Salesforce, a business software maker, recently announced its robust fiscal second-quarter results, which exceeded estimates and led to a 4% increase in its shares during extended trading. The company reported earnings per share of $2.56, higher than the expected $2.36, and revenue of $9.33 billion, surpassing the estimated $9.23 billion. This 8% year-over-year revenue growth was attributed to the increase in average revenue per user, driven by a shift to premium products. Net income also saw an improvement, standing at $1.43 billion, or $1.47 per share, compared to $1.27 billion, or $1.28 per share, in the same quarter last year.
In addition to its strong financial performance, Salesforce announced that its Chief Financial Officer, Amy Weaver, would be stepping down from her position. Weaver, who has been with the company since 2013, will continue to serve as CFO until a successor is appointed, after which she will remain as an advisor. The decision to appoint Weaver as CFO was made by Marc Benioff, the company’s co-founder, chair, and CEO. Salesforce plans to consider both internal and external candidates for the CFO role.
Looking ahead, Salesforce provided guidance for the fiscal third quarter, with adjusted earnings expected to range from $2.42 to $2.44 per share on revenue of $9.31 billion to $9.36 billion. While analysts had anticipated earnings of $2.43 per share on revenue of $9.41 billion, Salesforce remains optimistic about its projected growth. The company also forecasted adjusted fiscal 2025 earnings of $10.03 to $10.11 per share, with revenue between $37.7 billion and $38 billion, representing an 8% to 9% growth rate.
During the quarter, Salesforce announced plans to introduce an Einstein Copilot for Merchants, aimed at assisting in the creation of product pages and promotions with minimal human input. The company’s focus on artificial intelligence offerings, such as Agentforce, was highlighted by Benioff during a conference call with analysts. He emphasized the accuracy and capabilities of Salesforce’s AI solutions, contrasting them with Microsoft’s offerings, which he claimed had disappointed many customers. This led to a response from a Microsoft executive, Jared Spataro, who defended the value and success of their Copilot for Microsoft 365.
Activist investors Starboard and ValueAct recently disclosed increases in their positions in Salesforce, indicating their confidence in the company’s future growth and performance. These investments were made prior to Salesforce’s announcement of an accelerated expansion of its adjusted operating margin. Despite the positive financial results and investor sentiment, Salesforce shares have experienced a 2% decline in 2024, contrasting with the 17% gain of the S&P 500 index during the same period.
Salesforce’s recent quarterly performance, leadership change, guidance, and technological advancements reflect the company’s commitment to innovation and growth in the competitive business software market. As Salesforce continues to navigate market dynamics and drive value for its customers, investors closely monitor its progress and strategic developments.