Have you evaluated the performance of Salesforce.com's (CRM) international operations during the quarter that concluded in January 2025? Considering the extensive worldwide presence of this customer-management software developer, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.

In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.

Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.

Our review of CRM's last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.

The company's total revenue for the quarter amounted to $9.99 billion, showing rise of 7.6%. We will now explore the breakdown of CRM's overseas revenue to assess the impact of its international operations.

Exploring CRM's International Revenue Patterns

Of the total revenue, $999 million came from Asia Pacific during the last fiscal quarter, accounting for 10.00%. This represented a surprise of +3.04% as analysts had expected the region to contribute $969.51 million to the total revenue. In comparison, the region contributed $996 million, or 10.55%, and $906 million, or 9.76%, to total revenue in the previous and year-ago quarters, respectively.

Europe generated $2.33 billion in revenues for the company in the last quarter, constituting 23.36% of the total. This represented a surprise of +38.29% compared to the $1.69 billion projected by Wall Street analysts. Comparatively, in the previous quarter, Europe accounted for $2.23 billion (23.59%), and in the year-ago quarter, it contributed $2.21 billion (23.74%) to the total revenue.

International Revenue Predictions

For the current fiscal quarter, it is anticipated by Wall Street analysts that Salesforce.com will report a total revenue of $9.74 billion, which reflects an increase of 6.6% from the same quarter in the previous year. The revenue contributions are expected to be 10.3% from Asia Pacific ($998.38 million) and 22.1% from Europe ($2.15 billion).

For the full year, the company is expected to generate $40.82 billion in total revenue, up 7.7% from the previous year. Revenues from Asia Pacific and Europe are expected to constitute 10.2% ($4.16 billion) and 21.9% ($8.94 billion) of the total, respectively.

Concluding Remarks

The dependency of Salesforce.com on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.

In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.

Here at Zacks, we put a great deal of emphasis on a company's changing earnings outlook, as empirical research has shown that's a powerful force driving a stock's near-term price performance. Quite naturally, the correlation is positive here -- an upward revision in earnings estimates drives the stock price higher.

The Zacks Rank, our proprietary stock rating mechanism, demonstrates a notable performance history confirmed through external audits. It effectively utilizes the power of earnings estimate revisions to act as a predictor of a stock's price performance in the near term.

Salesforce.com, bearing a Zacks Rank #3 (Hold), is expected to mirror the broader market's movements in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Assessing Salesforce.com's Stock Price Movement in Recent Times

Over the past month, the stock has seen a decline of 12.8% in its value, whereas the Zacks S&P 500 composite has posted a decrease of 1.3%. The Zacks Computer and Technology sector, Salesforce.com's industry group, has descended 4.6% over the identical span. In the past three months, there's been a decline of 17.7% in the company's stock price, against a fall of 1% in the S&P 500 index. The broader sector has declined by 1.2% during this interval.

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This article originally published on Zacks Investment Research (zacks.com).

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