Summary
Salesforce closed FY2025 Q3 with revenue of $9.44 billion, up 8.3% from the prior-year quarter. Gross profit rose 11.8% to $7.34 billion. Operating income climbed 26.1% to $1.89 billion, and net income increased 24.8% to $1.53 billion. Diluted EPS came in at $1.58, up 26.4%. Gross margin improved to 77.7%, up 2.4 percentage points. Operating margin reached 20.0%, up 2.8 percentage points. Operating cash flow was $1.98 billion, up 29.4%, while capital expenditures were $204 million, up 22.9%. Deferred revenue ended the quarter at $13.47 billion, up 7.2%. Total remaining performance obligation was $53.10 billion, up 9.9%. For the nine months, revenue was $27.90 billion, up 9.1%. Operating income for the year-to-date period was $5.38 billion, up 58.9%. Net income was $4.49 billion, up 66.9%, and diluted EPS was $4.60, up 68.5%. Operating cash flow for the nine months was $9.12 billion, up 33.5%, with capital expenditures of $504 million, down 14.4%. Gross margin for the nine months was 77.0%, up 2.0 percentage points, and operating margin was 19.3%, up 6.0 percentage points.
Operational momentum centered on Agentforce, the company's new layer for building and deploying AI agents across sales, service, marketing, and commerce. Management noted increasing momentum for Agentforce and other AI service offerings. The buying environment trends seen over the past two fiscal years have stabilized, though a reemergence of slower growth in new and renewal business could affect remaining performance obligation and future top line results. Current remaining performance obligation was $26.4 billion, up 10% both year over year and in constant currency. Subscription and support revenue grew 9% year over year in constant currency. By service offering, Sales grew 11%, Service grew 10%, Platform and Other grew 8%, Marketing and Commerce grew 8%, and Integration and Analytics grew 5%. Geographically, Americas grew 6%, Europe grew 12%, and Asia Pacific grew 16%. Attrition was approximately 8% as of October 31, 2024, consistent with the prior year.
Guidance points to continued growth but at a slower pace. For Q4 FY25, revenue guidance is $9.90 billion to $10.10 billion, up 7% to 9% year over year. Full year FY25 revenue guidance was raised at the low end to $37.8 billion to $38.0 billion, up 8% to 9% year over year. Subscription and support revenue growth guidance is slightly below 10% year over year, or approximately 10% in constant currency. Full year GAAP operating margin guidance is 19.8%, and non-GAAP operating margin guidance is 32.9%. Q4 GAAP diluted EPS guidance is $1.55 to $1.60, and non-GAAP diluted EPS guidance is $2.57 to $2.62. Full year GAAP diluted EPS guidance is $6.15 to $6.20, and non-GAAP diluted EPS guidance is $9.98 to $10.03. Operating cash flow growth guidance is 24% to 26% year over year. Q4 current remaining performance obligation growth is guided to approximately 9%. Guidance also includes foreign exchange headwinds of $25 million in Q4 and $100 million for the full year. It assumes contributions from Zoomin Software Ltd. and Own Data Company Ltd., which closed in November 2024.
