Summary
Salesforce closed fiscal 2024 with a sharp profitability swing. Fourth quarter revenue was $9.29 billion, up 10.8% from the prior-year quarter. Gross profit rose to $7.14 billion, up 13.6%. Operating income reached $1.62 billion, up 354.3%. Net income was $1.45 billion, swinging to a profit from a prior-year quarter loss of $98.0 million. Gross margin improved to 76.9%, up 1.9 percentage points. Operating margin jumped to 17.5%, up 13.2 percentage points. For the full fiscal year, revenue was $34.86 billion, up 11.2%. Full-year net income was $4.14 billion, up 1888.5% from $208.0 million. Full-year diluted EPS was $4.20, up 1900.0% from $0.21. Full-year operating margin was 14.4%, up 11.1 percentage points. Full-year gross margin was 75.5%, up 2.2 percentage points.
Cash generation remained a strong point. Fourth quarter operating cash flow was $3.40 billion, up 22.1% year over year. Full-year operating cash flow was $10.23 billion, up 43.9%. Free cash flow, a non-GAAP measure, was $3.26 billion in the quarter, up 27%, and $9.50 billion for the full year, up 50%. Capital expenditures were $147.0 million in the quarter, down 32.6%, and $736.0 million for the full year, down 7.8%. Deferred revenue ended the quarter at $19.00 billion, up 9.4% from the prior-year quarter. Remaining performance obligation was $56.90 billion, up 17.1%. Deferred revenue of $19.00 billion and remaining performance obligation of $56.90 billion provide visibility into future revenue.
Management initiated its first quarter and full-year fiscal 2025 guidance. First quarter revenue is expected at $9.12 billion to $9.17 billion, with 11% year-over-year growth. Full-year fiscal 2025 revenue guidance is $37.7 billion to $38.0 billion, up 8% to 9% year over year. Subscription and support revenue growth is guided at approximately 10% year over year, slightly above 10% in constant currency. Full-year GAAP operating margin guidance is 20.4%, and non-GAAP operating margin guidance is 32.5%. Full-year GAAP diluted EPS guidance is $6.07 to $6.15, and non-GAAP diluted EPS guidance is $9.68 to $9.76. First quarter GAAP diluted EPS guidance is $1.42 to $1.44, and non-GAAP is $2.37 to $2.39. Operating cash flow growth is guided at 21% to 24% for the full year. Current remaining performance obligation growth is guided at 11% for the first quarter. Salesforce also initiated a quarterly dividend of $0.40 per share and increased its share repurchase authorization by $10 billion. The company returned $1.7 billion through repurchases in the fourth quarter and $11.7 billion since the program began.
Risks remain tied to the macro environment and execution. The 10-K MD&A reports elongated sales cycles, additional deal approval layers, and deal compression. Slower growth in new and renewal business, if sustained, could pressure remaining performance obligation, revenue, and the ability to meet guidance. The attrition rate, excluding Slack, was approximately eight percent as of January 31, 2024. Foreign currency fluctuations negatively impacted current remaining performance obligation by one percent as of that date. Restructuring work is largely complete, but the company expects $100 million to $125 million in future cash payments for restructuring initiatives. The safe harbor statement also flags risks around security and service performance, data center capacity, AI technology integration, evolving regulations, litigation, competition, and strategic investments. Salesforce is guiding to a full-year fiscal 2025 GAAP operating margin of 20.4%, a sharp step up from fiscal 2024, while it continues to invest in AI and data cloud capabilities.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $9.29B | $8.72B | +6.5% | $8.38B | +10.8% |
| Gross profit | $7.14B | $6.57B | +8.7% | $6.28B | +13.6% |
| Gross margin | 76.9% | 75.3% | +1.6 pp | 75.0% | +1.9 pp |
| Research & development | $1.27B | $1.20B | +5.9% | $1.13B | +13.0% |
| Sales & marketing | $3.44B | $3.17B | +8.3% | $3.38B | +1.5% |
| General & administrative | $632.0M | $632.0M | ±0.0% | $586.0M | +7.8% |
| Total operating expenses | $5.52B | $5.06B | +8.9% | $5.93B | -6.9% |
| Operating income (loss) | $1.62B | $1.50B | +8.1% | $357.0M | +354.3% |
| Operating margin | 17.5% | 17.2% | +0.3 pp | 4.3% | +13.2 pp |
| Net income (loss) | $1.45B | $1.22B | +18.1% | -$98.0M | +1575.5% |
| Net margin | 15.6% | 14.0% | +1.5 pp | -1.2% | +16.7 pp |
| Diluted EPS | $1.47 | $1.25 | +$0.22 | -$0.10 | +$1.57 |
Risks
MD&A states Salesforce continues to see impacts from macroeconomic factors and more measured customer buying behavior, with elongated sales cycles, additional deal approval layers and deal compression during fiscal 2024. Slower growth in new and renewal business, if sustained, impacts remaining performance obligation, revenues and ability to meet financial guidance and long-term targets.
