Salesforce Inc. shares tumbled about 20 per cent on Thursday after the company posted weaker revenue than Wall Street estimates for the first quarter.
Citing weak client spending on cloud and enterprise business products, the ccmpany also predicted profit and revenue below Street estimates for the second quarter.
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At 12:13 p.m. EDT, Salesforce shares were at $217.93, down 19.77 per cent.
For the fiscal first quarter ending April 30, the company reported 11 per cent increase in revenue at $9.13 billion.
Its adjusted profit, excluding some items, was 44 per cent higher at $2.44 per share.
It expects second quarter revenue between $9.20 billion and $9.25 billion.
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San Francisco-based Salesforce kept its fiscal year 2025 revenue forecast unchanged.
But, it slashed its operating margin expectations to 19.9 per cent from prior forecast of around 20.4 per cent.
Salesforce said its AI-focused data cloud business contributed to 25 per cent of the deals valued above $1 million in the first quarter, unchanged from the previous quarter.
To boost revenue, the company has touted the potential for artificial intelligence-oriented software and features.
Highlighting the long-term potential of artificial intelligence as positive for the company, Salesforce chief executive officer Marc Benioff said: “We’re incredibly well positioned to help companies realize the promise of AI over the next decade.”
Recently, Salesforce had considered buying data-organization software maker Informatica Inc.
For “a large scale acquisition, we’re going to make sure that it is not dilutive to our customers, that it’s accretive, that it has the right metrics, and we are also going to be quick to walk away from things that we are not totally confident in,” said Benioff on a conference call.
The company has increased buybacks and declared a dividend.
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Published: 30 May 2024, 09:51 PM IST
