Q3 2025 Summary
Published Feb 7, 2025, 7:58 PM UTC- Strong customer adoption of Agentforce across key products: Salesforce is experiencing significant traction with over 200 initial Agentforce deals, primarily as add-ons to their Service Cloud offerings. There is a great opportunity ahead with Agentforce also across Sales Cloud, Marketing Cloud, Commerce Cloud, and Data Cloud, which is included in all Agentforce deals.
- Value-driven usage-based pricing model: The $2 per conversation usage-based pricing for Agentforce provides high value to customers compared to their current spending, making pricing discussions significantly easier and demonstrating the cost savings delivered through Agentforce.
- Unified platform enhances AI effectiveness and differentiation: Salesforce's initiatives like 'More Core' and 'Foundations' integrate sales, service, marketing, analytics, Data Cloud, and Slack into one platform, vital for AI to work effectively by leveraging shared data and metadata. This unified approach enhances the effectiveness of AI solutions like Agentforce, uniquely differentiating Salesforce in the market.
- Data Integration Challenges May Delay Agentforce Adoption: According to Brian Millham, for customers with siloed data across different divisions, it can take "6 months even to bring that data together" and harmonize it for Agentforce implementation. This prolonged timeline may slow down the adoption of Agentforce and delay revenue realization.
- Revenue Constraints in Key Markets: Amy Weaver noted that while there was strong new business growth in LATAM, Canada, and Australia, "the United States and parts of EMEA remained constrained". Ongoing constraints in these significant markets could impact overall revenue growth.
- Limited Near-Term Financial Impact from Agentforce: Despite the excitement around Agentforce, Amy Weaver stated, "we do not expect a material contribution to CRPO from Q4 Agentforce related bookings". This suggests that the financial benefits of Agentforce may not be realized in the near term, potentially affecting short-term revenue growth.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +8% | Continued expansion in Subscription & Support (up +9% YoY) helped drive overall revenue, especially in EMEA and APAC. However, a measured buying environment in the Americas tempered growth. Foreign exchange headwinds also had a minor impact on results. |
Subscription & Support | +9% | Growth came largely from volume-driven increases—including new customers, additional subscriptions, and upgrades. Pricing was not a significant factor. Term license revenue remained at roughly 5% of this segment. |
Americas | +6% | Slower pace than other regions due to a measured buying environment, especially in the transactional and SMB segments. Despite the slower growth, the Americas remains the largest revenue contributor at 67% of total revenue. |
Europe (EMEA) | +12% | Driven by investment in additional sales resources, focus on multi-cloud deals, and new services. Consistent efforts to market internationally further boosted growth. |
Asia Pacific (APAC) | +16% | Benefited from robust new business in key markets like Japan and India. Growth in constant currency was notably higher, reflecting strong local demand for Salesforce’s offerings. |
Net Income | +25% | Revenue scale coupled with improved operating margins from cost discipline and restructuring benefits drove profitability higher. Share repurchases also supported net income growth by reducing share count. |
Diluted EPS | +26% | Revenue outperformance, margin expansion, and stock buybacks raised EPS. Ongoing cost controls helped sustain higher profitability, pointing to continued EPS strength. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | FY 2025 | $37.7B–$38.0B (8%–9% y/y) | $37.8B–$38.0B (8%–9% y/y) | raised |
Subscription & Support Rev | FY 2025 | ~10% y/y in constant currency | ~10% y/y in constant currency | no change |
Non-GAAP Operating Margin | FY 2025 | 32.8% (230 bps improvement) | 32.9% (240 bps improvement) | raised |
GAAP Operating Margin | FY 2025 | Slightly below 20% (530 bps improvement) | Slightly below 20% (540 bps improvement) | raised |
GAAP Diluted EPS | FY 2025 | $6.05–$6.13 | $6.15–$6.20 | raised |
Non-GAAP Diluted EPS | FY 2025 | $10.03–$10.11 | $9.98–$10.03 | lowered |
Operating Cash Flow Growth | FY 2025 | 23%–25% | 24%–26% | raised |
Free Cash Flow Growth | FY 2025 | 25%–27% | 26%–28% | raised |
CapEx | FY 2025 | Slightly below 2% of revenue | Slightly below 2% of revenue | no change |
Attrition | FY 2025 | No prior guidance | Slightly above 8% | no prior guidance |
FX Impact | FY 2025 | No prior guidance | ~$100M headwind (30 bps) | no prior guidance |
Revenue | Q4 2025 | No prior guidance | $9.9B–$10.1B (7%–9% y/y) | no prior guidance |
CRPO Growth | Q4 2025 | No prior guidance | ~9% y/y nominal (~slightly above 9% cc) | no prior guidance |
GAAP EPS | Q4 2025 | No prior guidance | $1.55–$1.60 | no prior guidance |
Non-GAAP EPS | Q4 2025 | No prior guidance | $2.57–$2.62 | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Revenue | Q3 2025 | $9.31B – $9.36B | $9.444B | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Agentforce | Highlighted in Q2 2025 as a transformative AI platform; no mentions in Q1 2025 or Q4 2024 | Discussed as a key AI platform with over 200 wins; significant financial impact expected | Emerged in Q2, continued focus and adoption in Q3 |
