Salesforce Results (Image credit pixabay/Geralt) https://pixabay.com/en/result-galaxy-earth-world-globe-2153619/Salesforce announced its Q2 fiscal 2024 results this week. The results were strong, and Marc Benioff, CEO and founder, was bullish as the company also updated its forecast for the full year. This is a marked change from the start of 2023, when the company came under pressure from activist investors.

Marc Benioff - Salesforce CEO Source Salesforce (Source Salesforce)
Marc Benioff – Salesforce CEO Source Salesforce

Marc Benioff, Chair and CEO of Salesforce, commented, “Our transformation drove our strong second quarter results, delivering revenue of $8.6 billion and record GAAP and non-GAAP operating margins. Based on our performance and what we see in the back half of the year, we’re raising our fiscal year ‘24 revenue, operating margin, and operating cash flow growth guidance.

“As the #1 AI CRM, with industry-leading clouds, Einstein, Data Cloud, MuleSoft, Slack and Tableau, all integrated on one trusted, unified platform, we’re leading our customers into the new AI era.”

Key figures from the result included:

  • Total Revenue Q2 2024 was $8.60 billion, an increase of 11% Y/Y and 11% CC.
  • Subscription and support revenues were $8.01 billion, an increase of 12% Y/Y.
  • Professional services and other revenues were $0.60 billion, an increase of 3% Y/Y.
  • The second quarter GAAP operating margin was 17.2%.
  • The second quarter non-GAAP operating margin was 31.6%.
  • Cash generated from operations for the second quarter was $0.81 billion, an increase of 142% Y/Y.

Salesforce also raised its full-year 2024 revenue guidance to $34.7-$34.8 billion (raised from $34.5-34.7 billion). At the end of Q1, Salesforce forecasted revenues of only $8.51-$8.53 billion and has blown through that target figure. Importantly, the guidance on GAAP operating margin for the full year has risen from 11.4% to 13.3% for the investors.

Salesforce empowered for growth.

Benioff revealed in the analyst call that Salesforce continues to restructure itself for the short and long term. The increase in profitability is, therefore, additionally welcome as restructuring costs are already factored in. Benioff talked about four areas of how he is leading the transformation of the company he founded.

  • Restructuring for the short and long-term
  • Improving the performance culture with a focus on productivity, operational excellence, and profitability
  • It is prioritizing the core innovations that drive customer success
  • It is building even stronger relationships with our investors.

At the heart of Salesforce are its employees, and Benioff gave an impassioned comment about them, saying, “Well, a lot of these results have to do with not only our incredible employees that we’ve had in place, but a lot of folks have really felt the desire to come back and help us. And I just want to say thank you to all of them. It’s been incredible to welcome them back. And the line is long out the door of people who have left Salesforce and want to come back to Salesforce.

“We’re welcoming all of them with open arms, especially across our sales, engineering, technology, organization, proven winners, incredible leaders who got taken out of Salesforce because they were doing incredible things, that to watch them come back because they want to help us and achieve this next level of growth and capability in revenue, in margin, and in technology and leadership.”- Source The Motley Fool

He noted that returning employees included Miguel Milano (2011-2020,2023-), Chief Revenue Officer, who rejoined from Celonis. Ariel Kelman, (2005-2011, 2023- ) CMO who joined from Oracle and Kendall Collins, (2004-2016, 2023-) Chief Business Officer and Chief of Staff to Benioff

And Dreamforce is around the corner.

Dreamforce will focus this year on combining AI, Data and CRM. The three-day event is packed with sessions and will feature the Salesforce approach to Generative AI with speakers such as Sam Altman, CEO of Open AI. Benioff also reiterated how generative AI brings a new dawn of an AI revolution. Salesforce is playing its part, supporting organisations with its $500 generative AI fund. Its investments include Anthropic, Cohere, and Hugging Face.

Dreamforce is the opportunity for the Salesforce ecosystem to reinvigorate itself and connect with customers and partners. This year is the biggest since before COVID-19 and promises a wealth of announcements for customers to consider. Dreamforce rarely disappoints.

Enterprise Times: What does this mean?

Benioff and his leadership team are well on the journey to transforming the company back into the favourite of the investors. The share price surged briefly after the results to 227.71, and after falling back slightly is still up 7.73% over the last five days to 221.46.

Since Benioff initiated the transformation, the share price has reversed its downward trend and has risen an impressive 64.31% since the beginning of the calendar year. Over the same period, Microsoft is up 36.81%, Oracle 43.80%, SAP 34.31% and Workday 44.38%. Can Benioff continue the momentum?

LEAVE A REPLY

Please enter your comment!
Please enter your name here