Shulou(Shulou.com)11/24 Report--

Sina Technology News Beijing time on August 25 in the early morning news, the world's largest CRM software service provider Salesforce today announced the company's financial results for the second quarter of fiscal year 2023. According to the report, Salesforce's total revenue in the second quarter was $7.72 billion, up 22% from $6.34 billion in the same period last year, up 26% year-on-year, excluding exchange rate changes; net profit was $68 million, down 87% from $535 million in the same period last year; diluted earnings per share were $0.07, compared with $0.56 in the same period last year.

Salesforce's second-quarter revenue and adjusted earnings per share both beat Wall Street analysts' expectations, but failed to meet expectations for the third quarter and the entire fiscal year 2023, sending its shares down more than 6 per cent in after-hours trading.

Main achievements:

For the quarter ended July 31, Salesforce's net profit was $68 million, down 87% from $535 million in the same period last year, and diluted earnings per share were $0.07, compared with $0.56 a year earlier.

Excluding certain one-time items (not in accordance with GAAP), Salesforce's adjusted net income for the second quarter was $1.19 billion, compared with $1.402 billion in the same period last year; adjusted diluted earnings per share were $1.19, compared with adjusted diluted earnings of $1.48 per share in the same period last year, down from a year earlier, but still beat analysts' expectations. On average, 36 analysts had expected Salesforce's adjusted earnings per share to reach $1.02 in the second quarter, according to Yahoo Finance.

Salesforce's total revenue in the second quarter was $7.72 billion, up 22% from $6.34 billion in the same period last year, and 26% year-on-year growth excluding currency changes, which also exceeded analysts' expectations. On average, 36 analysts had expected Salesforce's second-quarter revenue to reach $7.69 billion, according to Yahoo Finance.

By business category, revenue from Salesforce's subscription and support business in the second quarter was $7.143 billion, up 21% from $5.914 billion in the same period last year, and accounted for 93% of total revenue, unchanged from the same period last year. Revenue from Salesforce's professional services and other businesses was $577 million in the second quarter, up 35% from $426 million in the same period last year, and accounted for 7% of total revenue, unchanged from the same period last year.

By region, Salesforce's second quarter revenue in the Americas was $5.261 billion, compared with $4.312 billion in the same period last year; revenue in Europe was $1.745 billion, compared to $1.416 billion in the same period last year; and revenue in Asia Pacific was $714 million, compared with $612 million in the same period last year.

Salesforce's total revenue cost in the second quarter was $2.127 billion, compared with $1.613 billion in the same period last year. Of this total, the revenue cost of the subscription and support business was $1.49 billion, compared with $1.146 billion in the same period last year, and the revenue cost of professional services and other businesses was $637 million, compared with $467 million in the same period last year.

Salesforce's total revenue cost accounted for 28 per cent of total revenue in the second quarter, compared with 25 per cent in the same period last year. Of this total, the revenue cost of Salesforce's subscription and support business accounted for 20 per cent of total revenue in the second quarter, compared with 18 per cent in the same period last year, while revenue costs from professional services and other businesses accounted for 8 per cent of total revenue, compared with 7 per cent in the same period last year.

Salesforce's total operating expenses were $5.4 billion in the second quarter, compared with $4.395 billion in the same period last year. Of this total, R & D expenditure was $1.329 billion, compared with $1.02 billion in the same period last year, marketing and sales expenditure was $3.424 billion, compared to $2.736 billion in the same period last year, and general and administrative expenses were $647 million, compared with $639 million in the same period last year.

Salesforce's total operating expenses accounted for 69 per cent of total revenue in the second quarter, compared with 70 per cent in the same period last year. Of this total, Salesforce's R & D expenditure accounted for 17% of total revenue in the second quarter, compared with 16% in the same period last year; marketing and sales accounted for 44% of total revenue, compared with 43% in the same period last year; and general and administrative expenses accounted for 8% of total revenue, compared with 11% in the same period last year.

Salesforce's second-quarter gross profit was $5.593 billion, compared with $4.727 billion in the same period last year. Salesforce's second-quarter gross profit accounted for 72 per cent of total revenue, or gross margin, compared with 75 per cent in the same period last year.

Salesforce's second-quarter operating profit was $193 million, compared with $332 million in the same period last year, and accounted for 2.5 per cent of total revenue, or operating margin. Excluding certain one-time items (not in accordance with GAAP), Salesforce's adjusted operating margin for the second quarter was 19.9 per cent.

Salesforce's cash from business operations in the second quarter was $330 million, down 13% from the same period last year. Salesforce's free cash flow in the second quarter was $130 million, down 24% from the same period last year.

At the end of the second quarter, Salesforce held a total of $6.931 billion in cash and cash equivalents.

At the end of the second quarter, Salesforce's remaining performance obligations were $41.6 billion, an increase of 15 per cent compared with the same period last year.

Performance outlook:

Outlook for third quarter results:

Salesforce expects revenue of between $7.82 billion and $7.83 billion in the third quarter of fiscal 2023, an increase of about 14% over the same period last year, of which exchange rate changes are expected to have an impact of-$250 million, which falls short of analysts' expectations. Earnings per share are expected to reach $0.09 to $0.10. Earnings per share, which are not in accordance with GAAP, are expected to reach $1.20 to $1.21, also falling short of analysts' expectations.

According to data provided by Yahoo Finance, 34 analysts had expected Salesforce's revenue in the third quarter to reach $8.07 billion, while 38 analysts expected Salesforce's adjusted earnings per share to reach $1.29 in the third quarter.

Full-year performance outlook:

Salesforce also expects revenue of $30.9 billion to $31 billion in fiscal 2023, an increase of about 17% over the same period last year, of which exchange rate changes are expected to have an impact of-$800 million, which falls short of analysts' expectations; earnings per share are expected to reach $0.38 to $0.40 Earnings per share that do not comply with US GAAP are expected to reach $4.71 to $4.73, also falling short of analysts' expectations; operating cash flow is expected to grow by 12% year-on-year, of which exchange rate movements are expected to have a negative impact of 3 percentage points.

According to Yahoo Finance, 46 analysts had expected Salesforce's full-year revenue to reach $31.73 billion on average, while 42 analysts expected Salesforce to earn $4.75 a share on average.

Stock price response:

Salesforce shares rose $4.01, or 2.28%, to $180.01 in regular trading on the New York Stock Exchange. Salesforce shares fell $11.74, or 6.52 per cent, to $168.27 in after-hours trading as of 05:26 EDT on the 24th (05:26 Beijing time on the 25th). In the past 52 weeks, the highest price for Salesforce is $311.75 and the lowest price is $154.55.

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