As Salesforce targets larger enterprise and government customers, sales cycles may become more time-consuming and expensive, with greater configuration, implementation and revenue-recognition delays. MD&A also cites elongated sales cycles and deal compression, which can pressure near-term bookings and revenue.
The markets for AI offerings remain relatively new and it is uncertain whether Salesforce's related investments will result in significant revenue; competitors may have greater resources or bundle AI features. Salesforce is increasing R&D AI resources, with R&D headcount up five percent at the end of fiscal 2024.
Privacy and data transfer laws, including GDPR, CCPA/CPRA, India's Digital Personal Data Protection Act 2023, the EU Data Act and the EU AI Act, may restrict cross-border data transfers and increase compliance burdens or liability. The EU-U.S. Data Privacy Framework remains subject to legal challenge.
AI and generative AI create risks related to accuracy, bias, toxicity, privacy, security, data provenance and use of copyrighted or protected material, and may require costly testing and proprietary datasets. Evolving rules such as the EU AI Act and Digital Services Act may add regulatory scrutiny and compliance costs.
The Restructuring Plan included a workforce reduction of approximately ten percent, plus an additional reduction of less than one percent initiated and substantially completed in the fourth quarter of fiscal 2024. These actions and related real estate reductions may harm Salesforce's ability to attract, integrate, retain and motivate key employees.
Fiscal 2024 losses on strategic investments, net were $277 million, including $466 million of impairments on privately held equity and debt securities. A ten percent decrease in enterprise values of Salesforce's largest privately held equity securities could reduce the investment portfolio value by $107 million.
As of January 31, 2024, Salesforce had $9.4 billion carrying value of senior unsecured debt, with $1.0 billion due in the next 12 months, and $16.8 billion of infrastructure and other contractual commitments, of which $2.2 billion is due in the next 12 months. These obligations may impair financing flexibility or require substantial cash flows.
On February 28, 2024, Salesforce announced a quarterly dividend policy and its first-ever cash dividend of $0.40 per share. The declaration and payment of any dividend may be discontinued or reduced at any time, which could negatively affect the stock price.
Fiscal 2024 professional services and other revenues decreased $11 million, or 0 percent, due primarily to less demand for larger, multi-year transformation engagements and delayed projects. These trends may continue in the near term.
Customers have no obligation to renew subscriptions after typical 12 to 36 month terms, and some have elected not to renew or may renew for fewer subscriptions or shorter contract lengths. Attrition rate excluding Slack was approximately eight percent as of January 31, 2024.
Salesforce has been the target of malicious cyberattack attempts and disclosed an April 2022 Heroku incident where a threat actor accessed databases, downloaded customer security credentials and accessed an encryption key. AI technologies may enable more automated, targeted and coordinated attacks.
Foreign currency fluctuations minimally impacted fiscal 2024 revenues, but current remaining performance obligation was negatively impacted by one percent as of January 31, 2024 compared to constant currency rates as of January 31, 2023. Exposure is mainly in the Euro, British Pound Sterling, Japanese Yen and other currencies.
Global tax developments, including the Pillar Two global minimum tax and the Inflation Reduction Act, could materially impact cash flows and financial results. The Tax Cuts and Jobs Act requirement to capitalize and amortize R&D costs continues to unfavorably impact Salesforce's tax provision and cash taxes.
SaaS KPIs
All quarters →Free cash flow
Non-GAAP operating margin
Billings and other
Remaining Performance Obligation
Current remaining performance obligation (cRPO)
Summary, forecast, risks and KPIs are extracted from Salesforce, Inc.'s SEC filings for Q4 FY2024 (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 1, 2026.