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Salesforce said it is focusing on Slack at this time. Slack is expected to make $1.5 billion in sales in 2023.
Salesforce Inc (NYSE: CRM) has reported an increase in its fiscal Q4 revenue, exceeding analysts’ expectations. The American cloud-based software company’s revenue rose 26% to $7.33 billion in Q4, beating the estimate of $7.24 billion. Following the announcement of its fiscal Q4 earnings results, Salesforce added 4% in extended trading. At press time, CRM is trading at $216.75, higher than its previous close of $208.89.
Salesforce Exceeds Analysts’ Expectations in Fiscal Q4
In the earnings result, Salesforce said its earnings per share (EPS) for the fiscal Q4 was 84 cents. This is 10 cents higher than the 74 cents per share predicted by analysts. Its other platform, Customer 360, has had more users over time and has enhanced a smooth operation for Salesforce’s new addition – Slack. The additional app has also contributed to the revenue increase.
Bret Taylor, the Salesforce co-CEO, said:
“Slack continues to exceed our expectations that I think is benefiting not only from the trend towards this new way of working … It’s also benefiting being a part of our Customer 360 portfolio.”
The company and its competitors have enjoyed the positive effects of the pandemic since its outbreak. The shift between hybrid and remote work has improved work experience and productivity. Hence, there is an increased demand for its products which helps companies conduct their businesses online. One of Salesforce’s subsidiaries, Slack Technologies, is now a go-to software for companies to connect online as many embrace remote work. The fresh restrictions from the Omicron variant also added a boost to the fiscal Q4 outcome.
Other Cloud Service providers like Oracle (NYSE: ORCL) and Microsoft Corp (NASDAQ: MSFT) have also reported increased revenue since the pandemic. In January, Microsoft Corp recorded a 26% growth in Q2 revenue for its biggest segment, offering cloud services and including its flagship cloud offering, Azure. It also reported strong Q1 results sending its shares up 2% in aftermarket trading.
Salesforce Intends to Focus on Slack
Salesforce said it is focusing on Slack at this time. Slack is expected to make $1.5 billion in sales in 2023. Bret Taylor said:
“No other big acquisitions are in the pipeline. We don’t have plans for any material M&A in the near term, Slack is our focus.”
During the last quarter, Salesforce promoted Bret Taylor to co-CEO alongside Marc Benioff, the company’s billionaire co-founder. Bret Taylor has been instrumental to the company since he joined in 2016. He has also played a significant part in earning growth and business acquisitions.
Prior to the fiscal Q4 earnings reveal, Salesforce has dropped nearly 18% this year, underperforming the S&P 500. Also, the adjusted earnings for the present quarter and full-year are below expectations. The founder, Chairman, and CEO of Salesforce, Marc Russell Benioff, explained that enterprise software stocks had experienced a precipitous fall. According to the company’s fiscal year 2023 guidance, Salesforce expects revenue between $32 billion to $32.1 billion. Analysts expected a $31.78 billion revenue.