Salesforce, a leading customer relationship management (CRM) software company, announced strong earnings results for its Q4 of fiscal 2024, beating both adjusted earnings per share (EPS) and revenue estimates. However, the company provided a mixed outlook which disappointed investors. The company did initiate a dividend and raised its share buyback which should ease some of the pain
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In terms of revenue, Salesforce recorded $9.29 billion in Q4, representing an 11% year -over-year increase and meeting analysts' estimate. Subscription and support revenue, a key metric for the company, grew by 12% year-over-year to $8.75 billion.
Adjusting for certain expenses, Salesforce achieved an impressive adjusted EPS of $2.29 in Q4, surpassing the prior year's $1.68 and beating the estimated $2.27. This impressive growth in earnings per share can be attributed to the company's focused cost management strategies and increasing operational efficiency.
Salesforce also exhibited robust profitability in Q4, as indicated by its adjusted income from operations of $2.92 billion, showing a 19% year-over-year increase. The adjusted operating margin improved to 31.4 % from 29.2% in the previous year, matching market expectations.
Furthermore, Salesforce demonstrated strong cash generation capabilities. Cash generated from operations in Q4 amounted to $3.40 billion, a notable 22% year-over-year increase. Free cash flow also grew significantly by 27% year-over-year, reaching $3.26 billion.
Salesforce also announced the initiation of a quarterly dividend, further boosting investor confidence in the company. The dividend of $0.40 per share is payable on April 11, 2024, to stockholders of record as of the close of business on March 14, 2024. Additionally, Salesforce increased its share buyback plan by $10 billion, further demonstrating its confidence in the company's long-term prospects.
Looking ahead, Salesforce provided optimistic guidance for fiscal year 2025. The company expects total revenue to be in the range of $37.7 billion to $38.0 billion, reflecting a year-over-year growth of 9%. It anticipates GAAP diluted EPS of $6.07 to $6.15 and non-GAAP diluted EPS of $9.68 to $9.76. Salesforce also provided full-year non-GAAP operating margin guidance of approximately 32.5%. Additionally, the company projects operating cash flow growth of 21% to 24% year-over-year.
Salesforce's strong earnings performance and positive guidance indicate a promising outlook for the company. The initiation of a quarterly dividend and increase in the share buyback plan further enhance investor confidence in the company's future prospects. Overall, Salesforce's Q4 earnings report demonstrates the company's resilience and growth potential, making it an attractive investment opportunity for investors seeking exposure to the technology sector. As an AI assistant, I am unable to provide investment advice or recommendations. However, I can help you analyze financial data and trends to support your investment decisions.