Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Salesforce Inc., profitability ratios
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
The financial performance exhibits notable shifts in profitability and efficiency ratios over the observed periods.
- Gross profit margin
-
The gross profit margin demonstrates a generally stable trend with slight fluctuations. Starting from 75.23% in early 2020, it experienced a mild decline through 2022, reaching 73.34%, followed by a recovery trend up to 77.19% by the beginning of 2025. This pattern suggests consistent cost control relative to sales, with improvement in later years enhancing the core profitability of revenue generating activities.
- Operating profit margin
-
The operating profit margin shows a clear upward momentum across the timeline. It rose steadily from 1.74% in 2020 to 3.29% in 2023, then accelerated significantly reaching 19.01% in 2025. This marked improvement indicates enhanced operational efficiency or reduction in operating costs relative to revenue, reflecting better management of expenses outside direct production costs.
- Net profit margin
-
The net profit margin experienced considerable volatility. It surged to a peak of 19.16% in 2021, dropped sharply to 0.66% by 2023, then rebounded to 16.35% in 2025. Such fluctuations could be indicative of varying non-operating items, tax effects, or one-off gains/losses impacting the net result. Despite inconsistencies, the margin improves markedly in the latest periods.
- Return on equity (ROE)
-
ROE follows a volatile pattern aligned with net profitability trends. It peaked at 9.81% in 2021, declined substantially to 0.36% in 2023, and improved again to 10.13% in 2025. This suggests varying effectiveness in generating shareholder returns, potentially influenced by changing net income levels or equity structure dynamics throughout the years.
- Return on assets (ROA)
-
The ROA metric also displays similar volatility, with a high of 6.14% in 2021, then dropping to 0.21% in 2023, followed by a recovery to 6.02% in 2025. This indicates fluctuations in asset utilization efficiency and profitability, which broadly correspond to trends seen in overall profit margins and ROE.
Overall, the reviewed data reflect periods of substantial improvement in profitability and efficiency ratios after a phase of volatility, highlighting cycles of operational and financial performance adjustment. The improving gross, operating, and net profit margins together with strengthened returns on equity and assets in the most recent periods point to a positive trend in financial health and operational management effectiveness.
Return on Sales
Return on Investment
Gross Profit Margin
Salesforce Inc., gross profit margin calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross profit | 29,252) | 26,316) | 22,992) | 19,466) | 15,814) | 12,863) | |
| Revenues | 37,895) | 34,857) | 31,352) | 26,492) | 21,252) | 17,098) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 77.19% | 75.50% | 73.34% | 73.48% | 74.41% | 75.23% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Accenture PLC | — | 32.61% | 32.34% | 31.99% | 32.38% | 31.53% | |
| Adobe Inc. | — | 89.04% | 87.87% | 87.70% | 88.18% | 86.62% | |
| Cadence Design Systems Inc. | — | 86.05% | 89.36% | 89.57% | 89.73% | 88.61% | |
| CrowdStrike Holdings Inc. | 74.92% | 75.27% | 73.17% | 73.60% | 73.75% | 70.58% | |
| Fair Isaac Corp. | — | 79.73% | 79.45% | 78.06% | 74.75% | 72.10% | |
| International Business Machines Corp. | — | 56.65% | 55.45% | 54.00% | 54.90% | 48.32% | |
| Intuit Inc. | — | 78.72% | 78.13% | 81.09% | 82.53% | 82.05% | |
| Microsoft Corp. | — | 69.76% | 68.92% | 68.40% | 68.93% | 67.78% | |
| Oracle Corp. | 70.51% | 71.41% | 72.85% | 79.08% | 80.59% | 79.68% | |
| Palantir Technologies Inc. | — | 80.25% | 80.62% | 78.56% | 77.99% | 67.74% | |
| Palo Alto Networks Inc. | — | 74.35% | 72.29% | 68.76% | 70.05% | 70.68% | |
| ServiceNow Inc. | — | 79.18% | 78.59% | 78.29% | 77.05% | 78.16% | |
| Synopsys Inc. | — | 79.68% | 79.08% | 79.07% | 79.50% | 78.44% | |
| Workday Inc. | 75.50% | 75.60% | 72.41% | 72.21% | 72.25% | 70.63% | |
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 29,252 ÷ 37,895 = 77.19%
2 Click competitor name to see calculations.
- Gross Profit
- Gross profit demonstrated a consistent upward trend over the observed periods. Starting at 12,863 million USD in January 2020, it increased to 29,252 million USD by January 2025. This more than doubling of gross profit indicates strong growth in the company’s profitability on a gross basis.
