:max_bytes(150000):strip_icc()/GettyImages-12313561091-1fe71468094e423fb921a0637965038a.jpg "What You Need To Know Ahead Of Salesforce’s Earnings Report Wednesday")
Key Takeaways
- Salesforce is set to report earnings for its fiscal fourth quarter of 2024 on Wednesday after the closing bell.
- Analysts expect the company will swing to a profit with net income of $1.26 billion after posting a loss in the year-ago period due to restructuring costs.
- Revenue is expected to climb 10% from a year earlier to a record $9.2 billion.
- Investors may watch Salesforce’s data cloud revenue to gauge customer interest in the company’s efforts to expand its artificial intelligence offerings across different products and services.
Salesforce (CRM) is expected to swing back to profitability when it reports fourth-quarter fiscal 2024 results after the closing bell Wednesday, with gains driven by growth across business lines and the company’s data cloud operations in particular, as it works to expand artificial intelligence offerings across different products and services.
Analysts expect Salesforce to report quarterly net income of $1.26 billion, according to estimates compiled by Visible Alpha, a reversal from a net loss of $98 million in the prior-year quarter due to restructuring costs. Diluted earnings per share (EPS) are pegged at $1.29, compared with a loss of 10 cents per share the year before. Revenue for the quarter is expected to be 10% higher at an all-time high of $9.2 billion, though a 10% gain would represent the slowest revenue growth for Salesforce since it went public in 2004.
| Salesforce Key Stats | |||
|---|---|---|---|
| Estimate for Q4 FY 2024 | Actual for Q3 FY 2024 | Actual for Q4 FY 2023 | |
| Net Income | $1.26B | $1.22B | ($98M) |
| Diluted EPS | $1.29 | $1.25 | ($0.10) |
| Revenue | $9.2B | $8.72B | $8.38B |
The Key Metric: Data Cloud Revenue
Salesforce announced its Einstein GPT, the first generative AI tool for customer relationship management, roughly a year ago. Since that time, the company has pushed for development of AI offerings across many of its products. Driving this shift toward AI-powered enterprise apps is the company’s data cloud business. As global demand for AI-based solutions continues to grow, this operation could stand to benefit.
Investors watching Salesforce’s data cloud revenue have already seen rapid revenue growth in recent quarters, making data cloud the company’s fastest-growing business line. Analysts expect data cloud revenue to reach $1.5 billion for the most recent quarter, representing growth of almost two-thirds in the past three years. This would place data cloud ahead of Salesforce’s marketing and commerce business and reaching closer to the quarterly revenue levels of its other operations as well.
Business Spotlight: Lining Up Acquisitions
Salesforce has announced plans for two notable acquisitions in recent months following a period of cost cutting that included layoffs, though the company is also reportedly recruiting for thousands of roles. In October, the company announced plans to acquire Airkit.ai, an AI customer service applications and experiences company, for an undisclosed sum. Salesforce said it plans to integrate Airkit into its service cloud business, where it will help a variety of Salesforce operations to expand customer engagement offerings.
In early February 2024, the company announced plans to buy incentive compensation management software firm Spiff, which is also leveraging AI in its platform, with the intention of integrating Spiff into Salesforce’s sales cloud business. This acquisition is expected to be completed in the first quarter of the company’s fiscal year 2025.
Both of these acquisitions highlight Salesforce’s intent to be at the cutting edge of customer relationship management products and services and develop an edge with AI.
Salesforce shares, which closed Tuesday’s session at $299.50, have gained 84% over the past year and are trading at their highest levels since November of 2021.
(Correction—Feb. 26, 2024: This story has been corrected to reflect that Salesforce reports earnings on Wednesday, Feb. 28, 2024)
(Update—Feb. 27, 2024: This story has been updated with share price information.)