Salesforce reported better-than-expected earnings and revenue on Wednesday. The company’s shares, however, declined 6 percent in extended trading on weak guidance for the ongoing quarter and co-CEO Bret Taylor’s decision to step down from his position.
The company’s founder and co-CEO Marc Benioff will now hold the position of CEO and solely be in charge of the software company. For the third quarter, adjusted earnings per share came in at $1.40, beating analysts estimate of $1.21 per share, according to Refinitiv. Revenue for the third quarter came in at $7.84 billion, slightly beating analysts’ estimate of $7.82 billion, according to Refinitiv.
For the fiscal third quarter, the company expects revenue to come in the range of $7.9 billion to 48.03 billion. The midpoint of this range is lower than analysts’ estimate of $8.02 billion expected for the fiscal fourth quarter. Salesforce also expects to take a hit of $900 million in sales as a result of the challenges brought about by foreign exchange.
Total revenue was up 14 percent year-over-year. The company had, in the second quarter reduced its year-end estimate for both revenue and earnings. It cited a weaker economic cycle and this became apparent in its latest quarterly report.
The company reported a decrease of 23 percent year-over-over in its operating cash flow which came in at $313 million.
The company’s subscription and support revenue category which makes up most of the company sales reported revenue of $7.23 billion. This segment houses the company’s flagship Sales Cloud software.
Salesforce’s The Platform and Other category which houses Slack reported revenue of $1.51 billion, up 18 percent year-over-year. During the quarter, the company said it spent $1.7 billion repurchasing shares.