CRM 1Q25:Revenue May Inline With Guidance; No Clear Acceleration in AgentForce

In our previous IT Spending 1Q25 report, we conducted detailed research on SAP, CRM, NOW, and WDAY. In fact, the actual performance of SAP, NOW, and WDAY closely aligned with our research findings.

Channel Checks Indicate Macro Headwinds; Revenue Still Likely to Land Within Guidance, But FY Outlook May Be Tough to Raise

Based on recent channel feedback, Salesforce continues to experience macro-driven headwinds, resulting in slower growth momentum. We believe Q1 revenue is likely to come in within the guided range, though Q2 guidance is expected to remain conservative. Management may find it challenging to raise the full-year outlook.

Macro Impacts Broadly Felt; Service Cloud Performing Best

Salesforce’s business has not been immune to the broader macro environment. Growth has decelerated, with notable differences across product lines. Service Cloud remains the strongest performer, while Sales and Marketing Cloud are holding steady. However, Commerce Cloud is facing heightened competitive pressure.

System Integrator #1:“Our Salesforce-related revenue grew 6.5% in Q1, which was 50bps below our initial plan. We’ve revised our full-year growth target from 10.5% to 7%. Q2 was initially projected at 7%, but now we expect closer to 6%. The financial services and manufacturing verticals are the most impacted, while retail is deteriorating. Healthcare and high tech remain relatively stable.”