Salesforce shares are trending lower in late trading on Wednesday after the software giant reported strong quarterly results but issued fiscal January 2025 guidance that disappointed Wall Street.
Salesforce also announced a $10 billion increase in its stock repurchase program and instituted a quarterly dividend of 40 cents per share.
For its fiscal fourth quarter ended Jan. 31, Salesforce reported revenue of $9.29 billion, up 11% from the year-ago quarter, beating the FactSet Wall Street consensus of $9.22 billion U.S. dollar. On an adjusted basis, the company earned $2.29 per share, also above the Street consensus of $2.27.
The company noted that total remaining performance obligations, a measure of future revenue, were $56.9 billion at the end of the quarter, up 17% from a year earlier. Free cash flow was $3.26, up 27% year over year.
For the April quarter, the company expects revenue between $9.12 billion and $9.17 billion. At the midpoint, that's just below the Street consensus of $9.15 billion. The company expects adjusted earnings of $2.237 to $2.39 per share for the quarter, above the Street consensus of $2.20.
For fiscal January 2025, Salesforce expects revenue of $37.7 billion to $38 billion, up 9% but below consensus of $38.6 billion and non-GAAP earnings of 9%. $68 to $9.76 per share, above the Street consensus forecast of $9.50 per share. The company's full-year non-GAAP operating margin guidance is 32.5%, above the average of 32%.
The company gave guidance for subscription and support revenue for the first time, essentially eschewing its professional services business. Salesforce expects this part of its business to grow 10%, while professional services revenue remains under pressure, including an 8% decline in the January quarter.
Salesforce said its headcount at the end of the fiscal year was down about 8.5% compared to the start of the year. The company expects a slight increase in the number of employees for the 2025 fiscal year, with a particular focus on research and development in the areas of AI and cloud.
The dividend, the company's first, will be paid on April 11 to shareholders of record as of March 14.
In late trading on Wednesday, Salesforce shares fell 3.7%.