Salesforce, like all publicly traded companies, are required to publish regular business updates at certain intervals. These come in the form of quarterly reports, showing investors the results of their latest quarter, as well as their forecasts for the upcoming year.
If you want to understand Salesforce trends and the impact they could have on your own career, then it’s important to tune into the results. Salesforce’s quarterly earnings are released next week on the 28th of August, which will be followed up with a conference call at 2 pm PST.
These quarterly earnings events are primarily aimed at investors, who try to assess a company’s current financial health, and how these numbers will impact its future performance. However, there is a huge amount of valuable data for the Salesforce community within these calls.
For example, discussions will be had over how Salesforce is performing, which products are growing the fastest, and how Salesforce seeks to grow in the future. Whether you are a Salesforce Admin, Developer, Director, Entrepreneur, or Freelancer, you can use this information to strategically place bets on the skills you need to acquire going forward.
This quarter’s earnings report in particular is going to be interesting for a few reasons…
What to Expect From This Quarter’s Earnings
Firstly, Salesforce is one of the largest enterprise cloud companies around; many other tech companies and industry analysts will use Salesforce as a yardstick to determine how companies are allocating their IT budgets. In a world where budgets are restricted, the competition heats up amongst the cloud leaders. In the “The Cloud Wars Top 10” by Acceleration Economy, Salesforce has been downgraded a number of spots in recent years.
Secondly, Salesforce’s last quarter earnings on May 29th sent the stock plunging 16%, as the cloud giant missed their revenue forecast number for the first time since 2006. This shocked Wall Street, as Salesforce has always been a reliable growth stock throughout its history. As products such as Sales and Service Cloud slow down in growth due to saturation in the market, Salesforce must seek to produce some magic through its acquisitions such as Tableau and Slack, as well as its new home-grown products like Data Cloud and Einstein.
Lastly, as Salesforce’s growth is slowing down, they are putting more of a focus on profitability (mainly after the onslaught from activist investors), which includes share buyback schemes to support the share price and a dividend program to pay some of the profit out to its investors.
From a technical, ecosystem perspective, the most interesting parts of the earnings call will be the potential performance of Data Cloud and the Einstein AI products. Salesforce has gone all in on these products, putting all their eggs in the proverbial basket.
From Salesforce’s point of view, this isn’t a flash in the pan like NFT Cloud or Salesforce Blockchain – this is a multi-year-long flagship strategy that started with the release of Data Cloud (Genie) at Dreamforce 2022. Salesforce has paired its AI strategy closely with its Data Strategy, as most of us now realize that AI is useless without the correct data to provide context.
Although the recent earnings season has seen fairly strong results, Wall Street is getting impatient. Many argue that tech companies cannot sustain their high share prices without significant revenue generation from their AI products. Sequoia Capital, a legendary VC firm that supported the likes of Google, Apple, YouTube, and Zoom, argued that the revenue generated by firms to justify the spending on hardware such as Nvidia needs to exceed $600B.
Final Thoughts
Most agree that AI is very useful, but it’s completely dependent on the use cases and how we productize these offerings so that they scale to an entire workforce (whilst also being safe and secure).
Salesforce has built an AI automation platform, much like their declarative platform is used to power countless numbers of automation and custom business process flows around the enterprise world.
The question is, can they do the same with AI? Make sure to leave your thoughts in the comments below!