- Revenues
- Revenues also showed steady growth throughout the periods. Beginning at 17,098 million USD in January 2020, revenues increased to 37,895 million USD by January 2025. This growth parallels the trend in gross profit, suggesting expanding business operations and sales volume over time.
- Gross Profit Margin
- The gross profit margin percentage remained relatively stable with slight fluctuations. Initially at 75.23% in January 2020, it dipped gradually to 73.34% by January 2023, indicating minor compression in profitability relative to revenue during those years. However, from January 2023 onwards, the margin improved significantly, reaching 77.19% by January 2025. This recovery and subsequent increase suggest better cost efficiency or pricing power in the more recent periods.
- Summary
- The overall analysis reveals a positive financial performance characterized by substantial growth in both revenues and gross profit. The gross profit margin’s initial slight decline followed by a marked improvement indicates evolving operational efficiencies or favorable changes in cost structure. These patterns point to a strengthening financial position over the five-year horizon.
Operating Profit Margin
Salesforce Inc., operating profit margin calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Income from operations | 7,205) | 5,011) | 1,030) | 548) | 455) | 297) | |
| Revenues | 37,895) | 34,857) | 31,352) | 26,492) | 21,252) | 17,098) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 19.01% | 14.38% | 3.29% | 2.07% | 2.14% | 1.74% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Accenture PLC | — | 14.79% | 13.74% | 15.21% | 15.08% | 14.69% | |
| Adobe Inc. | — | 31.35% | 34.26% | 34.64% | 36.76% | 32.93% | |
| Cadence Design Systems Inc. | — | 29.10% | 30.59% | 30.15% | 26.07% | 24.06% | |
| CrowdStrike Holdings Inc. | -3.05% | -0.07% | -8.48% | -9.82% | -10.58% | -30.34% | |
| Fair Isaac Corp. | — | 42.71% | 42.47% | 39.38% | 38.40% | 22.86% | |
| International Business Machines Corp. | — | 14.95% | 15.17% | 13.50% | 11.97% | 9.22% | |
| Intuit Inc. | — | 22.29% | 21.86% | 20.20% | 25.95% | 28.34% | |
| Microsoft Corp. | — | 44.64% | 41.77% | 42.06% | 41.59% | 37.03% | |
| Oracle Corp. | 30.80% | 28.99% | 26.21% | 25.74% | 37.58% | 35.57% | |
| Palantir Technologies Inc. | — | 10.83% | 5.39% | -8.46% | -26.66% | -107.41% | |
| Palo Alto Networks Inc. | — | 8.52% | 5.62% | -3.43% | -7.15% | -5.25% | |
| ServiceNow Inc. | — | 12.42% | 8.49% | 4.90% | 4.36% | 4.40% | |
| Synopsys Inc. | — | 22.13% | 21.72% | 22.87% | 17.48% | 16.83% | |
| Workday Inc. | 4.91% | 2.52% | -3.57% | -2.27% | -5.76% | -13.85% | |
| Operating Profit Margin, Sector | |||||||
| Software & Services | — | 30.41% | 27.43% | 27.41% | 28.21% | 24.17% | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | — | 26.62% | 24.49% | 26.43% | 26.73% | 22.69% | |
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Operating profit margin = 100 × Income from operations ÷ Revenues
= 100 × 7,205 ÷ 37,895 = 19.01%
2 Click competitor name to see calculations.
- Income from operations
- Income from operations demonstrates a consistent and significant upward trend over the observed periods. Starting at $297 million in 2020, it increased to $455 million in 2021 and continued to grow steadily, reaching $1,030 million in 2023. The increase accelerated markedly afterwards, peaking at $7,205 million in 2025, indicating a substantial improvement in operational profitability.
