Salesforce is projecting fourth-quarter revenue growth of 10% after reporting better-than-expected third quarter earnings.
The company reported third-quarter earnings of $1.25 a share on revenue of $8.72 billion, up 11% from a year ago. Non-GAAP earnings for the quarter were $2.11.
Wall Street was expecting Salesforce to report third quarter earnings of $2.06 a share on revenue of $8.72 billion.
Salesforce CEO Marc Benioff said the company is "bringing CRM, data, AI and trust together in a single, integrated platform." CFO Amy Weaver said the company is maintaining its focus on operating margins. Salesforce projected fiscal 2024 operating margins of 14.5% (30.5% non-GAAP).
As for the outlook, Salesforce projected fourth quarter revenue of $9.18 billion to $9.23 billion, up 10% from a year ago. Non-GAAP earnings will be $2.25 a share to $2.26 a share in the fourth quarter.
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For fiscal 2024, revenue will be $34.75 billion to $34.8 billion, up 11% from a year ago. Non-GAAP operating margins will be 30.5% with non-GAAP earnings of $8.18 a share to $8.19 a share.
Speaking on the earnings call with analysts, Benioff said:
"We have 80% growth in deals more than $1 million. That is far exceeding our expectations, that we were able to pull together all of these different clouds into this kind of what we call a cocktail. The customers were wanting to buy Tableau, Slack, MuleSoft, the Data Cloud, Sales Cloud, the Service Cloud, all that we're able to build these big transactions."
Indeed, 9 out of the top 10 Salesforce deals in the quarter included six or more clouds.
Benioff also said that it added 1,000 Data Cloud customers in the quarter and ingested 6.4 trillion records. He also said Einstein GPT Copilot has performed well across the platform.
Internally, Salesforce has been able to use copilots to resolve more than 200,000 manual approvals this year and resolve employee related queries.
Other items:
- Benioff talked up MuleSoft as the way customers are connecting applications and data stores. He added that MuleSoft is becoming a key part of enabling Data Cloud.
- 17% of the Fortune 500 is using Einstein GPT Copilot.
- Weaver said:
"Companies are still really focused right now in this environment, on productivity, on automation, on time to value. You certainly see it from the CFO as my counterparts around the world. Real focus on every dollar that's being spent. We're now entering our sixth quarter of measured customer buying behavior and we're saying that this has been continuing recently. And that does reflect, particularly in areas like SMB, self-serve, create and close, you see this in professional services."
By the numbers for the third quarter:
- Sales Cloud revenue was $1.91 billion, up from $1.72 billion a year ago.
- Service Cloud revenue was $2.07 billion, up from $1.86 billion a year ago.
- Platform and other revenue were $1.686 billion, up from $1.51 billion.
- Marketing and Commerce Cloud revenue was $1.23 billion, up from $1.3 billion.
- Data revenue, including data analytics, Tableau and MuleSoft, was $1.24 billion, up from $1.02 billion. Data revenue was up 22% from a year ago.
- Americas revenue was $5.86 billion and remains the bulk of Salesforce's sales.
