Salesforce Inc. (CRM) is set to announce its Q4 earnings report on February 28, 2024. Considering the previous quarterly report, this report will analyze what to expect from the Q4 results.
Salesforce Inc. (CRM) reported a strong quarter ending on October 31, 2023. Revenue climbed by 11% from $7.84 billion a year earlier. Third-quarter GAAP operating margin was 17.2%, with a non-GAAP operating margin of 31.2%.
Current remaining performance obligations are $23.9 billion, up 14% year-on-year. It increased its fiscal 2024 target for operating cash flow growth to 33% from 30%. The company also stated that revenue for the fiscal fourth quarter would climb between $9.18 billion and $9.23 billion [1].
Salesforce’s largest customer support segment reported a sales increase of 12% to $2.07 billion. The sales software segment’s revenue increased by 12% to $1.9 billion. Platform and other revenue, including Slack, climbed by 11% to $1.69 billion. The company’s growth this fiscal year has slowed because economic challenges have led companies to reduce their software investments.
The Salesforce CEO mentioned that they had a successful quarter by implementing their growth plan from last year. They achieved $8.7 billion in revenue and increased their operating margin guidance for this fiscal year.
However, despite all the shiny results, Salesforce Inc. (CRM) is anticipating more job cutbacks, according to a Wall Street Journal story [3]. The corporation plans to lose an additional 700 positions, almost one year after laying off 10% of its workforce. Salesforce’s current wave of layoffs is a continuation of its cost-cutting measures.
It anticipates a slowdown to 10% year-over-year sales growth in the fourth quarter. It anticipates revenue to increase by 11% over the fiscal year. Analysts predict its sales will increase by 11% in fiscal years 2024 and 2025.
Salesforce expects artificial intelligence to drive more revenue in the fourth quarter and beyond. In September 2016, the commercial software manufacturer released its “Einstein” AI software cloud platform. Salesforce has not disclosed any financial information about the revenue generated by the Einstein AI platform, either directly or indirectly.
During the past three years, Salesforce has also introduced AI techniques into other business software solutions, focusing on areas like financial services that are undergoing digital transformation [2].
Saleforce Inc. (CRM) Stock Analysis
Salesforce shares climbed above $250 following the release of last quarter’s results. One primary concern is whether improved margins can propel the stock upward. According to some analysts, sales growth should pick up again.
Salesforce shares rose by about 98% in 2023. So far in 2024, CRM stock has increased by around 13.05%.
CRM broke the resistance level to trade at an all-time high of 295.24. It is way above the 200-day moving averages. The next level of stock support is at 268.27. Breaking this level can bring the stock to 250.17 [4].
Sources:
https://investor.salesforce.com/financials/default.aspx
https://www.salesforce.com/products/artificial-intelligence/
