Salesforce Inc. Shares Plummet 20% After Weak Revenue Report
Salesforce Inc., a leading cloud-based software company, saw its shares drop by about 20% on Thursday following the release of its first-quarter financial results. The company reported weaker revenue than expected by Wall Street analysts, citing a slowdown in client spending on cloud and enterprise business products.
Despite a 11% increase in revenue to $9.13 billion for the fiscal first quarter ending April 30, Salesforce’s stock took a hit as investors reacted to the disappointing numbers. The company also forecasted profit and revenue for the second quarter below Street estimates, further contributing to the decline in share prices.
Salesforce CEO Marc Benioff remains optimistic about the company’s future, highlighting the potential of artificial intelligence to drive growth in the coming years. Benioff emphasized the importance of AI-focused data cloud business, which accounted for 25% of deals valued above $1 million in the first quarter.
In an effort to boost revenue, Salesforce has been exploring potential acquisitions, including a potential purchase of data-organization software maker Informatica Inc. Benioff stressed the importance of making strategic acquisitions that are accretive to the company and beneficial for customers.
Despite the challenges faced in the first quarter, Salesforce has maintained its fiscal year 2025 revenue forecast but adjusted its operating margin expectations. The company has also increased buybacks and declared a dividend to reassure investors of its long-term growth potential.
Overall, while Salesforce’s shares may have taken a hit in the short term, the company remains focused on leveraging artificial intelligence and cloud technologies to drive future growth and innovation in the competitive software industry.
