© Reuters. FILE PHOTO: A logo of Salesforce is seen at its exhibition space, at the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France June src6, 2022. REUTERS/Benoit Tessier/File Photo
By Tiyashi Datta
(Reuters) -Salesforce Inc on Wednesday forecast first-quarter revenue above analysts’ estimates and doubled its share repurchase to $20 billion, indicating a strong cash flow for the company that has come under pressure from activist investors.
The upbeat forecast and fourth-quarter results that beat analysts’ estimates pushed the shares of the cloud-based software provider up src4% in extended trading.
They also got a boost from Chief Executive Officer Marc Benioff statement that the company would integrate artificial intelligence into all of its cloud as well as Slack, data analytics platform Tableau and MuleSoft platform.
“I think this (fourth) quarter does buy Salesforce (NYSE:) some time with the activists,” says RBC analyst Rishi Jaluria.
Several activist investors including Elliott Management Corp and Starboard Value have raised concrens about slowing growth at the Silicon Valley favorite, one of the biggest beneficiaries of the pandemic, and have been pushing for changes.
The company recorded one of the slowest quarterly revenue growth since it went public in 2004 as consumers have been cautious about spending in a turbulent economy.
While the company posted another quarter of slow revenue growth with sales rising src4%, analysts said that profitability is the focal point.
“Revenue growth is probably a secondary point of leverage for management versus the activists; profits and cash flow are the primary focal points for improvement,” said Steve Koenig, managing director at SMBC Nikko Securities.
Excluding items, Salesforce expects annual profit between $7.src2 per share and $7.src4 per share, compared with analysts’ estimates of $5.84, according to Refinitiv IBES data.
Salesforce in January said it planned to close some offices and cut jobs by src0% after pandemic hiring left it with a bloated workforce.
The company forecast first-quarter revenue between $8.src6 billion and $8.src8 billion, compared with analysts’ average estimate of $8.06 billion.