Marc Benioff, co-founder and CEO of Salesforce, spoke at the World Economic Forum in Davos, Switzerland, on January 18, 2023.
Stefan Wermuth Bloomberg Getty Images
Salesforce Shares rose 15% in full trading on Friday after the cloud software maker beat Wall Street estimates on profit and issued a better-than-expected forecast.
Here’s how the company does it:
- earnings: $1.68 per share, adjusted, vs $1.36 per share as expected by analysts, according to Refinitiv.
- result: $8.38 billion, vs. $7.99 billion as expected by analysts, according to Refinitiv.
Salesforce’s revenue rose 14% year over year in the fiscal fourth quarter, which ended Jan. 31, consistent with the previous quarter, according to a statement. The company reported a loss of $98 million, compared to a loss of $28 million in the year-ago quarter.
In January Marc Benioff, co-founder and CEO of Salesforce, said that the company would cut 10% of its workforce, which represents more than 7,000 people, and that the restructuring strategy resulted in costs of $828 million during the quarter.
Profitability has become a higher priority at Salesforce, which in recent months has been pressured by a stream of activist investors, including Third Point, Elliott Management and Starboard Value. The firm announced the addition of ValueAct Capital CEO Mason Morfit to the board. At the end of the quarter Bret Taylor, who ran Salesforce as co-CEO alongside Benioff, resigned.
Adjusted operating margin, at 29.2%, was more than the 25% target for fiscal year 2026 that executives had set at an investor day in September.
For the fiscal first quarter, the company asked for adjusted earnings in the range of $1.60 to $1.61 per share and revenue of $8.16 billion to $8.18 billion. Analysts surveyed by Refinitiv had been looking for $1.32 in earnings per share and $8.05 billion in revenue.
Salesforce sees adjusted earnings per share for the full fiscal year 2024 of $7.12 to $7.14 and revenue of $34.5 billion to $34.7 billion. Analysts polled by Refinitiv had expected $5.84 in adjusted earnings per share and $34.03 billion in revenue.
The company said it is expanding its share buyback program to $20 billion after announcing its first buyback commitment, with up to $10 billion allocated for that purpose, in August.
Salesforce shares are up 26% so far this year, excluding Wednesday’s after-hours move, outperforming the S&P 500 index, which has gained 3% over the same period.
Executives will discuss the results with analysts on a conference call beginning at 5 p.m. ET.
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