Salesforce Delivers Strong Q4 Results – But What Does the Future Hold?

For the past two quarters, Salesforce has been one of the most talked about companies on Wall Street. Whilst the vast majority of large tech firms are having a tough couple of quarters, Salesforce in particular has been in the spotlight.

After disappointing Q3 results back in November, including the announcement of Co-CEO Bret Taylor departing from Salesforce, things have gone from bad to worse, with six activist investors announcing stakes in the company. Today, Salesforce announces its 2023 Q4 results, which the entire ecosystem and wider investment world will be carefully studying…

Salesforce Q4 2023 Results

After Salesforce’s share price dropped to levels not seen since 2019, Salesforce has announced much stronger than expected Q4 results from 2023, with shares skyrocketing 16.4% in after-hours trading.

“For the full year we delivered $31.4 billion in revenue, up 18% year-over-year, or 22% in constant currency, one of the best performances of any enterprise software company our size,”

– Marc Benioff.

Salesforce’s quarterly revenue grew 14% YoY (Up 17% in constant currency) and increased their share buyback program to $20 billion, up from $10 billion previously.

What’s Going On at Salesforce?

Salesforce is undergoing, what many analysts are claiming, the toughest period in the history of the company. Historically, Salesforce has enjoyed huge growth since its founding in 1999, dominating the CRM market with a 24% market share and consistent 20-30% growth quarter over quarter.

But economic headwinds and pressure from Wall Street for tech companies to drive sustainable growth with a focus on margins, have left Salesforce’s share price dwindling. Although all tech companies are taking a bit of a hammering at the moment, Salesforce in particular was down some 40% from its highs in 2021.

Since Q4 of last year, a slew of activist investors have taken large stakes in Salesforce, with a primary focus to have a say in the company’s future, and drive up the share price. On one side of the coin, it’s clear that investors see potential in Salesforce’s future and a large increase in share price. On the other, darker side of the coin, activist investors have one primary focus, the increase in share price, meaning they may disregard the longer-term vision and growth of Salesforce, for a quick buck.

Activists investors do not have a good reputation, with Ray Way, founder and lead analyst at Constellation Research calling them “Vulture Firms”.

Since they announced layoffs of 8,000 employees back in January, Salesforce has truly been under a microscope by the media – from the way Marc Benioff dealt with the layoffs, to paying Matthew McConaughey $10m a year for creative advice.

What Does the Future Hold?

Whilst these quarterly earnings are great news for Salesforce, and the wider ecosystem, which sees consistent growth and a road to increased profitability, Salesforce still has to deal with the activist investors circling.

Ahead of the earnings announcement, Financial Times reporter Elliot Management announced that it had nominated a number of directors to Salesforce’s board after “constructive but intense” talks with the company. How this will change the direction of Salesforce as a company is yet to be seen, but ideas such as disinvesting acquisitions (such as Tableau and Slack) have been raised, with investors stating that Salesforce overpaid for these assets.

But is there another story underlying all of this negative press that is being missed? The story of Marc Benioff and Salesforce who have grown from a scrappy startup out of a 1 bedroom apartment to the largest pure play SaaS company in the world, which has consistent growth year-over-year, and is on the road to $50 billion in revenue.

If you had bet against Marc Benioff and Salesforce over the past decade, you would have lost out considerably. Whilst no company is perfect, there is no denying the long-term value that Salesforce has generated for shareholders, partners, and customers.

As Jeffrey Sonnefeld & Steven Tian succinctly put in their analysis of Salesforce and its activist investors:

“the activists should learn something from Benioff on shareholder value creation and not vice versa. When we crunched the numbers, we found that all four of the major activist funds currently targeting Salesforce–Elliott Management, Third Point, Starboard Value, and ValueAct–have dramatically underperformed all the major stock indices,”


All eyes have been on these important quarterly earnings for Salesforce, and I think we can breathe a sigh of relief as earnings are strong, and have been well received by Wall Street, despite economic challenges.

Whilst Salesforce will need to pivot from its ‘growth at all costs’ mentality and curtail its sales and marketing spend, it’s clear the message has got through to the leadership team.

“Our relentless focus on execution and proactive management of the current environment allowed us to close out a strong quarter and set us up for a transformational fiscal year 24 … It’s a new day at Salesforce and as we look ahead, I am excited for the opportunity in front of us as we continue to drive profitable growth.”

– Amy Weaver, President and CFO, Salesforce

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