Time: 2024-05-30
Salesforce Inc, a cloud software vendor, experienced a significant drop in its shares after reporting lower-than-expected revenue and issuing guidance below Wall Street's estimates. The company's earnings per share were $2.44 adjusted compared to the expected $2.38, while revenue came in at $9.13 billion versus the projected $9.17 billion. This marks the first time since 2006 that Salesforce fell short on revenue, highlighting potential challenges ahead.
Analysts predict that Salesforce may face deal compression and slowing projects in its professional services business in the upcoming fiscal year. Despite the setback, the company saw an 11% increase in revenue in the fiscal first quarter compared to the previous year. However, revenue from the Professional Services and Other category was down 9%, signaling a need for strategic adjustments in certain areas.
Looking ahead, Salesforce has raised its earnings forecast for the 2025 fiscal year, with expectations of adjusted earnings per share ranging from $9.86 to $9.94. The company also aims to maintain its revenue guidance at $37.7 billion to $38 billion. With recent product launches such as the Einstein Copilot assistant and enhanced AI features for Slack customers, Salesforce continues to innovate in the competitive software market.