Source: Gelonghui
Management is focusing on the “AI Flatbread.”
In the early morning of May 30, the world's largest CRM software service provider$Salesforce (CRM.US)$Results for the first fiscal quarter ended April 30, 2024 have been announced.
According to financial reports, Saifushi's revenue for the first quarter was US$9.13 billion, up 10.7% year on year, falling short of market expectations of US$9.15 billion; net profit of US$1,533 million was US$199 million for the same period last year. Earnings per diluted share were $1.56, compared to $0.20 for the same period last year.
After the US stock market opened today, SAFTSE opened sharply lower. As of press release, the company had dropped nearly 18% to $223.09.
Earlier, the company said sales growth in the current quarter will slow to an all-time low, which heightens market concerns about whether the company can maintain its lead as the industry shifts to artificial intelligence tools.
For the first time in history, SAFTSE's revenue grew in single digits
According to reports, Safrus is a customer relationship management (CRM) software service provider founded in 1999. It is headquartered in San Francisco, USA, and can provide a customer relationship management platform with on-demand applications. The company's revenue sources are mainly subscriptions to SaaS services in the CRM business. Subscriptions are mainly paid on a monthly or yearly basis.
On May 1 of this year, the International Data Corporation (IDC) once again ranked Safrus as the number one CRM provider in its 2024 global semi-annual software tracker. This is the 11th time in a row that Saftex has topped the list. According to IDC data, in 2023, Safrus's market share in the CRM sector reached 21.7%, and the company received far more revenue than any other CRM vendor.
With the rapid growth of the cloud computing industry in the previous few years, as a leader in the CRM segment, Safransit's performance growth rate is naturally not bad. Prior to FY2022, SAFTSE's annual revenue growth rate was over 20%, making it an appropriate high-growth company.
Notably, however, the company said it expects revenue to grow 8% to US$9.25 billion in the fiscal quarter ending July this year. This will be the first time in the nearly 20 years since SAFTSE went public that it has achieved single-digit quarterly sales growth.
Management touts the potential of AI-related products
Investors have been concerned about the company's declining sales growth over the past year as Saifushi turned its attention to increasing profits.
Among them, the remaining performance debt, which measures contract sales, increased by 10% to US$26.4 billion, lower than expected. Analyst Anurag Rana said this poor performance could be due to large deals not being completed or the number of clients remaining stagnant.
Chief Operating Officer Brian Milham said in a conference call that compared to the previous quarter, consumers were more cautious, made fewer purchases, and waited longer before signing new agreements. “It's similar to how we felt in the first half of last year.”
Meanwhile, the company's management touted the potential of AI-based software and features to increase revenue, increased share buybacks, and began paying dividends to please investors.
Saifshi CEO Benioff emphasized that the recent focus on profit and the long-term potential of artificial intelligence are positive for the company. “We are in a very good position to help companies fulfill their promise of artificial intelligence over the next ten years,” he said in a statement. Most analysts expect that the generative artificial intelligence features in Sefushi apps won't increase revenue until 2025 or 2026.
In response, Rishi Jaluria, an analyst at RBC Capital Markets, said, “I doubt that the CIO's heavy focus on artificial intelligence is at the expense of SEFTSE's expansion.”
Fortunately, the focus of the business for executives and investors — business units that include Seflex Data Cloud, Mulesoft, and Tableau grew 24% to $1.4 billion, higher than analysts' average expectations of $1.36 billion.
The stock is up only 3.2% this year, and at a time when hardware and chip companies such as Nvidia and Dell have risen sharply, many software companies have lagged behind other companies in the tech industry.
edit/lambor