- Salesforce exceeded expectations on every level.
- It is expanding its share buyback program after introducing it last year.
- The cloud software company announced layoffs in the quarter as activists push it to become more profitable.
Marc Benioff, co-founder and CEO of Salesforce, speaks at the World Economic Forum in Davos, Switzerland, Jan. 18, 2023.
Stefan Wermuth | Bloomberg | Getty Images
Salesforce shares soared 15% in extended trading on Wednesday after the cloud software maker beat Wall Street earnings estimates and issued a better-than-expected forecast.
Here’s how the company did it:
- Earnings: $1.68 per share, adjusted, versus $1.36 per share as expected by analysts, according to Refinitiv.
- Income: $8.38 billion, versus $7.99 billion as forecast by analysts, according to Refinitiv.
Salesforce revenue grew 14% year-over-year in the fiscal fourth quarter, which ended Jan. 31, consistent with the prior quarter, according to a statement. The company reported a loss of $98 million, compared with a loss of $28 million in the year-ago quarter.
In January, Marc Benioff, co-founder and CEO of Salesforce, said 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. dollars during the quarter.
Profitability has become a higher priority at Salesforce, which in recent months has come under pressure from an influx of activist investors, including Third Point, Elliott Management and Starboard Value. The company announced the addition of ValueAct Capital CEO Mason Morfit to its board of directors. At the end of the quarter, Bret Taylor, who led Salesforce as co-CEO alongside Benioff, resigned.
For the fiscal first quarter, the company forecast adjusted earnings of $1.60 to $1.61 per share and revenue of $8.16 billion to $8.18 billion. Analysts polled by Refinitiv were looking for $1.32 in adjusted earnings per share and $8.05 billion in revenue.
Salesforce forecasts full-year 2024 adjusted earnings per share 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 was expanding its share buyback program to $20 billion after announcing its first buyback commitment, with up to $10 billion allocated for the purpose, in August.
Salesforce shares are up 26% so far this year, not including 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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