International Business Times: Salesforce Earnings

November 30, 2023

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Salesforce’s latest earnings report indicates a positive trend in the company’s performance and a focus on improving profit margins through cost-cutting measures.

Overall, Salesforce seems to be on a positive trajectory with a focus on improving profitability, expanding margins, and leveraging strategic partnerships—pressure from activist investors earlier in the year seems to be working its motivational magic—however, concerns about the balance between cost-cutting and revenue growth remain.

International Business Times’s reporter Panos Mourdoukoutas also garnered our thoughts for a related article titled, “Salesforce Wants To Be The Top AI CRM Company: Can It Solve Its Growth Problem?”

Quoted article excerpts are below:

Michael Ashley Schulman, CFA, Partner & Chief Investment Officer [at] Running Point Capital Advisors, was also impressed with the company’s third-quarter growth performance, and improving profit margins.

“Salesforce’s CEO, Marc Benioff, has been successful in expanding profit margins by implementing a cost-cutting campaign, which includes a reduction in the workforce and a focus on self-service purchasing to cut sales and marketing expenses,” he told the International Business Times. “The company’s move to make its products available on Amazon Web Services (AWS) is a strategic way to reach new #customers while reducing the cost of sales.”

Schulman believes the integration of significant acquisitions, including Slack, Tableau, and MuleSoft, may finally be hitting their stride, with revenue growth in those units finally accelerating in the third quarter, a positive sign for investors. Nonetheless, he is concerned that the extreme focus on cost-cutting may impact revenue growth.

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