💃 Salesforce 2024Q2 (FY2025Q2) Earnings Call 🕺

Good morning, Salesforce Nerds! Salesforce stock skipped up 4% in afterhours trading upon earnings numbers being published.

Marc dominated the quarterly earnings call with a plea to embrace their newest product 🤖.

All of your Salesforce 2024Q2 (FY2025Q2) Earnings Call highlights wrapped into a 4 minute burrito 🌯.

THE GOOD (AND THE NUMBERS)

Salesforce FY2025Q2 Earnings

📈 Revenue | $9.33 billion actual vs $9.23 billion expected, and an 8% YoY increase 🔥

📈 Earnings | $2.56 per share vs $2.35 expected 🔥

It’s been a short 2 quarters since you last saw it - Double Beat 🥊🥊!!

📈 Operating margin is also up to 32.8%; Salesforce is squeezing water 💦 out of the rock 🪨 at this point.

The other big news of the call was that Amy Weaver is stepping down from her CFO role. With an 11-year career at Salesforce, holding the powerful of positions of General Counsel and then CFO, the highly successful executive will stay until her replacement is found.

SO MUCH FORCE

Salesforce, Dreamforce….AGENTFORCE

Marc kicked the call off on a marketing mission 🫡.

A shoutout to the success of Salesforce earnings.

A friendly reminder of his mega-event Dreamforce which he touted as “the largest AI event in the world 🤖 🌎.

And then what would become the theme of the call, Marc touted his newest product - the Agentforce platform.

Marc did not hold back on where he believes Agentforce stands in comparison to Salesforce’s closest competitor.

Unlike last earnings call, he had some objective success stories-

📕📕📕 Wiley

The academic textbook powerhouse, has a unique peak season that aligns with the start of school semesters.

These sales surges require the business to ramp up their sales support for just a few weeks in the year, and then immediately ramp down.

With Agentforce, the textbook dealer leveraged AI agents to a 213% ROI and $230,000 in savings, along with 50% increase in case resolution.

🍔 🍱 🍕Open Table

The online reservation tech company that serves 60,000 restaurants and 150MM diners is using Agentforce for their service inquiries.

Customer requests like Account Reactivation, Reservation Management, and What Is My Loyalty Point Balance- OpenTable is finding opportunities to enhance customer experience with AI.

Are these success stories impressive?

Meh. 🫤

We really, really……reallyreallyreally need to see a compelling use case, from Salesforce OR ANYBODY ELSE, for why AI, in any form, is worth the hype.

Lastly, ending The Good section on a ChaCha highlight, Salesforce Professional Services recorded better than expected revenue of $0.6BB, a 6% YoY increase.

Professional services earnings had been beat up in the previous down quarters, an unhealthy sign that Salesforce customers were scared to invest in their CRM.

An uptick in revenue in that area is a warm and fuzzy indicator that businesses are back to being comfortable spending on their tech 🎉!

THE BAD

The Bad - Three of Them

CFO Change

Amy Weaver’s exit may not be really bad, but it’s not good.

Her track record of success is ridiculous-

💪 An incredible run of revenue and profits

💪 Co-leading the flourishing of Salesforce through the pandemic

💪 The turnaround from activist investor-ism to company-best profit margins.

Huge shoes to fill.

Salesforce is a desirable place to be an executive, so you can bet they have access to the very best talent and network that can funnel the talent to them 💯.

Marc Successor

Marc has been CEO of Salesforce for 25 years.

How much longer will he remain at the helm?

Why don’t the analysts ask him about a succession plan, like they did the previous 5 years?

Look…Marc is 59 years young. He has plenty of good years left in him and the company is thriving under him.

But he seems heavily involved in the business still, and extracting him out will take years, on top of finding a suitable replacement. He’s a billionaire who you can’t imagine wants to spend most of his time being beholden to a board of directors and investors 🤮.

Pushed a Button

Salesforce is making a lot of investors happy. Afterhours CRM stock went up 4%. But you can’t please everybody, like this guy ⬇️

FINAL THOUGHTS

Takeaway Potpourri

A Solid Quarter

Not good, not bad. A solid quarter. Salesforce has beat earnings expectations expectations 95% of the time for the last 20yrs, including this quarter.

More of the same, in a good way 🙂.

Agentforce, the Cannibal

This was the most interesting part of the call 👇

One of the investor analysts keenly observed - if Agentforce is as productive as Marc is describing it, then won’t that eat into seats revenue?

In other words - if AI is able to meet or exceed frontline sales and service roles that humans currently fill, then Salesforce is cannibalizing their user license revenue?

(and putting people out of jobs 😬, effectively replaced by AI 🤖)

Marc 💃 danced 🕺 around answering that question.

He is no dummy, and he and his brilliant team 🧠 has to have done the math. Obviously, a public company serves their investors through providing shareholder value.

But managing the loss of guaranteed revenue (seats) with betting on the success of AI, to meet and then exceed the license revenue it will cannibalize, seems somewhere between really hard and impossible 😅.

AI

In the most IN YOUR FACE 👊 way, Marc is pushing Salesforce as an AI company.

He kicked the call off being very clear that AI is their number one priority and that they intend to be a world-leader in AI solutions.

He framed Dreamforce as the largest AI event in the world.

Is this clever marketing, while they continue to enhance the #1 CRM in the world? Or is Marc truly intending to pivot Salesforce to an AI company that happens to have a CRM product?

SOUL FOOD

and now....Your Salesforce Memes