Risks and capital returns round out the quarter. Losses on strategic investments were $(217) million, driven by impairments on privately held equity investments of $242 million. Those losses reduced GAAP diluted EPS by $(0.17) and non-GAAP diluted EPS by $(0.18). Other income was $70 million. The effective tax rate was 13% for the quarter and 18% for the nine months. Restructuring charges were $56 million for the quarter and $163 million for the nine months. Salesforce returned $1.6 billion to stockholders, including $1.2 billion in share repurchases and $0.4 billion in dividends. Total capital returns have surpassed $20 billion. Cash, cash equivalents, and marketable securities totaled $12.8 billion at October 31, 2024. Debt carrying value was $8.4 billion, and the company has a $5.0 billion unsecured revolving credit facility. Management flagged risks including slower growth in new and renewal business, foreign currency fluctuations, seasonality that makes Q4 the strongest quarter for new business and renewals and Q3 the smallest operating cash flow quarter, competitive and regulatory pressures, and integration of acquisitions. The company also expects $100 million to $150 million in future cash payments related to restructuring initiatives and an increase in cash taxes.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2025 | Q2 FY2025 | QoQ | Q3 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $9.44B | $9.32B | +1.3% | $8.72B | +8.3% |
| Gross profit | $7.34B | $7.17B | +2.4% | $6.57B | +11.8% |
| Gross margin | 77.7% | 76.8% | +0.9 pp | 75.3% | +2.4 pp |
| Research & development | $1.36B | $1.35B | +0.5% | $1.20B | +12.6% |
| Sales & marketing | $3.32B | $3.22B | +3.1% | $3.17B | +4.7% |
| General & administrative | $711.0M | $711.0M | ±0.0% | $632.0M | +12.5% |
| Total operating expenses | $5.45B | $5.38B | +1.2% | $5.06B | +7.5% |
| Operating income (loss) | $1.89B | $1.78B | +6.2% | $1.50B | +26.1% |
| Operating margin | 20.0% | 19.1% | +0.9 pp | 17.2% | +2.8 pp |
| Net income (loss) | $1.53B | $1.43B | +6.9% | $1.22B | +24.8% |
| Net margin | 16.2% | 15.3% | +0.9 pp | 14.0% | +2.1 pp |
| Diluted EPS | $1.58 | $1.47 | +$0.11 | $1.25 | +$0.33 |
Risks
Salesforce faces increased competition as AI technologies are integrated into enterprise software, and competitors may incorporate AI into their offerings more successfully or develop AI offerings that disrupt workforce needs and reduce demand. MD&A highlights Agentforce and AI momentum, making competitive execution critical.
Markets and monetization strategies for AI offerings such as Agentforce remain relatively new and uncertain, and pricing or packaging changes may not be widely accepted. Consumption-based models may give less visibility into revenue timing and customers could consume at lower levels than expected.
Efforts targeting larger enterprise, government and regulated-industry customers can create longer, more expensive sales cycles, pricing pressure and implementation delays. MD&A cites less demand for larger, multi-year transformation engagements and delayed projects, trends that may continue in the near term.
Customers have no obligation to renew after contract expiration and may renew for fewer subscriptions, shorter lengths or lower-cost offerings. MD&A states the attrition rate was approximately eight percent as of October 31, 2024, excluding Slack self service.
The Restructuring Plan and targeted workforce and office space reductions initiated in the first half of fiscal 2025 may negatively impact the ability to attract, integrate, retain and motivate key employees and maintain corporate culture.
Salesforce completed acquisitions of Zoomin and Own in November 2024, and acquisition integration may disrupt operations, strain resources or fail to achieve expected business and financial benefits.
The strategic investment portfolio is subject to volatility and impairment, with third-quarter fiscal 2025 losses on strategic investments driven by impairments on privately held equity investments. Such losses could materially impact financial results in periods of market uncertainty.
Evolving privacy, cross-border data transfer, AI and data residency regulations, including the EU AI Act and DSA, may increase compliance costs or limit the use and adoption of Salesforce services.
Breaches or unauthorized access to customer or company data, including AI-enabled attack methods, could harm reputation and lead to legal and financial liability. The filing references the April 2022 Heroku incident and states future incidents could be material.
Global tax developments, including the OECD 15 percent global minimum tax, could increase the effective tax rate and cash tax payments. MD&A states the company continues to evaluate impacts and that its effective tax rate and cash tax payments could increase in future years.
Volatile or weakened global economic conditions, geopolitical conflicts, inflation and trade tensions could delay customer purchasing decisions or reduce the value and duration of subscription contracts.
Fluctuations in currency exchange rates, particularly the U.S. Dollar versus the Euro and British Pound Sterling, could affect financial results, though MD&A states total revenues and current remaining performance obligation were minimally impacted by foreign currency fluctuations in the nine months ended October 31, 2024.
SaaS KPIs
All quarters →Free cash flow
Non-GAAP operating margin
Billings and other
Current Remaining Performance Obligation
Total Remaining Performance Obligation
Summary, forecast, risks and KPIs are extracted from Salesforce, Inc.'s SEC filings for Q3 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.