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Salesforce (CRM) Q4 Earnings Report Preview: What To Look For

StockStory - Tue Feb 27, 1:01AM CST

CRM Cover Image

Customer relationship management software maker Salesforce (NYSE:CRM) will be reporting earnings tomorrow after the bell. Here's what investors should know.

Last quarter Salesforce reported revenues of $8.72 billion, up 11.3% year on year, in line with analyst expectations. It was a strong quarter for the company, with revenue beating analysts' expectations by a narrow amount but both current and total RPO (remaining performance obligations, a leading indicator of revenue) beat more convincingly. In addition, non-GAAP operating profit and non-GAAP EPS outperformed expectations.

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 10% year on year to $9.22 billion, slowing down from the 14.4% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.27 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 1.1%.

Looking at Salesforce's peers in the sales software segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. ZoomInfo delivered top-line growth of 4.9% year on year, beating analyst estimates by 1.9% and Freshworks reported revenues up 20.2% year on year, exceeding estimates by 1%. ZoomInfo traded up 10.2% on the results, and Freshworks was down 3%.

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

Investors in the sales software segment have had steady hands going into the earnings, with the stocks down on average 1.5% over the last month. Salesforce is up 4.3% during the same time, and is heading into the earnings with analyst price target of $297.6, compared to share price of $300.4.

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