SalesforceChaCha
Posts
💃 Salesforce 2023Q1 (FY2024Q1) Earnings Call 🕺

💃 Salesforce 2023Q1 (FY2024Q1) Earnings Call 🕺

The Good, Great, Bad and Ugly. And a Surprising Shoutout to the Activist Investors...

Salesforce ChaCha
June 01, 2023 • Estimated Reading Time: 5 minutes

Good morning, Salesforce Nerds! Happy June, hope y’all have some amazing summer plans 🏖 🍻!

Two things -

Marc and Salesforce delivered another banger of an earnings call. 🔥
Called it. 🫡 😂

Tech, in general, has recovered well the last quarter, and Salesforce is no exception, with shares up 67% since January 📈. In fact, Salesforce hit a 52-week high yesterday (5/31).

Let’s do a cliff-iest of the cliff notes for how the earnings call went down!

Agenda for today includes

2023Q1 (FY2024Q1) Earnings Call Cliff-iest Cliff Notes
Daily Principle
All the Memes

2023Q1 (FY2024Q1) Earnings Call Cliff-iest Cliff Notes

The Good 👍

$8.25BB in revenue, beating analyst expectations of $8.18BB.

Wall Street messaging around this is that it’s Salesforce’s slowest quarterly revenue growth since 2010. Can’t win ‘em all…..🤷

Takeaway: Revenue growth is down 📉, but overall revenue is up 📈, YoY. The former is concerning to investors, but imagine if there was *gasp a loss in revenue, YoY 😮! Yup, we’ll take the good. 👍

The Great 🙌

Double Beat!

Top (revenue) and bottom (profit margin) lines beat analyst predictions!

Takeaway: Profit Margin was a major pain point for activist investors. By Salesforce raising margins the last 2 quarters, they will continue to keep their activist investors fat and happy, and away from board seats.

From a financial perspective, the activist investors have proven to be valuable for Marc….🤔

The Bad 👎

Expenses are higher than expected, with capital expenditures coming in at $243MM, compared to an expected $203MM.

Takeaway: Meh. Besides, there is an expected increase in AI initiatives that will drive costs. More on this below….

The Ugly 🫣

Ugly because it could be an indicator for some of us - Salesforce consultants.

Professional Services demand is down. Customers are holding off on long-term projects, and doing more Time & Material work.

What are all y’all consultants seeing out there?

Takeaway: Customers are still wary of this turbulent market - high inflation, debt ceiling craziness, and a surprisingly resilient labor market (labor/payroll is a company’s biggest expense! 💵).

Potpourri 💐

AI 🤖

Should’ve counted how many times it was mentioned. A lot. Obviously a major component, an underlying thread, for their roadmap.

Takeaway: Marc was most excited when he was talking about AI. He mentioned this event that will surely be well-produced and insightful in ways an earnings call is not 😴.

Storytelling 📖

Marc told what started as an anecdote, but became a long, winding story as only Marc can do. It was full of flexes that only a billionaire can shamelessly flex 💪 😂 !

He talked about having breakfast with Sam Altman, CEO of OpenAI, who “lives in his neighborhood” and they were discussing AI, of course.

It turned from anecdote to story when Marc said “Sam grabbed his laptop to show me something, which was amazing, but what else I noticed, more importantly, was that he was using Slack…” 😂 😂 😂

Disclaimer - that quote is totally paraphrased, it is NOT the actual quote!

Takeaway: Only Marc.….haha!

But when you can back it up…..😉

Daily Principle

"Many a man thinks he is buying pleasure, when he is really selling himself to it." - Ben Franklin

Kinda crazy Ben understood this in the 1700s.

Fight Club is another well known and more recent detractor of materialism-

"The things you own end up owning you." - Tyler Durden (written by Chuck Palahniuk)