💃 Take a Bow, Mr Benioff 👏 👏 🕺

Good morning, Salesforce Nerds! Yesterday's post mentioned "what have you done for me lately" in reference to the negative news cycle Marc and Salesforce have been stuck in for the last 3 months. Less than 24hrs later, Marc had a fresh response to that question, to the tune of 14% Q4 revenue YoY increase, an incredible feat in a down market 👏 .

You could hear the pride in Marc's voice as he talked through the results, and then made the victory lap on Jim Cramer's Mad Money. Well done, Marc 👏 👏.

Agenda for today includes

• Take a Bow, Mr Benioff

• Daily Principle

• All the Memes

Take a Bow, Mr Benioff

If you haven't already, do yourself a favor and listen to the call. You can hear Marc smile through the results. And he deserves this victory - as he acknowledged on the call, the last 90 days have been brutal for him and his company. Plenty of it self inflicted, but much of it out of his control.

The Numbers

• Earnings: $1.68 per share actual vs. $1.36 per share expected

• Revenue: $8.38 billion actual vs. $7.99 billion expected

Salesforce lost $98MM, compared to $28MM Q4 YoY. Of course, most of this loss is due to the "restructuring" aka firing of over 7,000 employees, who received relatively generous compensation packages. Regardless, with such strong revenue numbers, the losses are negligible. The payroll reduction over the medium and long term will close the gap. Blah blah blah business finance blah blah....

So, what is the takeaway from all this? The media, Reddit, Discord and plenty of groups have not been shy throwing Salesforce under the bus. This is no different than all of the FAANGs, but up to last year, Salesforce had somehow avoided the negative connotations that their big sibling tech companies have endured for awhile.

Takeaways

Activist Investors

A popular subject that has been written about multiple times on the ChaCha. Activist investors were right - Salesforce was/is undervalued. These groups don't have billions of dollars to throw around because they're dumb. They know what they are doing and they have deep pockets because a lot of people trust their judgement and decision making.

After yesterday's earnings call, Salesforce (CRM) shot up 16% in afterhours trading. A $1BB investment made $116MM. Elliot Management is thought to have made a multi-billion dollar investment.

Layoffs

A very unpopular decision with Main Street, and especially to the workers and their families who were directly impacted. Wall Street appreciated the move. In the short, medium, and long term, this was the "right business decision," as reflected in the stock price.

A common theme on the earnings call was increased productivity from the existing workforce, and to do the same, or more, with less people. Not what the current workers want to hear, but the massive over-hiring that tech did in the past 2yrs was not going to hold up.

Product Offerings

This is still to be determined. With such healthy revenue numbers, Marc and Salesforce are not in the precarious position to offload assets like Slack and Tableau. Marc made it a point to ensure Slack got a lot of love on the call for being part of the quarter's biggest deals. That still does not make Slack and Tableau good fits amongst the Customer 360 stack. Consider this can kicked down the road....

Acquisitions

Salesforce advised that they disbanded their M&A committee. This is basically an acknowledgement that they've sucked at acquiring companies that have a good market fit. Disappointing because an acquisition of Gearset makes a lot of sense. SalesforceChaCha does NOT like Change Sets 🤮.

CEO Succession Plan

With Bret Taylor exiting to start an AI company, there is no clear replacement for Marc, who, despite this recent success, is clearly not as passionate about running and growing a $100BB company as he once was. Unlike the FAANGs, Salesforce seems not to have a handful of world-class leadership talent that is homegrown. Who knows, maybe Matthew McConaughey gets the offer....

Daily Principle

and now....Your Daily Memes