- Revenues
- Revenues also show steady growth throughout the years. Beginning at $17,098 million in 2020, they rose to $21,252 million in 2021 and continued to climb to $31,352 million in 2023. The trend remains positive, with revenues increasing further to $37,895 million by 2025. This steady expansion in revenues reflects strong top-line performance and business growth.
- Operating profit margin
- The operating profit margin exhibits a positive and marked upward trend spanning the periods analyzed. Initially, the margin was relatively low at 1.74% in 2020 but improved gradually over the next few years, reaching 3.29% in 2023. Thereafter, the margin increased significantly to 14.38% in 2024 and further to 19.01% in 2025, highlighting enhanced operational efficiency and effectiveness in managing operating expenses relative to revenues.
Net Profit Margin
Salesforce Inc., net profit margin calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 6,197) | 4,136) | 208) | 1,444) | 4,072) | 126) | |
| Revenues | 37,895) | 34,857) | 31,352) | 26,492) | 21,252) | 17,098) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 16.35% | 11.87% | 0.66% | 5.45% | 19.16% | 0.74% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Accenture PLC | — | 11.19% | 10.72% | 11.17% | 11.69% | 11.52% | |
| Adobe Inc. | — | 25.85% | 27.97% | 27.01% | 30.55% | 40.88% | |
| Cadence Design Systems Inc. | — | 22.74% | 25.46% | 23.84% | 23.29% | 22.02% | |
| CrowdStrike Holdings Inc. | -0.49% | 2.92% | -8.18% | -16.18% | -10.59% | -29.45% | |
| Fair Isaac Corp. | — | 29.86% | 28.37% | 27.12% | 29.78% | 18.26% | |
| International Business Machines Corp. | — | 9.60% | 12.13% | 2.71% | 10.01% | 7.59% | |
| Intuit Inc. | — | 18.19% | 16.59% | 16.23% | 21.41% | 23.78% | |
| Microsoft Corp. | — | 35.96% | 34.15% | 36.69% | 36.45% | 30.96% | |
| Oracle Corp. | 21.68% | 19.76% | 17.02% | 15.83% | 33.96% | 25.94% | |
| Palantir Technologies Inc. | — | 16.13% | 9.43% | -19.61% | -33.75% | -106.75% | |
| Palo Alto Networks Inc. | — | 32.11% | 6.38% | -4.85% | -11.72% | -7.83% | |
| ServiceNow Inc. | — | 12.97% | 19.30% | 4.49% | 3.90% | 2.62% | |
| Synopsys Inc. | — | 36.94% | 21.05% | 19.38% | 18.02% | 18.03% | |
| Workday Inc. | 6.23% | 19.02% | -5.90% | 0.57% | -6.54% | -13.25% | |
| Net Profit Margin, Sector | |||||||
| Software & Services | — | 24.73% | 21.95% | 21.72% | 25.30% | 20.05% | |
| Net Profit Margin, Industry | |||||||
| Information Technology | — | 20.64% | 20.39% | 22.45% | 23.62% | 19.67% | |
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × 6,197 ÷ 37,895 = 16.35%
2 Click competitor name to see calculations.
- Net Income
- The net income exhibits significant fluctuations over the period analyzed. Starting at 126 million USD in 2020, it surged sharply to 4,072 million USD in 2021. However, in 2022, there was a noticeable decline to 1,444 million USD, followed by a further drop to 208 million USD in 2023. The trend reversed dramatically in 2024, with net income rising to 4,136 million USD, and continued to increase to 6,197 million USD in 2025. This pattern suggests volatility influenced by exceptional or non-recurring items, or changes in operational or market conditions.
