Salesforce shares jump on better-than-expected earnings report

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Marc Benioff, CEO of Salesforce, participates in a conversation on AI and the Future at the Asia-Pacific Economic Cooperation (APEC) Leaders’ Week in San Francisco, California, on November 16, 2023. 

Andrew Caballero-Reynolds | AFP | Getty Images

Salesforce shares rose more than 8% in extended trading on Wednesday after the cloud software vendor reported fiscal third-quarter earnings that topped analysts’ estimates.

Here’s how the company did:

  • Earnings: $2.11 per share, adjusted, versus the $2.06 per share expected by LSEG
  • Revenue: $8.72 billion versus the $8.72 billion expected by LSEG

Revenue increased 11% from $7.84 billion a year ago. Salesforce, which has historically expanded by well over 20% a year, has seen its growth rates slip in recent quarters as businesses have looked to reduce spending due to economic uncertainties and high interest rates.

However, the stock has jumped more than 70% this year, outperforming the Nasdaq, which has climbed 36%. That’s largely because Salesforce has been able to bolster profits by lowering expenses. In January, the company announced that it was cutting 10% of jobs and reducing some office space as part of a restructuring plan.

Salesforce on Wednesday raised its fiscal 2024 forecast for operating cash flow growth to 33% from 30%. It also said revenue for the fiscal fourth quarter will increase about 10% to between $9.18 billion and $9.23 billion. Analysts were expecting revenue of $9.21 billion, according to LSEG.

“We had another strong quarter of executing on our profitable growth plan we set in motion last year, delivering $8.7 billion in revenue and again raising our operating margin guidance for this fiscal year,” Salesforce CEO Marc Benioff said in the press release.

In its biggest unit, which provides customer support, Salesforce saw revenue jump 12% to $2.07 billion. Revenue in the sales software segment also rose 12% to $1.9 billion.  Platform and other revenue, which includes Slack, increased 11% to $1.69 billion.

Salesforce shares rose to $250 after the earnings report. At that level, they’re about 20% off their record high from two years ago.

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