Company reports hits, shares soar 13% in after-hours trading

Salesforce (CRM) reported its Q4 results after the market close, beating key revenue estimates and leading to increases in profitability.

The company’s shares are up about 13% in after-hours trading.

Activists are circling the cloud giant, so this earnings cycle was key. In the company’s upcoming earnings announcement, investors will be watching closely what Salesforce CEO Marc Benioff has to say to address campaigners’ concerns, particularly around cost management.

Here are the key metrics Salesforce reported today, compared to analyst estimates compiled by Bloomberg:

Sales Q4 2023: $8.38 billion actual versus $8 billion expected

Q4 2023 adjusted earnings per share (EPS): $1.68 actual versus $1.37 expected

Q4 2023 Adjusted Operating Margin: 29.2% actual versus 22.4% expected

Those margins are particularly important — Salesforce’s GAAP operating margin for the quarter was 3.3%. Salesforce also posted a loss of $98 million compared to $28 million in the year-ago quarter. However, the company’s full-year guidance was in profit, ranging from $34.5 billion to $34.7 billion.

The company also announced it would increase its share buyback program to $20 billion.

Salesforce has taken cost-cutting measures in recent months, including: Cut 10% of its workforce in January. However, it wasn’t exactly a straight line – the company, for example continues to pay actor Matthew McConaughey about $10 million annually for creative consulting services, according to reporting The Wall Street Journal.

[Read more: Salesforce’s activist investors: Who are they, and what do they want?]

‘laser focused’

Benioff has to put on a show today and convince company watchers and investors that Salesforce is going in the right direction, analysts say. Favors and business-as-usual won’t make it, wrote Wedbush analyst Dan Ives, who expects investors to focus on Benioff’s “laser-focused” approach.

The story goes on

“The frustration on the road won’t settle for the standard conference call and FY24 outlook,” Ives said.

Salesforce may even be undergoing a major conceptual shift at the highest levels of the company today, as pressure from activists and Wall Street may already have “resulted in changes in Salesforce’s operating philosophy,” BMO analyst Keith Bachman recently wrote.

Allie Garfinkle is Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agafinks and further LinkedIn.

Click here for the latest earnings reports and analysis, earnings whispers and expectations, and corporate earnings news

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance App for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, flipboard, LinkedInAnd youtube