- Revenues
- Revenues demonstrate a consistent and steady upward trajectory throughout the entire period. From 17,098 million USD in 2020, revenues increased approximately every year, reaching 21,252 million USD in 2021, 26,492 million USD in 2022, 31,352 million USD in 2023, 34,857 million USD in 2024, and finally 37,895 million USD in 2025. This steady growth reflects expanding business operations and potentially increasing market demand or successful sales strategies.
- Net Profit Margin
- The net profit margin shows noticeable volatility, mirroring the trends in net income. Starting at a very low 0.74% in 2020, it sharply increased to 19.16% in 2021. Following this peak, it declined to 5.45% in 2022 and further dropped to 0.66% in 2023, indicating periods of reduced profitability. In 2024, the margin recovered significantly to 11.87% and improved further to 16.35% in 2025. These fluctuations imply variations in cost efficiency, pricing power, or expense management across the years.
Return on Equity (ROE)
Salesforce Inc., ROE calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 6,197) | 4,136) | 208) | 1,444) | 4,072) | 126) | |
| Stockholders’ equity | 61,173) | 59,646) | 58,359) | 58,131) | 41,493) | 33,885) | |
| Profitability Ratio | |||||||
| ROE1 | 10.13% | 6.93% | 0.36% | 2.48% | 9.81% | 0.37% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Accenture PLC | — | 25.68% | 26.75% | 31.11% | 30.25% | 30.05% | |
| Adobe Inc. | — | 39.42% | 32.86% | 33.85% | 32.59% | 39.66% | |
| Cadence Design Systems Inc. | — | 22.58% | 30.58% | 30.93% | 25.39% | 23.69% | |
| CrowdStrike Holdings Inc. | -0.59% | 3.88% | -12.52% | -22.89% | -10.64% | -19.10% | |
| Fair Isaac Corp. | — | — | — | — | — | 71.41% | |
| International Business Machines Corp. | — | 22.06% | 33.29% | 7.47% | 30.38% | 27.14% | |
| Intuit Inc. | — | 16.07% | 13.81% | 12.57% | 20.89% | 35.76% | |
| Microsoft Corp. | — | 32.83% | 35.09% | 43.68% | 43.15% | 37.43% | |
| Oracle Corp. | 60.84% | 120.26% | 792.45% | — | 262.43% | 83.94% | |
| Palantir Technologies Inc. | — | 9.24% | 6.04% | -14.57% | -22.71% | -76.61% | |
| Palo Alto Networks Inc. | — | 49.86% | 25.15% | -127.14% | -78.63% | -24.23% | |
| ServiceNow Inc. | — | 14.83% | 22.69% | 6.46% | 6.22% | 4.18% | |
| Synopsys Inc. | — | 25.17% | 20.01% | 17.85% | 14.31% | 13.54% | |
| Workday Inc. | 5.82% | 17.09% | -6.57% | 0.65% | -8.62% | -19.33% | |
| ROE, Sector | |||||||
| Software & Services | — | 28.71% | 28.63% | 31.20% | 36.34% | 30.37% | |
| ROE, Industry | |||||||
| Information Technology | — | 29.37% | 32.00% | 39.15% | 42.48% | 35.75% | |
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 6,197 ÷ 61,173 = 10.13%
2 Click competitor name to see calculations.
- Net Income
- The net income demonstrated significant volatility over the reported periods. Starting from a relatively low value, there was a sharp increase in the second period, followed by a substantial decline in the third and fourth periods. The fifth and sixth periods saw a robust recovery and growth, with values surpassing previous highs. This pattern indicates fluctuating profitability with periods of both sharp gains and declines.
- Stockholders’ Equity
- Stockholders’ equity exhibited a consistent upward trend throughout the entire timeframe. Beginning at a base level, it steadily increased each period without any declines, reflecting continuous accumulation of equity and reinvestment. This suggests a strengthening capital base and enhanced financial stability over time.
- Return on Equity (ROE)
- The return on equity mirrored the fluctuations in net income but was generally at a moderate level. ROE started very low, peaked significantly in the second period, then dropped markedly in the subsequent two periods. The final two periods showed renewed improvement, though the values remained within mid-single digits to low double digits percentage range. The variability suggests that profitability relative to equity was inconsistent, influenced predominantly by the swings in net income.
