Earnings Updates | Q3 2023

December 6, 2023by Anton Tryhubchenko

The corporate reporting period for Q3 2023 is coming to the end. Over the past week, 7 companies from the S&P 500 index have already reported for the third financial quarter.

Salesforce was among the top five. Its revenue grew by +2.6% compared to the corresponding value for the previous quarter and met analysts’ expectations. Let’s analyze the company’s business in more detail.

Salesforce is one of the world’s largest cloud software developers. The company’s revenue for the last reported quarter was $8.7B. Of this amount, 93% is subscriptions and support, and 7% is other products and services.

At the beginning of 2023, the company announced a cost-cutting plan, laying off about 10% of its staff. As a result, quarterly revenues grew by more than 11% during the year, which made it possible to finally shift the vector of activity towards AI. Salesforce currently plans to hire more than 3,000 employees to implement AI technologies and has a plan to optimize costs by launching a self-service service through Amazon Web Services.

24% of the revenue structure is occupied by product manufacturing costs, and 76% by gross revenue. Over the past quarter, the company made a profit of $1.2B. And its market capitalization is now $243B.

After the publication of the report, Salesforce shares rose by +9.3% and reached $251/share – the highest value in the last 2 years. Investors welcomed the company’s initiatives to introduce artificial intelligence, as well as the results of successful cost-cutting efforts.

*surprise – % ratio between actual and expected revenue
**growth – % ratio of the amount of revenue for the last 4 quarters compared to this value calculated for the previous quarter

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