Salesforce, Inc. stock research
FY2025 Q2
Salesforce (CRM) Gross Margin — Quarter Ended Jul 31, 2024
Revenue and gross profit were higher than both the prior quarter and the same quarter one year earlier, while cost of revenue was unchanged from the prior quarter and higher than the year-ago period. Gross margin improved sequentially and compared to the prior year, supported by the relationship between revenue growth and stable cost of revenue.
Gross margin takeaway
Quarter ended Jul 31, 2024 · FY2025 Q2
Revenue and gross profit were higher than both the prior quarter and the same quarter one year earlier, while cost of revenue was unchanged from the prior quarter and higher than the year-ago period. Gross margin improved sequentially and compared to the prior year, supported by the relationship between revenue growth and stable cost of revenue.
- The strongest observable margin driver was the combination of revenue growth and stable cost of revenue on a sequential basis, which directly contributed to the gross margin improvement.
- Compared to the prior quarter, revenue and gross profit increased while cost of revenue remained flat, resulting in a higher gross margin. Versus the same quarter a year ago, all three metrics—revenue, gross profit, and cost of revenue—were higher, with gross margin improving as gross profit grew more than cost of revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
76.8%
Gross profit
$7.2B
Revenue
$9.3B
Cost of revenue
$2.2B
Quarter-over-quarter change
+0.5 pts
Year-over-year change
+1.4 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Oct 31, 2023 | $8.7B | $6.6B | $2.2B | 75.3% |
| Jan 31, 2024 | $9.3B | $7.1B | $2.1B | 76.9% |
| Apr 30, 2024 | $9.1B | $7.0B | $2.2B | 76.3% |
| Jul 31, 2024 | $9.3B | $7.2B | $2.2B | 76.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Apr 30, 2024
+0.5 pts
Year-over-year change
Jul 31, 2023
+1.4 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver was the combination of revenue growth and stable cost of revenue on a sequential basis, which directly contributed to the gross margin improvement.
Compared to the prior quarter, revenue and gross profit increased while cost of revenue remained flat, resulting in a higher gross margin. Versus the same quarter a year ago, all three metrics—revenue, gross profit, and cost of revenue—were higher, with gross margin improving as gross profit grew more than cost of revenue.
Monitor whether cost of revenue can remain stable relative to revenue growth, as this relationship was a key factor in the margin expansion.