Salesforce (CRM) reported fourth-quarter earnings after the market closed, beating key revenue estimates and guiding to profit growth. After-hours trading saw a 13% increase in the company’s stock.
Because activists are circling the cloud giant, this earnings cycle was critical. During the company’s upcoming earnings call, investors will be paying close attention to what Salesforce CEO Marc Benioff has to say in response to activists’ concerns, particularly regarding expense management.
Salesforce’s GAAP operating margin was 3.3% for the quarter. Salesforce also reported a $98 million loss, up from $28 million in the same quarter last year. However, the company’s full-year guidance of $34.5 to $34.7 billion was a success.
The company also announced a $20 billion increase in its share repurchase program.
Salesforce has taken steps to reduce costs in recent months, including laying off 10% of its employees in January. However, it hasn’t been a straight line; for example, according to The Wall Street Journal, the company continues to pay actor Matthew McConaughey about $10 million per year for creative consulting services.
Analysts believe Benioff must put on a show today to persuade company watchers and investors that Salesforce is on the right track. These results are significant, but pleasantries and business as usual will not suffice, according to Wedbush analyst Dan Ives, who expects investors to be “laser-focused” on Benioff’s approach.
The standard cookie-cutter conference call and view into FY24 will not satisfy street frustration, Ives says. For the time being, Salesforce is heralding a “new day,” according to a company statement.