2 min Applications

Salesforce records lower than expected revenue for first time since 2006

Salesforce records lower than expected revenue for first time since 2006

Salesforce fell just short of expected quarterly revenue for the first time since 2006 despite a double-digit increase in revenue.

Figures for the past fiscal quarter show that revenue grew 11 per cent to $9.13 billion (€8.5 billion), which is less than the $9.15 billion expected by financial analysts. The revenue growth was mainly driven by subscription and support revenue, which increased by 12 per cent in the past quarter to $8.59 billion.

Not only were the results of the first fiscal quarter of 2025 lower than expected, but the CRM vendor also revised its expectations for the second fiscal quarter. For this quarter, Salesforce expects revenue of between $9.2 billion and $9.25 billion, while earlier revenue of $9.31 billion was expected for this particular quarter.

The projected revenue for the fiscal year 2025 remains the same at between $37.7 billion and $38 billion. Following the announcement of the figures for the first fiscal quarter of 2025, the value of Salesforce shares temporarily fell 17 per cent.

According to experts, the lower revenue growth is mainly because Salesforce is still too focused on increasing revenue through (small) price increases for its services and a focus on cross-selling. This is in contrast to the ambition of the market leader in CRM to present itself as a leading and inspiring software vendor that wants to benefit from the rise of AI and thus can claim a large share of this market segment.

Salesforce is betting heavily on infusing AI into its portfolio these days. Among other things, its GenAI assistant, Einstein Copilot, recently became generally available, and several AI improvements have also been implemented in Tableau. The CRM giant itself indicates that it is on the eve of great opportunities for its end users to engage with AI in new ways.

Poor software season

Further, experts indicate that Salesforce’s financial results are yet another example of an application vendor suffering from a bad season for software and related services. This contrasts the very good results achieved in the past year 2023.

Also read: Update Einstein Copilot personalizes customer contact