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Software giant Salesforce had a blockbuster January quarter. It reports earnings for the April quarter on Wednesday, after the market closes.
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Salesforce
shares fell in late trading Wednesday, despite the company posting better-than- expected results for its fiscal first quarter ended April 30.
Investors are disappointed that the cloud-based software provider did not boost its full-year revenue outlook despite the first-quarter beat. On the company’s post-earnings conference call, CEO Marc Benioff said “while the economy is not under our control, our margins are.”
Benioff also spent considerable time on the call taking up the company’s AI software offerings, but there is no clarity on how those developments will affect growth—or when.
Shares of Salesforce (ticker: CRM) were down 6.6% in late trading following the earnings report and conference call.
Salesforce CFO Amy Weaver said in an interview with Barron’s that it was a “solid quarter,” marked by a sharp improvement in operating margins. She notes that the non-GAAP operating margin of 27.6% was about two points ahead of consensus, and 10 percentage points better than the year earlier quarter.
But Weaver also said that there are a few reasons she’s taking a conservative approach to full-year revenue guidance. In particular, she notes that the company continues to see difficult macro conditions. She said that the April quarter from that respect was similar to the January quarter, except that Salesforce saw some additional tightening on professional services revenue, as customers shift to projects that can generate returns…
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