Salesforce, Inc. CRM is set to release its fourth-quarter fiscal 2025 earnings on Feb. 26, and expectations are high. The company has been a major beneficiary of the ongoing digital transformation wave, with businesses across industries accelerating cloud adoption and artificial intelligence (AI) integration.

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Despite macroeconomic challenges, strong demand for cloud-based solutions, AI-powered innovations and international expansion is expected to have driven solid revenue and earnings growth. However, longer deal cycles and cautious IT spending by smaller enterprises could be near-term headwinds.

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Click here to know how Salesforce’s overall fiscal fourth-quarter results are likely to be.

Cloud Adoption & AI Boom to Drive Salesforce’s Sales Growth

Salesforce remains one of the biggest players in the enterprise software space, with its Software-as-a-Service model continuing to gain traction amid the hybrid work revolution. The ongoing shift toward cloud-based solutions, coupled with the rise of AI-powered automation, has strengthened demand for its products.

The company’s broad cloud portfolio — spanning sales, marketing, commerce,and customer service applications — has helped it expand its customer base. This diversified approach ensures revenue stability, even as certain industries pull back on software spending due to economic uncertainties.

One of the biggest revenue drivers in the fourth quarter is expected to be Salesforce’s AI-powered solutions, particularly its Einstein Analytics platform. As businesses look to leverage AI for better customer engagement, sales forecasting and process automation, the company’s AI-first strategy is paying off. It has aggressively integrated generative AI tools into its customer relationship management solutions and cloud platforms, creating strong competitive differentiation.

According to industry forecasts, the global AI-driven cloud market is set to grow at a rapid pace, and Salesforce is well-positioned to capitalize on this trend. The company’s commitment to innovation in AI, automation, and data analytics is expected to have contributed meaningfully to its fourth-quarter performance.

International Expansion Strengthens CRM’s Growth Potential

Salesforce’s global reach has been another key growth driver, allowing it to tap into demand from international markets. As businesses worldwide increase their investments in digital transformation, the company’s ability to offer integrated, cloud-based solutions tailored to diverse business needs has given it a competitive advantage.

With enterprises across Europe and Asia-Pacific increasingly adopting AI-driven customer relationship management solutions, Salesforce’s geographical expansion strategy is likely to have contributed to fourth-quarter revenue growth.

Macroeconomic Uncertainties Pose Challenges for CRM

While the company’s long-term growth potential remains strong, it isn’t immune to macroeconomic pressures. Small and mid-sized enterprises, which form a significant portion of Salesforce’s customer base, have been tightening their IT budgets amid economic and geopolitical uncertainties.

The company has previously warned about elongated deal cycles, with customers taking more time to evaluate contracts and negotiate pricing. This trend may have led to smaller deal sizes and delayed revenue recognition in the fourth quarter.

Despite these headwinds, our model estimate for Salesforce’s Subscription and Support segment — which accounts for the majority of its revenues — is still projected to generate around $9.5 billion in the fourth quarter, reflecting continued customer stickiness and demand resilience. This projection indicates 8.6% growth on a year-over-year basis.

Cost Efficiency to Drive Salesforce’s Profitability Growth

One of Salesforce’s biggest wins in recent quarters has been its focus on profitability. The company’s cost-cutting measures, strategic workforce reductions and operational efficiencies have helped expand margins and boost earnings.

Even with some deal compression, Salesforce’s ability to optimize costs while maintaining strong revenue growth should support bottom-line expansion in the fourth quarter. Its leadership in the customer relationship management solution market, combined with AI-driven upsell opportunities, positions it well for long-term profitability.

Salesforce’s Zacks Rank and Other Stocks to Consider

Currently, Salesforce carries a Zacks Rank #2 (Buy).

Atlassian TEAM, Zscaler ZS and Fortinet FTNT are some other stocks that investors can consider in the broader Zacks Computer and Technology sector. TEAM, ZS and FTNT carry a Zacks Rank #2 each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Atlassian shares have soared 39.7% in the past year. The Zacks Consensus Estimate for TEAM’s fiscal 2025 earnings is pegged at $3.45 per share, indicating a 17.8% year-over-year increase.

Zscaler shares have plunged 17.9% in the past year. The Zacks Consensus Estimate for ZS’ fiscal 2025 bottom line is pinned at earnings of $2.99 per share, indicating a year-over-year decline of 6.3%.

Fortinet shares have gained 60.8% in the past year. The Zacks Consensus Estimate for FTNT’s full-year 2025 earnings is pegged at $2.43 per share, suggesting a year-over-year increase of 2.5%.

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