opportunities, including hiring 1,400 new sales representatives in Q4 to capitalize on the burgeoning demand for its AI solutions.

Key Metrics To Look At For Salesforce (CRM) Q4 Earnings

Revenue Growth

• Total Revenue:

  Q3 revenue was $9.44 billion, up 8% year-over-year. Non-GAAP operating margin was 33.1%, up 190 basis points, and GAAP operating margin hit 20% for the first time. Operating cash flow was $2 billion, up 29% year-over-year. Looking at the consensus

• Subscription & Support Revenue: Breakdown of recurring revenue (90%+ of total revenue), which reflects core SaaS business health.

• Remaining Performance Obligation (RPO): Future contracted revenue not yet recognized. A rising RPO signals strong demand and visibility.

Segment Performance

Cloud-Specific Growth:

• Sales Cloud: Data Cloud was included in 8 of the top 10 deals, processing 767 trillion records monthly. The number of AI deals tripled year-over-year in Q3.Core CRM growth (still ~30% of revenue).

• Service Cloud: Salesforce introduced Agentforce, their new AI-driven platform, which saw 200 deals closed within one week of its launch on October 24. The company plans to launch Agentforce 2.0 on December 17.

• Data Cloud (Genie): Adoption of AI-driven data unification tools.

• Platform (Slack, MuleSoft, Tableau): Integration synergies and demand for automation/AI tools.

• International Growth: Half of the top 10 wins in Q3 were international, with significant growth in LATAM, Canada, and Australia.

Macroeconomic and Competitive Risks

• IT Spending Trends: The United States and parts of EMEA remained constrained, affecting overall performance in these regions. There was a deceleration in license revenue growth for MuleSoft and Tableau due to tough comparisons from the previous year.

• Competition: Pressure from Microsoft (Dynamics 365), Adobe, or vertical SaaS players.

• Currency Impact: Strength of the U.S. dollar affecting international revenue.

Salesforce (CRM) Price Target

Based on 41 Wall Street analysts offering 12 month price targets for Salesforce in the last 3 months. The average price target is $394.86 with a high forecast of $450.00 and a low forecast of $247.00. The average price target represents a 27.46% change from the last price of $309.80.

Based on what CRM post earnings share price have moved, we could be seeing some volatility even if CRM managed to post a positive earnings, unless the management would be able to show a more convincing positive guidance for FY 2025.

Technical Analysis - Exponential Moving Average (EMA)

We saw a huge decline on Friday (21 Feb) where there was a consolidation trade emerged due to profit-taking activities. Concerns over valuations and a slowdown in momentum among top-performing stocks contributed to this trend.

So CRM have suffered as a result, so it is important to watch how CRM trading would be moving on Monday (24 Feb), because we are seeing RSI moving close to oversold which signal a bearish trend, and the current price is very near 200-day period and we need CRM to start trending back above the 12-EMA.

But first buying interest need to come back, hence, RSI should start to move towards overbought region, but this present an exciting level to get into this AI software stock.

I will be considering taking a position if there is a sign of positive uptrend.

Summary

I would think market might still be in a concern over valuations and a slowdown in momentum among top-performing stocks, this could reduced buying interest. But if we could see buying interest coming back, we might see a nice reversal.

Appreciate if you could share your thoughts in the comment section whether you think CRM could stage a reversal before its earnings before making a gap up if CRM have an earnings surprise.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.