Salesforce Inc (NYSE: CRM) reported stellar third quarter results, leading its shares to rise by about 10% to their highest level since last January. On November 27th, Salesforce also revealed it is significantly expanding its AI-focused partnership with no other than Amazon.com Inc (NASDAQ: AMZN) through which they will infuse new AI capabilities into their workflows.
Salesforce’s Third Quarter Highlights
For the quarter ended on October 31st, Salesforce reported revenue grew 11% YoY to $8.72 billion with adjusted profit of $2.11 per share, both of which topped Wall Street expectations.
Its biggest unit that provides customer support experienced a 12% revenue rise to $2.07 billion. Sales software also experienced a 12% rise as revenue amounted to $1.9 billion. Platform and other revenue that includes Slack reported a 11% rise as sales amounted to $1.69 billion. All in all, subscription and support revenues rose 13% YoY to $8.14 billion while professional services and other revenues experienced a 4% YoY decrease to $0.58 billion.
GAAP operating margin amounted to 17.2% while the non-GAAP operating margin amounted to 31.2 percent.
Salesforce And Amazon Join Forces To Uplevel Their AI Game
According to the release, Salesforce and Amazon will be deepening integrations between their offerings. Salesforce will begin supporting Amazon Bedrock that Amazon made available to the general public in September. Through Amazon Bedrock, customers will gain access to models that have a variety of possible applications, from content creation to drug discovery. Salesforce will be expanding its use of AWS, through data storage, computing and AI technologies, to enhance its services like Salesforce Data Cloud, while Amazon Web Services will use more of Salesforce’s products to deliver more personalized experiences to customers.
A Lifted Guidance
As for the undergoing, fiscal fourth, quarter, Salesforce guided for a revenue increase of about 10%, as it forecasted the range between $9.18 billion and $9.23 billion, topping LSEG’s estimate of $9.21 billion. For the full fiscal year, Salesforce is expecting revenue between $34.75 billion and $34.8 billion which represents a 11% YoY rise. Salesforce raised its operational cash flow growth guidance for fiscal 2024 from 30% to 33%.
A Better-Than-Expected Quarterly Report Amid A Transformative Year
Growth rate has slipped this year as Salesforce looked for ways to lower costs. With its fiscal third quarter results, Salesforce delivered stellar results with double digit revenue growth and non-GAAP margin exceeding 30 percent, and while undergoing a massive restructuring. But, this time, it told quite a different tale compared to January when it announced it will be trimming its workforce by 10% and reducing office spaces as part of its transformation as it is now seeing results from what it had set in motion last year.
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