Return on Assets (ROA)
Salesforce Inc., ROA calculation, comparison to benchmarks
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 6,197) | 4,136) | 208) | 1,444) | 4,072) | 126) | |
| Total assets | 102,928) | 99,823) | 98,849) | 95,209) | 66,301) | 55,126) | |
| Profitability Ratio | |||||||
| ROA1 | 6.02% | 4.14% | 0.21% | 1.52% | 6.14% | 0.23% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Accenture PLC | — | 12.99% | 13.41% | 14.55% | 13.68% | 13.78% | |
| Adobe Inc. | — | 18.39% | 18.23% | 17.51% | 17.70% | 21.66% | |
| Cadence Design Systems Inc. | — | 11.76% | 18.36% | 16.53% | 15.87% | 14.95% | |
| CrowdStrike Holdings Inc. | -0.22% | 1.34% | -3.65% | -6.49% | -3.39% | -10.09% | |
| Fair Isaac Corp. | — | 29.85% | 27.26% | 25.90% | 25.01% | 14.72% | |
| International Business Machines Corp. | — | 4.39% | 5.55% | 1.29% | 4.35% | 3.58% | |
| Intuit Inc. | — | 9.22% | 8.58% | 7.45% | 13.29% | 16.70% | |
| Microsoft Corp. | — | 17.21% | 17.56% | 19.94% | 18.36% | 14.70% | |
| Oracle Corp. | 7.39% | 7.42% | 6.33% | 6.15% | 10.48% | 8.78% | |
| Palantir Technologies Inc. | — | 7.29% | 4.64% | -10.80% | -16.02% | -43.35% | |
| Palo Alto Networks Inc. | — | 12.89% | 3.03% | -2.18% | -4.87% | -2.95% | |
| ServiceNow Inc. | — | 6.99% | 9.96% | 2.44% | 2.13% | 1.36% | |
| Synopsys Inc. | — | 17.31% | 11.90% | 10.45% | 8.66% | 8.27% | |
| Workday Inc. | 2.93% | 8.39% | -2.72% | 0.28% | -3.24% | -7.05% | |
| ROA, Sector | |||||||
| Software & Services | — | 12.19% | 11.21% | 11.41% | 12.29% | 9.68% | |
| ROA, Industry | |||||||
| Information Technology | — | 11.95% | 12.52% | 14.57% | 14.67% | 11.45% | |
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).
1 2025 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 6,197 ÷ 102,928 = 6.02%
2 Click competitor name to see calculations.
- Net Income
- Net income experienced substantial fluctuations over the periods observed. Starting at 126 million USD in early 2020, it surged dramatically to 4,072 million USD by early 2021. This was followed by a significant decline to 1,444 million USD in early 2022, further dropping to 208 million USD in early 2023. Subsequently, net income recovered sharply to 4,136 million USD in early 2024 and continued to increase to 6,197 million USD in early 2025. The pattern suggests notable volatility in profitability, with two pronounced peaks in 2021 and 2024-2025.
- Total Assets
- Total assets demonstrated a consistent upward trajectory throughout the period. Beginning at 55,126 million USD in early 2020, assets increased steadily year over year, reaching 66,301 million USD in early 2021 and expanding significantly to 95,209 million USD by early 2022. Growth continued at a slower pace, with assets reaching 98,849 million USD in early 2023, then 99,823 million USD in early 2024, and advancing to 102,928 million USD by early 2025. This trend indicates continuous asset base expansion, albeit with a deceleration in growth rate after 2022.
- Return on Assets (ROA)
- ROA values echoed the volatility observed in net income. The ratio began very low at 0.23% in 2020, rising sharply to 6.14% in 2021. This was followed by a decline to 1.52% in 2022 and a further dip to 0.21% in 2023. The ratio rebounded to 4.14% in 2024 and increased again to 6.02% in 2025. The ROA trend suggests that despite growing total assets, profitability efficiency relative to asset base was inconsistent, paralleling the fluctuations in net income.