Salesforce Q1 Earnings Preview: Goldman Sachs Expects Beat On These Metrics

Salesforce Inc (NYSE:CRM) has inked a partnership with NTT DATA Group Corp. (OTC:NTDTY) to streamline its application environment.

The company is now preparing to report its fiscal first-quarter results on May 29, amid an exciting earnings season.

Salesforce is likely to report results broadly in-line with guidance, as its projections were driven more by "an improvement in the economic backdrop or a recovery in SMB spending" than execution, according to Goldman Sachs.

The Salesforce Analyst: Kash Rangan maintained a Buy rating on Salesforce with an unchanged $345 price target.

The Salesforce Takeaways: The company is likely to report revenue growth of 11% year-on-year and non-GAAP earnings of $2.29 per share, higher than consensus of $2.24 per share, Rangan said in a Monday note.

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The first quarter is a "seasonally less-significant" one and is "unlikely to alter the company's path toward +10% subscription revenue growth in FY25," the analyst wrote. Salesforce is likely to report 13% year-on-year subscription revenue growth, slightly higher than the consensus of 12%, and non-GAAP operating margins of 32.2%, in-line with expectations, he added.

"We also expect FY25 revenue growth of 11% (Consensus 9%) with 32.7% operating margins (Consensus 32.5%)," which represents an expansion of 200 basis points (bps) "as management continues to balance growth, margin expansion, and capital return," Rangan further stated.

CRM Price Action: Shares of Salesforce were trading 0.6% higher at $287.32 late Monday morning.

Photo courtesy of Salesforce.