Salesforce Inc. (NYSE:CRM)

The analysis of the financial data over the six-year period reveals notable fluctuations and upward trends in key profitability metrics. Net income, which represents the company's bottom-line profitability, experienced significant volatility. After a low of 126 million US dollars in early 2020, net income peaked sharply at 4072 million in 2021, then decreased to 1444 million in 2022 and further to 208 million in 2023, before rising again dramatically to 4136 million in 2024 and 6197 million in 2025. This pattern indicates periods of profitability variability followed by strong recovery and growth in recent years.

Earnings before tax (EBT) trends similarly reflect this variability and recovery pattern. From 706 million US dollars in 2020, EBT rose to 2561 million in 2021, before seeing declines to 1532 million in 2022 and 660 million in 2023. Subsequent years show substantial growth again, with EBT reaching 4950 million in 2024 and 7438 million in 2025. This suggests that the company’s pre-tax profitability mirrored the net income trends, highlighting consistent operational and financial leverage.

The earnings before interest and tax (EBIT) figures demonstrate a comparable trajectory. Starting at 836 million in 2020, EBIT escalated to 2686 million in 2021, then fell to 1753 million in 2022 and 960 million in 2023. The upward momentum resumed with EBIT reaching 5233 million in 2024 and 7710 million in 2025. The pattern indicates that core operational profitability experienced significant growth phases with interim contractions.

EBITDA, which provides insight into earnings stripped of non-cash and non-operating charges, shows a generally strong upward trend over the period despite some decrease. EBITDA increased from 2971 million in 2020 to a peak of 5532 million in 2021, then declined to 5051 million in 2022 and 4746 million in 2023. It sharply increased afterwards reaching 9192 million in 2024 and 11187 million in 2025. This growth in EBITDA, particularly in the last two years, indicates improved operating efficiency and cash-generating ability.

Summary of Key Observations

Profitability metrics exhibit pronounced fluctuations through 2020 to 2023, with significant declines observed in 2023 relative to earlier peaks in 2021.

A strong rebound and growth phase is evident in 2024 and 2025 across all earnings measures, indicating recovery and enhanced financial performance.

The amplitude of changes suggests the presence of external or internal factors causing volatility, but the upward trend in recent years supports positive momentum.

The EBITDA growth in the final years points to potentially improved operational control and reduced impact of non-operating factors or non-cash items.

Enterprise Value (EV)

The enterprise value exhibits an overall upward trend from January 31, 2020, to January 31, 2024, increasing from approximately 146.9 billion US dollars to nearly 290.9 billion US dollars. Notably, there is a decline observed in the period ending January 31, 2023, where EV decreased from approximately 196.4 billion to about 181.8 billion US dollars. In the final period ending January 31, 2025, the enterprise value experiences a slight decrease to approximately 275.7 billion US dollars, indicating a minor correction after the significant rise.

Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA)

EBITDA also demonstrates consistent growth throughout the analysed periods. Starting at approximately 3.0 billion US dollars in January 2020, it more than triples to nearly 9.2 billion US dollars by January 2024. The growth continues into January 2025, reaching about 11.2 billion US dollars. There is a slight decline between January 2021 and January 2023; however, the general trajectory remains strongly positive.

EV/EBITDA Ratio

The EV/EBITDA ratio reflects a decreasing trend over the given periods, moving from a high valuation multiple of approximately 49.45 in January 2020 down to 24.64 by January 2025. This decrease indicates that while the enterprise value has increased, EBITDA has grown at a faster rate, suggesting improved operational profitability or efficiency relative to market valuation. The ratio's decline also implies the company might be becoming more reasonably valued compared to its earnings.

Summary

Collectively, the data indicate a robust growth in profitability measured by EBITDA, supported by a generally increasing enterprise value. The decline in the EV/EBITDA multiple suggests a favorable shift in valuation, potentially reflecting enhanced market confidence in the company’s earnings power. The temporary decline in enterprise value in 2023 merits further examination but does not appear to disrupt the overall positive financial performance trend.