Lowering costs nets Salesforce a profitable quarter, but can it keep it up?
Salesforce had a better quarter than expected, but it's reporting and forecasting those results based on prior work, to a real degree.
[ sourced from TechCrunch
This is the best summary I could come up with:
Meanwhile during the pandemic, like other large tech companies believing the work-from-home phenomenon would drive cloud profits long-term, Salesforce hired big, increasing the number of employees by 30% between 2020 and 2022.
As the cost of doing business increased with higher interest rates combined with inflation and currency headwinds, it had an impact on just about every company’s revenue growth, including Salesforce’s.
CEO Marc Benioff steered the company through that turbulence by shifting its approach from the earlier growth orientation to one more focused on profitability.
In addition the company announced in March that it was disbanding its M&A committee, a strong signal that the days of buying growth were over (at least for now).
This quarter wasn’t quite that good at 11% growth, but it beat Wall Street’s expecations and even Salesforce’s own projections by a fair amount, leaving Benioff very satisfied during the post-earnings call with analysts.
In simpler English, the company’s huge spike in profits was earned the old fashioned way: keeping costs low while growing revenue.
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