Salesforce (CRM) earnings in the second quarter of 2023

sales force It reported earnings and revenue that beat analysts’ estimates but gave a disappointing outlook for fiscal year 2023. The stock fell in extended trading on Wednesday.

The company said its board of directors approved a $10 billion stock buyback program, a first for Salesforce.

Here’s how the company did:

• gains: $1.19 per share, adjusted, versus $1.02 per share as expected by analysts, according to Refinitiv.
• he won: $7.72 billion, vs. $7.69 billion as analysts expected, according to Refinitiv.

Revenue was up 22% from a year earlier in the quarter ended July 31, according to A statement. Net income of $68 million is down from $535 million in the same quarter last year, when the company made significant gains on investments.

For the fiscal third quarter, Salesforce called adjusted earnings of $1.20 to $1.21 per share on $7.82 billion to $7.83 billion in revenue. Analysts polled by Refinitiv were looking for $1.29 in adjusted earnings per share on $8.07 billion in revenue. Salesforce said the revenue guidance would have been $250 million higher had it not been for the impact of exchange rates.

Salesforce has lowered its 2023 financial guidance for both profit and revenue. It now expects $4.71 to $4.73 in earnings per share and $30.9 billion to $31 billion in revenue, including $800 million in negative foreign exchange impact, compared to Predictions Earnings of $4.74 to $4.76 per share and $31.7 billion to $31.8 billion in revenue. Analysts polled by Refinitiv had expected $4.75 in adjusted earnings per share and revenue of $31.73 billion.

Marc Benioff, co-founder and co-CEO of Salesforce, told analysts on a conference call that the company has experienced weaker economic cycles before.

“Sales cycles can be stretched, deals are being vetted by higher levels of management, and all of that we started seeing in July,” Benioff said. “Nearly everyone I’ve spoken to is taking a more thoughtful approach to their business. We expect these trends to continue in the near term, and we’ve reflected that in our guidance.”

The slowdown was not across the board.

Demand has been slower from small and medium-sized businesses, particularly in North America and Europe, specifically in retail, consumer goods, telecommunications and media, Amy Weaver, Salesforce’s chief financial officer, said on the call.

“From a product perspective, commerce and marketing saw more pronounced slowdowns, while sales and service remained strong,” Weaver said. Even as revenue weakened, Salesforce repeated its guidance for an adjusted operating margin of 20.4% for fiscal year 2023.

The company’s service and support subscription revenue totaled $1.83 billion in the first quarter, an increase of 14% year over year. Revenue in the sales category, which includes Salesforce’s long-running business opportunity management software, increased nearly 15% to $1.7 billion. The company’s platform and the other category that includes Slack generated $1.48 billion in revenue, an increase of 53%.

In the last quarter, Salesforce announce Availability of new marketing and business tools, etc. acquired Troops.ai, a startup that has developed a chatbot on Slack that salespeople can use to update their CRM software. Salesforce, which completed its nearly $28 billion acquisition of Slack last year, He said The chat offer will increase in price for the first time since the app was launched in 2014. The company reiterated its forecast of $1.5 billion in Slack’s revenue for the full fiscal year.

Before the after-hours move, Salesforce shares are down about 29% so far this year, compared to a nearly 13% drop for the US S&P 500 stock index over the same period.

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