Summary
Salesforce began fiscal 2025 with revenue of $9.13 billion for the quarter ended April 30, 2024, up 10.7% from $8.25 billion a year earlier, and up 11% in constant currency. Gross margin rose to 76.3% from 74.2%. GAAP operating income was $1.71 billion, up from $412 million, and GAAP operating margin climbed to 18.7% from 5.0%, a gain of 13.7 percentage points. Net income was $1.53 billion, or $1.56 per diluted share, compared with $199 million and $0.20 in the prior-year quarter.
The profit improvement came with a much lighter restructuring load. Restructuring charges fell sharply from the prior-year quarter, and total operating expenses declined even as research and development spending grew. Headcount shows where the company is investing: research and development headcount rose 16%, while sales and marketing headcount fell 1% and general and administrative headcount fell 5%. Management initiated a targeted workforce reduction in the first quarter of fiscal 2025 and expects it to be substantially complete during fiscal 2025. The larger restructuring plan announced in January 2023 is largely finished on the employee side, with real estate actions expected to be fully complete in fiscal 2026. Looking ahead, the company said it expects research and development expenses to remain consistent as a percentage of revenue in the near term, and sales and marketing and general and administrative expenses to decrease as a percentage of revenue.
Cash generation was the standout. Operating cash flow was $6.25 billion, up 39% from $4.49 billion, and free cash flow, a non-GAAP measure, was $6.08 billion, up 43%. Capital expenditures fell to $163 million from $243 million. Deferred revenue, current portion only, was $16.06 billion, up 6.2%, and total remaining performance obligations were $53.90 billion, up 15.4%. Total cash, cash equivalents and marketable securities were $17.7 billion as of April 30, 2024. The company returned $2.2 billion through share repurchases and paid $388 million in dividends, its first quarterly payout.
Guidance frames the debate. For the second quarter of fiscal 2025, Salesforce guided revenue to $9.20 billion to $9.25 billion, up 7% to 8%, with a $50 million foreign exchange headwind and current remaining performance obligation growth of 9%. For the full fiscal year, revenue guidance was maintained at $37.7 billion to $38.0 billion, up 8% to 9%. Subscription and support revenue growth guidance for the full year was lowered to slightly below 10%, or approximately 10% in constant currency. Full-year GAAP operating margin guidance was lowered to 19.9%, while non-GAAP operating margin guidance was maintained at 32.5%. Full-year operating cash flow growth guidance was maintained at 21% to 24%. GAAP diluted earnings per share guidance for the full year is $6.04 to $6.12, and non-GAAP diluted earnings per share guidance is $9.86 to $9.94.
The risks are familiar but real. Management cited elongated sales cycles, additional deal approval layers and deal compression, and warned that slower growth in new and renewal business could pressure remaining performance obligations, revenue and the ability to meet guidance. The attrition rate, excluding Slack self service, was approximately eight percent as of April 30, 2024. Foreign currency remains a swing factor, with the dollar strengthening against the euro, British pound sterling and Japanese yen. The company also expects an increase in cash taxes as it has used most of its net operating loss and tax credit carryforwards, and it faces roughly $180 million to $200 million in future cash payments tied to restructuring. Salesforce repurchased about 7 million shares for roughly $2.2 billion and had $16.2 billion remaining under its repurchase authorization at the end of the quarter.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $9.13B | $9.29B | -1.7% | $8.25B | +10.7% |
| Gross profit | $6.97B | $7.14B | -2.4% | $6.12B | +13.9% |
| Gross margin | 76.3% | 76.9% | -0.5 pp | 74.2% | +2.1 pp |
| Research & development | $1.37B | $1.27B | +7.3% | $1.21B | +13.3% |
| Sales & marketing | $3.24B | $3.44B | -5.8% | $3.15B | +2.7% |
| General & administrative | $647.0M | $632.0M | +2.4% | $638.0M | +1.4% |
| Total operating expenses | $5.26B | $5.52B | -4.6% | $5.71B | -7.8% |
| Operating income (loss) | $1.71B | $1.62B | +5.4% | $412.0M | +314.8% |
| Operating margin | 18.7% | 17.5% | +1.2 pp | 5.0% | +13.7 pp |
| Net income (loss) | $1.53B | $1.45B | +6.0% | $199.0M | +670.4% |
| Net margin | 16.8% | 15.6% | +1.2 pp | 2.4% | +14.4 pp |
| Diluted EPS | $1.56 | $1.47 | +$0.09 | $0.20 | +$1.36 |
Risks
MD&A states that in FY2025 Q1 the company continued to see macroeconomic factors and more measured customer buying behavior, including elongated sales cycles, additional deal approval layers and deal compression. Slower growth in new and renewal business, if sustained, impacts remaining performance obligation, revenue and the ability to meet financial guidance and long-term targets.
As Salesforce targets larger enterprise and governmental customers, the sales cycle may become more time-consuming and expensive, with greater configuration and integration demands, pricing pressure and delayed revenue recognition. MD&A confirms elongated sales cycles and deal compression in FY2025 Q1.
Salesforce is building AI, including generative AI and Einstein Copilot, into many offerings. It expects increased competition as AI technologies integrate into its markets, and competitors may develop AI offerings that disrupt workforce needs or achieve faster adoption. AI development also raises accuracy, bias, toxicity, privacy, security, data provenance, copyright and computing cost risks.
Privacy, cross-border data transfer, AI and industry-specific regulations are evolving and may require service changes, increase compliance costs, limit data transfer, or expose Salesforce to fines and private litigation. The filing cites active proceedings, including a Dutch Privacy Collective appeal and a prior UK lawsuit.
The Restructuring Plan, a further workforce reduction initiated in FY2025 Q1, return-to-office and remote work policies, and real estate reductions may negatively affect productivity, culture and the ability to attract and retain key personnel. Salesforce also cites significant competition for engineers, sales executives, data scientists and operations personnel.
Salesforce holds a portfolio of strategic investments in privately held and publicly traded companies. In FY2025 Q1, gains (losses) on strategic investments, net were $37 million, including $130 million of impairments, and the portfolio remains subject to partial or total loss of invested capital and volatility from market conditions.
As of April 30, 2024, Salesforce had $9.4 billion total carrying value of senior unsecured debt, with $1.0 billion due in the next 12 months, plus substantial lease and infrastructure commitments. Covenants and potential ratings downgrades could impair financing and cash flows.
Customers have no obligation to renew, and they may renew for fewer subscriptions, shorter contract lengths or lower cost offerings. As of April 30, 2024, attrition rate excluding Slack self service was approximately eight percent, and failure to accurately predict renewals or upgrades could cause revenue and current remaining performance obligation to decline.
Professional services and other revenue decreased 9% in FY2025 Q1 due primarily to less demand for larger, multi-year transformation engagements and delayed projects. These trends may continue in the near term.
Salesforce is and has been the target of malicious cyberattack attempts and has experienced security incidents, including the April 2022 Heroku incident where a threat actor accessed databases, downloaded customer security credentials and passwords, and accessed an encryption key. AI technologies are enabling more automated, targeted and coordinated attack methods.
On February 28, 2024, Salesforce announced its first-ever quarterly dividend and paid approximately $388 million in FY2025 Q1. The dividend may be discontinued or reduced at any time, which could negatively affect the stock price.
SaaS KPIs
All quarters →Free cash flow
Non-GAAP operating margin
Billings and other
Current Remaining Performance Obligation
Remaining Performance Obligation
Summary, forecast, risks and KPIs are extracted from Salesforce, Inc.'s SEC filings for Q1 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.