Salesforce CRM Q1 earnings stock falls weak sales view

Salesforce CRM shares drop 16% pre-market due to mixed Q1 results and weak Q2 guidance. Investors cautious amid slowing tech spending.

Salesforce CRM shares took a hit in Thursday's pre-market trading, dropping nearly 16% as the company released its first-quarter fiscal 2025 results. While non-GAAP earnings exceeded expectations, revenues fell short, leading to a mixed bag of results.

Investors were further spooked by the company's weak guidance for the second quarter, signaling a potential slowdown in cloud and tech spending amidst high interest rates and ongoing inflationary pressures.

In the first quarter, Salesforce saw a 44% increase in non-GAAP earnings, reaching $2.44 per share. Revenues climbed 11% year over year to $9.13 billion but slightly missed estimates. The company attributed its strong performance to ongoing cost-restructuring efforts and increased demand for its cloud and business software solutions.

Salesforce's various business segments all saw growth, with Subscription and Support revenues up 12.3% and Professional Services and Other revenues down 9.4%. Geographically, America saw a 10.6% increase in revenues, while EMEA and Asia Pacific also posted gains.

Looking ahead, Salesforce provided guidance for the second quarter, expecting total sales between $9.20 billion and $9.25 billion. For fiscal 2025, the company anticipates revenues in the range of $37.7-$38 billion, with non-GAAP earnings projected to be between $9.86-$9.94 per share.

Despite the mixed results and cautious guidance, Salesforce remains a strong player in the tech sector. Investors looking for opportunities may also consider stocks like Tyler Technologies, Datadog, and Palo Alto Networks, which have shown positive growth and outlook in the market.