AI transformations | Consistently mentioned in previous quarters as a major growth driver (Q2: 1,500+ AI deals; Q1 & Q4: emphasis on AI’s role in productivity and customer relationships) | Positioned as central to Salesforce’s future, with 2,000+ AI deals and triple $1M+ AI deals | Ongoing strong emphasis and positive sentiment |
Bookings and CRPO growth | Q2 2025: CRPO $26.5B (10% YoY); Q1 2025: CRPO $26.4B (10% YoY); Q4 2024: CRPO $27.6B (12% YoY) | CRPO $26.4B (~10% YoY), solid bookings with early Agentforce adoption | Recurring focus; moderate YoY growth each quarter |
CFO departure and leadership changes | Amy Weaver’s departure discussed in Q2 2025; no other leadership changes mentioned in Q1 or Q4 | No mention in Q3 | Newly mentioned in Q2, not addressed in Q3 |
Data Cloud | Consistent mentions of rapid growth and importance for AI across Q2, Q1, and Q4 | Included in 8/10 top deals, used by 25% of Fortune 100, 767T records monthly | Continues strong adoption; core to AI strategy |
Measured buying environment | Discussed heavily in Q2, Q1, and Q4, with elongated deal cycles and cautious spending | Not explicitly mentioned, though some regional constraints noted | Previously recurring theme, less explicit in Q3 |
More Core integration | No prior mentions in Q2, Q1, or Q4 | Aggressive integration of apps into one platform to enable unified AI | New focus in Q3 |
Multi-cloud adoption | Strong and consistent in Q2, Q1, and Q4: 80% new business multi-cloud in Q2; 6+ clouds in top deals for Q1 & Q4 | Top 25 deals averaged 5 clouds each, central to financial strategy | Ongoing strength and adoption across quarters |
Operating margin improvements | Q2: 33.7% non-GAAP; Q1: 32.1% non-GAAP; Q4: 30.5% non-GAAP. Consistent year-over-year improvements | Non-GAAP margin 33.1% (up 190 bps); GAAP margin 20% milestone | Continual focus on profitability with notable gains |
Professional services revenue decline | Q2: Better than expected but still a drag; Q1: Slowed by deal compression; Q4: Down 9% due to smaller projects and push to partners | Remains a headwind to revenue growth | Persistent decline across periods |
Regional growth and slowdown | Recurring updates each quarter; Q2: Americas 7%, Q1 & Q4 also noted slowdowns in parts of US/EMEA and stronger growth in APAC | Americas +6%, EMEA +12%, APAC +16%; some US & EMEA constraints | Continually reported; varied slowdowns persist in select regions |
-
Agentforce Deals and Growth
Q: Can you provide details on the 200 Agentforce deals?
A: We're seeing incredible traction with Agentforce as add-ons to our Service Cloud offerings. The initial 200 deals were largely upsells within Service Cloud, but customers recognize it's a platform opportunity. We feel great about the opportunities ahead with Sales Cloud, Marketing Cloud, Commerce Cloud, and Data Cloud, which is included in all Agentforce deals. These 200 deals are just the tip of the iceberg for Agentforce. -
Agentforce Pricing
Q: How are pricing discussions for Agentforce progressing?
A: Agentforce has a usage-based pricing structure at $2 per conversation, offering high value to customers given their current spending. Customers understand their labor costs, and deploying agents helps manage interactions more efficiently. Pricing conversations are significantly easier, and we've provided calculators on our website to help customers understand the cost structures. -
More Core Initiative
Q: Tell us more about the "More Core" initiative and its significance.
A: Over the past two years, we've significantly invested in AI and "More Core," increasing our engineers' productivity and numbers. This has resulted in integrating products like Commerce and Marketing into our core platform. Having Sales, Service, Marketing, Analytics, Data Cloud, and Slack on one platform enhances AI capabilities, allowing for comprehensive functionality that's unique to Salesforce. -
Data Readiness for Agentforce
Q: How prepared are customers with data to leverage Agentforce?
A: It varies by customer. Those with strong data architecture can turn on Data Cloud, harmonize data, and leverage our AI solutions in weeks or months. Others with siloed data may take up to six months. All customers recognize the need for harmonized data, and there's tremendous demand for the technology and people to achieve it. -
Foundations Offering Adoption
Q: What's the customer response to Foundations, adoption outlook?
A: Foundations showcases our platform's evolution, allowing customers to access Sales, Service, Marketing, Analytics, Data Cloud, and Slack seamlessly. Customers see they don't need separate products—they can just flip the switch. There's still work to educate customers on our capabilities, but we're excited because we're highly differentiated. -
Agentforce Halo Effect
Q: How is Agentforce affecting other product lines?
A: Our top customers are adopting a comprehensive "agent-first" suite, integrating Sales, Service, Marketing, Analytics, Data Cloud, and Slack. In our top 25 deals, we saw collaboration with five clouds each. Customers realize that building agent-first companies requires access to comprehensive data and metadata, and we're unique in offering this integrated platform.