Salesforce shares rose more than 8% in extended trading on Wednesday. Salesforce shares had risen after the cloud software vendor reported fiscal Q3 earnings that topped analysts’ estimates. That measured buying environment has been described by many tech vendors and solution providers this year and speaks to less technology purchasing since the height of the global pandemic.
But during the Q3, Salesforce saw “a lot of green shoots,” co-founder and CEO Marc Benioff said on the call. “I would say people are a lot less measured than they were, is one way to put it,” he said. “There’s definitely a reduction in the measured buying environment.”
Salesforce sales report
Salesforce reported $8.72 billion in revenue for the Q3 that was up 10% year-over-year ignoring foreign exchange.
Its current remaining performance obligation (cRPO) was $23.9 billion, up 135 year-over-year. RPO at the end of the quarter was $48.3 billion, up 21% year-over-year.
Subscription and support revenues were $8.14 billion, up 13% year-over-year.
Professional services and other revenues were $580 million, down 4% year-over-year.
Salesforce Q3 earnings from operations was $1.53 billion, up about fivefold year-over-year. Free cash flow was $1.37 billion, up about twelvefold year-over-year.
Salesforce expects to bring in $9.18 billion to $9.23 billion in sales in its fourth fiscal quarter, which would be a 10% increase year-over-year.
Salesforce expects to bring in $34.75 billion to $34.8 billion in revenue for the full fiscal year, which would be up 11% year-over-year.
Salesforce Q3 Earnings beats estimate
Salesforce has more than 11,000 channel partners, according to the vendor.
Salesforce’s stock traded at about $247 a share Wednesday after the market closed, it was up about 7%.
- Salesforce Earnings:$2.11 per share, adjusted, versus the $2.06 per share.
- Revenue: $8.72 billion versus the $8.72 billion
Salesforce 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.
Salesforce lowers expense
However, Salesforce shares has jumped more than 70% this year, outperforming the Nasdaq, which has climbed 36%. The rise in Salesforce stock is largely because it 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 Q3 earnings 2024
Salesforce on Wednesday raised Q3 earnings 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 share update
Salesforce shares rose to $250 after the Q3 earnings report. At that level, they’re about 20% off their record high from two years ago.
