Salesforce (CRM) Q3 Earnings: What To Expect

Max Juang /
2023/11/28 2:00 am EST

Customer relationship management software maker Salesforce (NYSE:CRM) will be announcing earnings results tomorrow after market hours. Here's what investors should know.

Last quarter Salesforce reported revenues of $8.60 billion, up 11.4% year on year, slightly ahead of analysts' expectations. It was a strong quarter for the company, with revenue, non-GAAP operating profit, and adjusted EPS beating Wall Street's expectations. The company also slightly improved its gross margin vs. last year.

Is Salesforce buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Salesforce's revenue to grow 11.2% year on year to $8.72 billion, slowing down from the 14.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.06 per share.

Salesforce Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 1.2%.

Looking at Salesforce's peers in the sales software segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Freshworks delivered top-line growth of 19.3% year on year, beating analyst estimates by 1.9% and HubSpot reported revenues up 25.6% year on year, exceeding estimates by 4.3%. Freshworks traded up 1.9% on the results, and HubSpot was up 9.1%.

Read our full analysis of Freshworks's results here and HubSpot's results here.

There has been positive sentiment among investors in the sales software segment, with the stocks up on average 11.9% over the last month. Salesforce is up 12.8% during the same time, and is heading into the earnings with analyst price target of $254.4, compared to share price of $224.74.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.